Telford International Holdings Limited 匯泉國際控股有限公司

The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, 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 Application Proof. Application Proof of Telford International Holdings Limited 匯泉國際控股有限公司 (Incorporated in the Cayman Islands with limited liability) WARNING

The publication of this Application Proof is required by The Stock Exchange of Hong Kong Limited (the ‘‘Exchange’’) and the Securities and Futures Commission (the ‘‘SFC’’) solely for the purpose of providing information to the public in Hong Kong. This Application Proof is in draft form. The information contained in it is incomplete and is subject to change which can be material. By viewing this document, you acknowledge, accept and agree with the Company, its joint sponsors, advisers or members of the underwriting syndicate that: (a) this document is only for the purpose of providing information about the Company to the public in Hong Kong and not for any other purposes. No investment decision should be based on the information contained in this document; (b) the publication of this document or supplemental, revised or replacement pages on the Exchange’swebsite does not give rise to any obligation of the Company, its joint sponsors, advisers or members of the underwriting syndicate to proceed with an offering in Hong Kong or any other jurisdiction. There is no assurance that the Company will proceed with the offering; (c) the contents of this document or supplemental, revised or replacement pages may or may not be replicated in full or in part in the actual final listing document; (d) this document is not the final listing document and may be updated or revised by the Company from time to time in accordance with the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited; (e) this document does not constitute a prospectus, offering circular, notice, circular, brochure or advertisement offering to sell any securities to the public in any jurisdiction, nor is it an invitation to the public to make offers to subscribe for or purchase any securities, nor is it calculated to invite offers by the public to subscribe for or purchase any securities; (f) this document must not be regarded as an inducement to subscribe for or purchase any securities, and no such inducement is intended; (g) neither the Company nor any of its affiliates, advisers or members of the underwriting syndicate is offering, or is soliciting offers to buy, any securities in any jurisdiction through the publication of this document; (h) no application for the securities mentioned in this document should be made by any person nor would such application be accepted; (i) the Company has not and will not register the securities referred to in this document under the United States Securities Act of 1933, as amended, or any state securities laws of the United States; (j) as there may be legal restrictions on the distribution of this document or dissemination of any information contained in this document, you agree to inform yourself about and observe any such restrictions applicable to you; and (k) the application to which this document relates has not been approved for listing and the Exchange and the SFC may accept, return or reject the application for the subject public offering and/or listing. THIS APPLICATION PROOF IS NOT FOR PUBLICATION OR DISTRIBUTION TO PERSONS IN THE UNITED STATES. ANY SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1993, AS AMENDED OR ANY STATE SECURITIES LAWS OF THE UNITED STATES, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES WITHOUT REGISTRATION THEREUNDER OR PURSUANT TO AN AVAILABLE EXEMPTION THEREFROM. NO PUBLIC OFFERING OF THE SECURITIES WILL BE MADE IN THE UNITED STATES. NEITHER THIS APPLICATION PROOF NOR ANY INFORMATION CONTAINED HEREIN CONSTITUTES AN OFFERTOSELLORASOLICITATIONOFANOFFERTOBUYANYSECURITIESINHONGKONG,THE UNITED KINGDOM, THE UNITED STATES OR IN ANY OTHER JURISDICTIONS WHERE SUCH OFFER OR SALE IS NOT PERMITTED. THIS APPLICATION PROOF IS NOT BEING MADE AVAILABLE IN, AND MAY NOT BE DISTRIBUTED OR SENT TO ANY JURISDICTION WHERE SUCH DISTRIBUTION OR DELIVERY IS NOT PERMITTED. No offer or invitation will be made to the public in Hong Kong until after a prospectus of the Company has been registered with the Registrar of Companies in Hong Kong in accordance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). If an offer or an invitation is made to the public in Hong Kong in due course, prospective investors are reminded to make their investment decisions solely based on the Company’s prospectus registered with the Registrar of Companies in Hong Kong, copies of which will be distributed to the public during the offer period. THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. IMPORTANT

If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. Telford International Holdings Limited 匯泉國際控股有限公司 (Incorporated in the Cayman Islands with limited liability) [REDACTED]

Number of [REDACTED] : [REDACTED] Shares (subject to the [REDACTED]) Number of [REDACTED] : [REDACTED] Shares (including [REDACTED] [REDACTED]) (subject to [REDACTED]) Number of [REDACTED] : [REDACTED] Shares (subject to [REDACTED] and the [REDACTED]) [REDACTED] : HK$[REDACTED] per [REDACTED] plus brokerage of 1.0%, SFC transaction levy of 0.0027% and Stock Exchange trading fee of 0.005% (payable in full on application in Hong Kong dollars and subject to refund) Nominal value : HK$0.01 per Share [REDACTED] : [REDACTED]

Joint Sponsors, [REDACTED], [REDACTED] and [REDACTED]

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 document, 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 document. A copy of this document, having attached thereto the documents specified in ‘‘Appendix V — Documents Delivered to the Registrar of Companies and Available for Inspection — A. Documents Delivered to the Registrar of Companies’’ 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 document or any other documents referred to above. The [REDACTED] is expected to be determined by agreement between the [REDACTED] (for themselves and on behalf of the [REDACTED]) and our Company on the [REDACTED], which is expected to be on or about [REDACTED] and, in any event, not later than [REDACTED]. The [REDACTED] will not be more than HK$[REDACTED] per [REDACTED] and is expected to be not less than HK$[REDACTED] per [REDACTED], unless otherwise announced. The [REDACTED] (on behalf of the [REDACTED]) may, where considered appropriate and with our consent, reduce the number of [REDACTED] being [REDACTED] under the [REDACTED] and/or the indicative [REDACTED] range below that stated in this document at any time prior to the morning of the last day for lodging applications under the [REDACTED]. In such a case, notices of the reduction in the number of [REDACTED] being [REDACTED] under the [REDACTED] and/or the indicative [REDACTED] range will be published on the website of the Stock Exchange at www.hkexnews.hk and on the website of our Company at www.telford-international.com as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the last day for lodging applications under the [REDACTED]. See ‘‘[REDACTED]’’ and ‘‘How to Apply for [REDACTED] and [REDACTED]’’ for further details. Prospective investors of the [REDACTED] should note that the obligations of the [REDACTED] under the [REDACTED] to subscribe, and to procure subscribers for, the [REDACTED], are subject to termination by the [REDACTED] (for themselves and on behalf of the [REDACTED]) if certain grounds arise prior to 8:00 a.m. on the [REDACTED]. See ‘‘[REDACTED]’’ for such grounds. It is important that you refer to that section for further details. [REDACTED] Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this document, including the risk factors set out in ‘‘Risk Factors.’’ ATTENTION We have adopted a fully electronic application process for the [REDACTED]. We will not provide printed copies of this document or printed copies of any [REDACTED] to the public in relation to the [REDACTED]. This document is available at the website of the Stock Exchange at www.hkexnews.hk and our website at www.telford-international.com. If you require a printed copy of this document, you may download and print from the website addresses above.

[REDACTED] THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. IMPORTANT

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IMPORTANTNOTICETOINVESTORS

This document is issued by our Company solely in connection with the [REDACTED] and does not constitute an [REDACTED] to sell or a solicitation of an [REDACTED] to buy any security other than the [REDACTED] [REDACTED] by this document pursuant to the [REDACTED]. This document may not be used for the purpose of, and does not constitute, an [REDACTED] to sell or a solicitation of an [REDACTED] in any other jurisdiction or in any other circumstances. No action has been taken to permit a [REDACTED] of the [REDACTED] or the distribution of this document in any jurisdiction other than Hong Kong.

The distribution of this document for purposes of an [REDACTED] of the [REDACTED] in other jurisdiction are subject to restrictions and may not be made except as permitted under the applicable securities laws of such jurisdictions pursuant to registration with or authorization by the relevant securities regulatory authorities or an exemption therefrom.

You should rely only on the information contained in this document and the [REDACTED] to make your investment decision. Our Company, the Joint Sponsors, the [REDACTED], the [REDACTED], the [REDACTED] and the [REDACTED] have not authorized anyone to provide you with information that is different from what is contained in this document. Any information or representation not made in this document must not be relied on by you as having been authorized by our Company, the Joint Sponsors, the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], any of their respective directors, advisors, officers, employees, agents or representatives or any other person involved in the [REDACTED].

Page

Expected Timetable ...... iii

Contents ...... v

Summary ...... 1

Definitions ...... 14

Glossary of Technical Terms ...... 27

Forward-Looking Statements ...... 30

Risk Factors ...... 32

Information About this Document and the [REDACTED] ...... 57

Directors and Parties Involved in the [REDACTED] ...... 60

Corporate Information ...... 64

Industry Overview ...... 66

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Page

Regulatory Overview ...... 80

History, Reorganization, Development and Corporate Structure ...... 99

Business ...... 111

Relationship with Our Controlling Shareholders ...... 169

Connected Transactions ...... 179

Directors and Senior Management ...... 189

Substantial Shareholders ...... 207

Share Capital ...... 208

Financial Information ...... 210

Future Plans and Use of [REDACTED] ...... 251

[REDACTED] ...... 253

Structure of the [REDACTED] ...... 264

How to Apply for [REDACTED] and [REDACTED] ...... 275

Appendix I — Accountant’s Report ...... I-1

Appendix II — Unaudited Pro Forma Financial Information ...... II-1

Appendix III — Summary of the Constitution of Our Company and Cayman Islands Company Law ...... III-1

Appendix IV — Statutory and General Information ...... IV-1

Appendix V — Documents Delivered to the Registrar of Companies and Available for Inspection ...... V-1

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This summary aims to give you an overview of the information contained in this document. Since it is a summary, it does not contain all the information that may be important to you, and is qualified in its entirety by, and should be read in conjunction with, the full text of this document. You should read this document in its entirety including the appendices hereto before you decide to invest in our [REDACTED]. There are risks associated with any investment. Some of the particular risks in investing in our [REDACTED] are set out in ‘‘Risk Factors.’’ You should read that section carefully before you decide whether to invest in our [REDACTED].

OVERVIEW

We are a leading beverage company in Hong Kong and China. We ranked 2nd in the natural, healthy and functional soft beverage market in Hong Kong, and 3rd and 4th in import international spirits market in Hong Kong and China, respectively, by retail sales value in 2020, according to the F&S Report. We have end-to-end platform capabilities covering research and development, raw material sourcing, production management, brand building, sales and marketing, and distribution and logistics for both In-house Brands and Third-party brands and products. Such platform capabilities enable us to meet market demands and achieve continuous growth and profitability during the Track Record Period. We believe these core platform capabilities differentiate us from other players in the market.

Our products comprise In-house Brand Products under our In-house Brands, primarily Tao Ti and Meko, as well as well-recognized international Third-party Brand Products, which we sell through our sales network in Hong Kong and China. Our product portfolio covers a broad range of products ranging from international spirits and wines, natural, healthy and functional beverages, to other consumer drinks and food.

We have established differentiated channel strategies and a robust omni-channel sales and distribution network that are tailored to, and deep-rooted in, the respective local markets. Our sales and distribution network enables us to rapidly and efficiently expand our market reach and increase our sales in China. In Hong Kong, we sell our products directly to online and offline retailers, consisting of on- trade and off-trade customers. In China, we sell our products primarily through a wholesaler system comprising regional wholesalers and dealers, to establish an extensive and effective sales network and to service our offline retailers of both on-trade and off-trade channels. To a lesser extent we also sell directly to online and certain offline key account retailers, in order to maintain a full-spectrum coverage in China. As of December 31, 2020, our direct sales network consisted of 5,636 offline retailers in Hong Kong and 13 offline key account retailers in China, serviced by our direct sales force. As of the same date, our wholesaler system consisted of 80 regional wholesalers and 139 dealers to service our offline retailers in China. For our online sales, we had nine online direct sales customers and 10 online stores operated by us or by e-commerce service providers. Sales of our products cover 31 provinces, municipalities and autonomous regions in China and Hong Kong.

Our platform capabilities are vertically integrated and consolidated to enable us to develop In- house Brand Products while servicing international Third-party Brand Partners with our one-stop sales and marketing solutions.

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. Research & Development: We pursue excellence and are determined not to compromise product quality. We possess in-house product R&D capability for soft beverage products. Specifically, we have a joint task force consisting of our management team, marketing personnel and beverage specialists to develop new products that lead consumer trends for healthy and functional beverages with natural ingredients and fresh taste.

. Raw Material Sourcing: We strive to control the quality of our supply of key raw materials for our In-house Brand Products. For example, for tea leaves, we directly source from tea plantations and actively manage the supply chain to meet our taste, freshness, and other quality requirements.

. Production Management: For our In-house Brand Products, we primarily rely on our production partners for the production. We actively participate in every step of the production process of our production partners, from raw material supplies to product R&D and quality control. We implement comprehensive quality control measures to ensure our product quality. Additionally, we possess in-house production capability in Hong Kong, and have been producing postmix for several world-renowned soft drink brands since 2013.

. Brand Building: Brand building is one of our core platform capabilities that we take pride in. With a history of nearly 40 years, having evolved with the developing market and as supported by a well-trained and experienced team, we are able to identify the uniqueness of a brandtobuild,formulateandexecutebespoke and localized solutions to enhance the brand awareness for our In-house Brands and Third-party Brands.

. Sales and Marketing: Together with our brand building capability, we have built a sales and marketing capability to precisely execute our brand building strategies. Our sales and marketing team has created numerous successful marketing campaigns over the years, and serviced a large network of our on-trade, off-trade and online customers.

. Distribution and Logistics: To ensure timely fulfillment of our commitment, we maintain an in-house distribution and logistics team in Hong Kong, which can directly reach our on-trade, off-trade and online customers throughout Hong Kong. In addition, in China, we adopt a wholesalers system which consists of regional wholesalers and dealers to service our customers. We also engage various distribution and logistics services providers to provide flexible and ready-to-use warehouses and logistics services.

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O N - T R A D E D E C H A N N E L S O R A N L T staurants, Clubs, Hotels, et C I - E L S (Re c.) H A N F .) (E-co N E F N s, etc mme N N tore rce P O A ce S latf E nien orm L H nve s, O S C , Co nlin ets e R ark eta rm ile pe rs, Su et ( c.)

O S N N E - O S T T I O P L U S S O A L E S I N G F A N D M A R K E T un N ct at io ura na l, H l l S ea ona es of lthy nati in t B and Inter d W ever s an ages Spirit

R e n D se io s ev ar ut ic el ch ib ist op an str g m d Di Lo en nd t R a aw M nd ate les a Sou rial Sa ing rcin rket g Production Brand Ma Management Building P L A T I E S F O R M C A P A B I L I T

During the Track Record Period, our revenue grew from HK$1,355.5 million to HK$1,857.6 million at a CAGR of 17.1% and our gross profit grew from HK$458.3 million to HK$618.1 million at a CAGR of 16.1% from 2018 to 2020.

COMPETITIVE STRENGTHS

We believe that our competitive strengths are as follows:

. We are a leading beverage company in Hong Kong and China with vertically integrated platform capabilities to achieve sustainable growth and profitability.

. We have successfully developed one of the largest natural tea beverage brands ‘‘Tao Ti’’ in Hong Kong and we have one of the largest natural, healthy and functional beverage brand portfolio in Hong Kong.

. We have achieved significant revenue growth through our exclusive partnerships with leading international spirits and wines brands, offering them localized and bespoke sales and marketing solutions in China.

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. We have established a nationwide sales network that deeply penetrates on-trade, off-trade and online channels supported by a comprehensive management system for optimized efficiency.

. We have a unique brand and product portfolio covering high-growth beverage categories and are well-positioned to capture the fast-growing consumer market trends in China.

. We have a visionary management team who has demonstrated continuous and sustainable success in the industry and commitment to our customers and partners.

BUSINESS STRATEGIES

We plan to implement the following business strategies:

. Further strengthen our leading market position in the international spirits and wines market in China.

. Further develop our In-house Brand portfolio and expand the product offering of our In-house Brands.

. Further enhance our omni-channel sales network and increase product penetration.

. Further build production capabilities across China to facilitate more a widespread geographical coverage.

. Strengthen our data analytics capabilities to enhance our sales, marketing and operation.

. Pursue appropriate strategic acquisitions and business opportunities.

RISK FACTORS

Investing in the [REDACTED] involves certain risks, which are set out in the section headed ‘‘Risk Factors.’’ You should read that section in its entirety carefully before you decide to invest in our [REDACTED]. Some of the major risks we are exposed to include:

. We operate in a highly competitive industry, which may affect our market share and results of operations.

. Our business relies on consumer demand for the beverage products we offer. Any shift in consumer demand, or any unexpected situation with a negative impact on consumer demand, may materially and adversely affect our business and results of operations.

. If we fail to continue to develop, launch and promote our In-house Brand Products, our business and results of operations may be adversely affected.

. Failure to maintain relationships with our existing Third-party Brand Partners or attract new Third-party Brand Partners may materially and adversely affect business, financial condition and results of operations.

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. We rely on a number of Third-party Brand Partners to provide us their Third-party Brand Products during the Track Record Period, and any shortage of, or delay in supply from such major Third-party Brand Partners could adversely and substantially affect our operations and financial conditions.

. Our marketing and promotional activities may notbeeffectiveinattracting consumers, which may in turn adversely affect our results of operations.

. Our success depends on the market recognition of the well-established brand names of our products, and any damage to it could materially and adversely affect our business and results of operations.

SUMMARY OF THE KEY FINANCIAL DATA

Summary of the Combined Statements of Comprehensive Income

Year Ended December 31, 2018 2019 2020 % of total % of total % of total Amount revenue Amount revenue Amount revenue (HK$ in millions except for percentages)

Revenue...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0 Costofsales...... (897.1) (66.2) (1,207.0) (65.6) (1,239.5) (66.8)

Gross profit ...... 458.4 33.8 631.8 34.4 618.1 33.2

Otherincome...... 10.7 0.8 9.6 0.5 23.7 1.3 Othergains/(losses),net...... 4.7 0.3 (4.0) (0.2) 4.6 0.2 Provision for impairment of receivables ...... (0.8) 0.0 (0.2) (0.0) (2.2) (0.1) Selling and distribution expenses . (228.7) (16.9) (240.1) (13.1) (256.2) (13.8) Administrativeexpenses...... (87.4) (6.4) (99.8) (5.4) (104.2) (5.6)

Operating profit ...... 156.9 11.6 297.3 16.2 283.8 15.2

Financeincome...... 2.3 0.2 3.6 0.2 4.7 0.3 Financecosts...... (0.8) (0.1) (1.9) (0.1) (1.5) (0.1)

Financeincome,net...... 1.5 0.1 1.7 0.1 3.2 0.2 Share of profit of an associate . . . 0.4 0.0 0.4 0.0 0.5 0.0

Profit before income tax ...... 158.8 11.7 299.4 16.3 287.5 15.4

Incometaxexpense...... (29.0) (2.1) (62.7) (3.4) (61.0) (3.3)

Profit for the year ...... 129.8 9.6 236.7 12.9 226.5 12.2

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Summary Financial Information by Major Components of Our Results of Operations

During the Track Record Period, our revenue was primarily derived from the sales of beverage products, particularly our two major categories of natural, healthy and functional beverages, and international spirits and wines. The table below sets forth a breakdown of our revenue by nature of products and as percentages of our total revenues for the periods indicated:

Year Ended December 31, 2018 2019 2020 % of total % of total % of total Amount revenue Amount revenue Amount revenue (HK$ in millions except for percentages)

Natural, healthy and functionalbeverages.... 449.1 33.1 480.1 26.1 438.7 23.6 International spirits and wines 669.1 49.4 1,121.7 61.0 1,216.7 65.5 Others(1) ...... 237.3 17.5 237.0 12.9 202.2 10.9

Total ...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0

Note:

(1) During the Track Record Period, products under ‘‘Others’’ category included primarily beers, sakes, other soft beverages, postmix and packaged food and snacks.

The table below sets forth our gross profit and gross profit margin by nature of products for the periods indicated:

Year Ended December 31, 2018 2019 2020 Gross Gross Gross Gross Profit Gross Profit Gross Profit Profit Margin Profit Margin Profit Margin (HK$ in millions except for percentages)

Natural, healthy and functional beverages . . . . 172.4 38.4% 191.5 39.9% 177.7 40.5% International spirits and wines 204.2 30.5 356.2 31.8 377.9 31.1 Others...... 81.7 34.5 84.1 35.5 62.5 30.9

Total...... 458.3 33.8% 631.8 34.4% 618.1 33.3%

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The table below sets forth a breakdown of our revenue by brand categorization and as percentages of our total revenues for the periods indicated:

Year Ended December 31, 2018 2019 2020 %of %of %of total total total Amount revenue Amount revenue Amount revenue (HK$ in millions except for percentages)

In-house Brand Products . . . 335.7 24.8 343.1 18.7 307.3 16.5 Third-party Brand Products . 1,019.8 75.2 1,495.7 81.3 1,550.3 83.5

Total...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0

Summary of the Combined Statements of Financial Position

As at December 31, 2018 2019 2020 (HK$ in millions)

Totalnon-currentassets...... 130.5 141.9 153.0 Totalcurrentassets...... 892.9 1,166.7 1,359.0

Total assets ...... 1,023.4 1,308.6 1,512.0

Total non-current liabilities ...... 19.0 30.1 31.3 Totalcurrentliabilities...... 260.4 313.7 503.5

Net current assets ...... 632.5 853.0 855.5

Total equity and liabilities ...... 1,023.4 1,308.6 1,512.0

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Summary of the Combined Statements of Cash Flows

As at December 31, 2018 2019 2020 (HK$ in millions)

Cashgeneratedfromoperations...... 80.4 227.9 395.4 Incometaxpaid...... (25.5) (53.3) (68.1)

Net cash generated from operating activities ...... 54.9 174.6 327.3 Netcashusedininvestingactivities...... (96.6) (81.4) (100.3) Net cash generated from/(used in) financing activities. . . 26.9 (52.2) (103.0)

Net (decrease)/increase in cash and cash equivalents. . (14.8) 41.0 124.0

Cash and cash equivalents at beginning of the year. . . . . 142.6 125.6 164.4 Effect of currency translation differences on cash and cashequivalents...... (2.2) (2.2) 14.1

Cash and cash equivalents at end of the year ...... 125.6 164.4 302.5

Key Financial Ratios

Year Ended/As of December 31, 2018 2019 2020

Gross profit margin(1) ...... 33.8% 34.4% 33.3% Net profit margin(2)...... 9.6% 12.9% 12.2% Return on assets(3) ...... 13.5% 20.3% 16.1% Return on equity(4) ...... 18.9% 27.7% 23.3% Current ratio(5) ...... 3.4 3.7 2.7 Quick ratio(6) ...... 2.3 2.5 1.8

Notes:

(1) Equals gross profit divided by revenue. See ‘‘Financial Information — Description of Major Components of our Results of Operations — Gross Profit and Gross Profit Margin.’’

(2) Equals profit for the year divided by revenue.

(3) Equals profit for the year divided by the average of the beginning and ending total assets for that year and multiplied by 100%.

(4) Equals profit for the year divided by the average of the beginning and ending total equity for that year and multiplied by 100%.

(5) Equals current assets divided by current liabilities as of the same date.

(6) Equals current assets less inventories and divided by current liabilities as of the same date.

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DIVIDEND AND DIVIDEND POLICY

Dividend

In 2018, 2019 and 2020, Eminent Dragon declared dividends of HK$11.0 million, HK$12.0 million and HK$235.2 million, respectively, to its then sole shareholder, Eminent Leader, of which HK$11.0 million, HK$12.0 million and nil were paid in the respective years. See Note 26 to ‘‘Appendix I — Accountant’s Report.’’ As of the Latest Practicable Date, all dividends declared during the Track Record Period had been fully paid.

In June 2021, we declared a conditional special interim dividend to our then sole Shareholder, Eminent Leader, in the amount of HK$929.0 million in respect of our retained earnings for the period up to June 30, 2021. The payment of such interim dividend is subject to and conditional upon the [REDACTED] and the [REDACTED] being completed on or before June 30, 2022 and subject to such condition being satisfied and with a view to maintaining sufficient flexibility for our operations and business expansion, such interim dividend will be paid by us on or before December 31, 2022 using resources available to us. None of the [REDACTED] from the [REDACTED] will be used to fund such dividend. As of the date of declaration of such interim dividend, Eminent Leader was owned as to 99.96%, 0.01%, 0.01%, 0.01% and 0.01% by Mr. C. Y. Fong, Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong, respectively.

Our auditor will perform a special audit on our financial performance for the six months ended June 30, 2021 and such special audit will be completed before the [REDACTED].

Dividend Policy

The declaration and payment of dividends during the Track Record Period should not be considered as a guarantee or indication that we will declare and pay dividends in such manner in the future, or will declare and pay any dividends in the future at all. We have adopted a dividend policy, according to which our Board shall take into account, inter alia, the following factors when deciding whether to propose a dividend and in determining the dividend amount: (i) operating and financial results; (ii) cash flow situation; (iii) business conditions and strategies; (iv) future operations and earnings; (v) taxation consideration; (vi) interim dividend paid, if any; (vii) capital requirement and expenditure plans; (viii) interests of Shareholders; (ix) statutory and regulatory restrictions; (x) any restrictions on payment of dividends; and (xi) any other factors that our Board may consider relevant. It is also subject to the approval of our Shareholders, the Companies Act, the Articles of Association as well as any applicable laws and regulations, including the applicable PRC laws and regulations in respect of repatriation of dividends and distributions. Subject to the factors aforementioned, we intend to distribute dividend to our Shareholders, the amount of which would be no less than 30% of our distributable profits (as determined in accordance with HKFRS) for the first full financial year subsequent to the [REDACTED].

DISTRIBUTABLE RESERVES

As of December 31, 2020, our Company did not have any distributable reserves available for distribution to our Shareholders.

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OUR CONTROLLING SHAREHOLDERS

Immediately following completion of the [REDACTED] and the [REDACTED] (without taking into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme), [REDACTED]% of the issued share capital of our Company will be owned by Eminent Leader, which is a company legally and beneficially owned by Mr. C. Y. Fong, Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong as to 99.96%, 0.01%, 0.01%, 0.01% and 0.01%, respectively. As such, Eminent Leader, Mr. C.Y. Fong, Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong are a group of Controlling Shareholders. See ‘‘Relationship with Our Controlling Shareholders — Our Controlling Shareholders’’ for more details.

IMPACT OF THE COVID-19 PANDEMIC

An outbreak of respiratory illness namely COVID-19, caused by a novel coronavirus, was reported in December 2019 and was subsequently declared a pandemic by the World Health Organization in March 2020. In an effort to halt the outbreak, governments around the world placed significant restrictions on travel, implemented mandatory quarantine and/or closed certain businesses, work places and facilities. Measures such as limitation on social gatherings and other similar activities resulted in limited hours of operation for many businesses. As such, the demand for consumer goods, including drinks and beverages, was significantly affected.

For our In-house Brand Products, our production partners and supply chain were, to the best of our knowledge, not materially impacted by the outbreak of the COVID-19 pandemic. We have stocked up our In-house Brand Products in the first quarter of 2020, in anticipation of potential more stringent travel restrictions imposed by the PRC government. However, the movement of goods between China and Hong Kong was generally not severely affected. For our Third-party Brand Products, we experienced temporary delays in transportation due to the international transportation restrictions at various levels implemented by different governments. We have actively increased our inventories and discussed products demand with our customers. As such, such delays did not have any material adverse effects on us.

The sales of our products to the on-trade and off-trade markets, in particular sales to on-trade markets, were materially and adversely impacted by lockdowns, closure of business and social distancing measures, resulting in revenue loss or slower revenue growth. For example, in Hong Kong, substantially all of our sales were from retail customers. Social distancing and health measures at various degrees, including business and school closures, implemented by the government of Hong Kong, resulted in a decline in foot traffic across restaurants, bars and convenience stores, which in turn affected our offline sales. In 2020, our sales from Hong Kong decreased from HK$982.4 million in 2019 to HK$873.3 million in 2020. In China, by the end of April 2020, people’s lives and production activities had gradually resumed normality, with occasional cases of COVID-19 reported in local areas. Our sales from China increased from HK$856.4 million in 2019 to HK$984.3 million in 2020.

For more details, see ‘‘Financial Information — Impact of the COVID-19 Pandemic.’’

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RECENT DEVELOPMENTS

Financial Performance for the Three Months ended March 31, 2021

We have recorded significant sales growth for the three months ended March 31, 2021, compared to the same period in 2020. Our revenue increased by 73.9% from HK$322.9 million for the three months ended March 31, 2020 to HK$561.6 million for the three months ended March 31, 2021.

. Natural, healthy and functional beverages: sales of natural, healthy and functional beverages increased by 33% from HK$78.0 million for the three months ended March 31, 2020 to HK$103.8 million for three months ended March 31, 2021, primarily as a result of the recovery from COVID-19.

. International spirits and wines: sales of international spirits and wines increased by 108.8% from HK$198.0 million for the three months ended March 31, 2020 to HK$413.3 million for the three months ended March 31, 2021, primarily due to the expansion in the PRC market and the recovery from COVID-19.

. Others: sales of other products decreased by 5.1% from HK$46.9 million for the three months ended March 31, 2020 to HK$44.5 million for the three months ended March 31, 2021, primarily due to the decrease in sales of packaged food and snacks in Hong Kong, which was very popular during the first quarter of 2020 when strict social distancing measures and home quarantine were implemented.

Consistent with the recovery from COVID-19 in both Hong Kong and China, sales in Hong Kong increased by 24.0% from HK$191.4 million for the three months ended March 31, 2020 to HK$237.3 million for the three months ended March 31, 2021, and sales in China increased by 146.5% from HK$131.5 million for the three months ended March 31, 2020 to HK$324.3 million for the three months ended March 31, 2021.

Our financial information for the three months ended March 31, 2021 as set out above has been extracted from our unaudited combined financial information for the three months ended March 31, 2021, which has been reviewed by our reporting accountant in accordance with the Hong Kong Standard on Review Engagement 2410 ‘‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’’ issued by the Hong Kong Institute of Certified Public Accountants.

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Trademark Assignment

On June 11, 2021, Telford Enterprise (as assignor) and Telford Beverage Brands (as assignee) entered into two deeds of assignment of trademarks, in relation to 61 Tao Ti trademarks and 25 Meko trademarks assigned to our Group. For details, see ‘‘Business — Intellectual Properties Rights — Trademark Assignment.’’

[REDACTED] EXPENSES

The [REDACTED] expenses represent professional fees, [REDACTED], and other fees incurred in connection with the [REDACTED]. We estimate that our [REDACTED] expenses will be approximately HK$[REDACTED] (assuming an [REDACTED] of HK$[REDACTED] per Share (being the mid-point of the indicative [REDACTED]) and no exercise of the [REDACTED]), of which approximately HK$[REDACTED] is directly attributable to the [REDACTED] of our Shares to the public and will be capitalized and amortized, and approximately HK$[REDACTED] is expected to be expensed in 2021.

[REDACTED] STATISTICS

The statistics in the following table are based on the assumptions that (i) the [REDACTED] has been completed and [REDACTED] Shares are allotted and issued in the [REDACTED], (ii) the [REDACTED] is not exercised, (iii) the [REDACTED] is completed, and (iv) [REDACTED] Shares are issued and outstanding following the completion of the [REDACTED] and the [REDACTED]:

Basedonan Basedonan [REDACTED] of [REDACTED] of HK$[REDACTED] HK$[REDACTED] per Share per Share

[REDACTED]...... HK$[REDACTED] HK$[REDACTED]

[REDACTED] combined net tangible assets per Share(1) ...... HK$[REDACTED] HK$[REDACTED]

Note:

(1) The [REDACTED] adjusted combined net tangible assets per Share is calculated after making the adjustments referred in ‘‘Appendix II — Unaudited Pro Forma Financial Information’’ in this document and on the basis that [REDACTED] Shares are issued and outstanding immediately following the completion of the [REDACTED] and the [REDACTED] (without taking into account any Shares which may be allotted and issued pursuant to the exercise of the [REDACTED]).

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USE OF [REDACTED]

We estimate that we will receive net [REDACTED] of approximately HK$[REDACTED] from the [REDACTED] after deducting the [REDACTED] commissions and other estimated expenses in connection with the [REDACTED] and assuming that the [REDACTED] is not exercised. We intend to use our [REDACTED] from the [REDACTED] for the purposes set forth below:

. Approximately [REDACTED]% or HK$[REDACTED], for enhancing our product and production capabilities including research and development and capital expenditure on new production bases and purchase of equipment;

. Approximately [REDACTED]% or HK$[REDACTED], for enhancing our brand building and sales and marketing capabilities;

. Approximately [REDACTED]% or HK$[REDACTED], for selectively pursuing strategic cooperation with, investments in and acquisitions of renowned brands or other operations that are complementary to our business;

. Approximately [REDACTED]% or HK$[REDACTED], for strengthening our business operations, and environmental, social and governance (ESG) practices; and

. Approximately [REDACTED]% or HK$[REDACTED], for working capital and general corporate use.

See ‘‘Future Plans and Use of [REDACTED]’’ for details.

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In this document, unless the context otherwise requires, the following expressions shall have the following meanings.

‘‘Accountant’s Report’’ the report on the financial information regarding the Group during the Track Record Period, which has been audited by the Reporting Accountant, is set out in ‘‘Appendix I — Accountant’s Report’’

‘‘affiliates’’ any other person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified person

‘‘[REDACTED]’’ [REDACTED]

‘‘Articles’’ or ‘‘Articles of the articles of association of our Company (as amended from time Association’’ to time), conditionally adopted on [.] 2021 which will become effective upon the [REDACTED], a summary of which is set out in ‘‘Appendix III — Summary of the Constitution of Our Company and Cayman Islands Company Law’’

‘‘Audit Committee’’ the audit committee of our Board

‘‘Board’’ or ‘‘Board of Directors’’ the board of Directors of our Company

‘‘business day’’ any day (other than a Saturday, Sunday or public holiday) on which banks in Hong Kong are generally open for normal banking business

‘‘BVI’’ British Virgin Islands

[REDACTED] [REDACTED]

‘‘Cayman Companies Act’’ or the Companies Act (2021 Revision) as consolidated and revised ‘‘Companies Act’’ of the Cayman Islands

‘‘CCASS’’ the Central Clearing and Settlement System established and operatedbyHKSCC

‘‘CCASS Clearing Participant’’ a person admitted to participate in CCASS as a direct clearing participant or general clearing participant

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‘‘CCASS Custodian Participant’’ a person admitted to participate in CCASS as a custodian participant

’’[REDACTED]’’ [REDACTED]

‘‘CCASS Investor Participant’’ a person admitted to participate in CCASS as an investor participant who may be an individual or joint individuals or a corporation

‘‘CCASS Participant’’ a CCASS Clearing Participant, a CCASS Custodian Participant or a CCASS Investor Participant

‘‘Companies Ordinance’’ the Companies Ordinance (Chapter 622 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

‘‘Companies (Winding Up and the Companies (Winding Up and Miscellaneous Provisions) Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong), as amended, Ordinance’’ or ‘‘Companies supplemented or otherwise modified from time to time (WUMP) Ordinance’’

‘‘Company’’ or ‘‘our Company’’ Telford International Holdings Limited (滙泉國際控股有限公司), a company incorporated under the laws of the Cayman Islands with limited liability on March 30, 2021

‘‘Controlling Shareholders’’ has the meaning given to it in the Listing Rules and, unless the context requires otherwise, refers to Eminent Leader, Mr. C. Y. Fong, Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and/ or Mr. Vincent Fong

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‘‘Corporate Governance Code’’ the Corporate Governance Code as set out in Appendix 14 to the Listing Rules, as amended, supplemented or otherwise modified from time to time

‘‘COVID-19’’ a viral respiratory disease caused by the severe acute respiratory syndrome coronavirus 2

‘‘Deed of Indemnity’’ the deed of indemnity dated [.] 2021 and entered into by our Controlling Shareholders in favor of our Company (for ourselves and as trustee for our subsidiaries), particulars of which are set out in ‘‘Appendix IV — Statutory and General Information — E. Other Information — 1. Tax and Other Indemnities’’

‘‘Deed of Non-competition’’ the deed of non-competition dated [.]2021andenteredintoby our Controlling Shareholders in favor of our Company (for ourselves and as trustee for our subsidiaries), particulars of which are set out in ‘‘Relationship with our Controlling Shareholders — Non-competition Undertakings’’

‘‘Director(s)’’ the director(s) of our Company

‘‘EIT Law’’ Enterprise Income Tax Law of the PRC (中華人民共和國企業所得稅法)

‘‘Eligible Employees’’ all full-time and part-time employee(s) of our Group who (a) is at least 18 years of age; (b) remains as a full-time or part-time employee of our Company or any of our subsidiaries, and is not on probation, as of [REDACTED]; (c) has not tendered resignation or been given notice of termination of employment for any reason other than redundancy or retirement on or before [REDACTED]; (d) is not the chief executive or a director of our Company or our subsidiaries; (e) is neither an, nor an associate of an existing beneficial owner of Shares or of shares of any of our subsidiaries; and (f) is not a connected person of our Company

‘‘Eminent Dragon’’ Eminent Dragon Limited, a company incorporated in the BVI with limited liability on January 8, 1999 and wholly-owned by Eminent Leader prior to the Reorganization and a direct wholly- owned subsidiary of our Company upon completion of the Reorganization

‘‘Eminent Leader’’ Eminent Leader Limited, a company incorporated in the BVI with limited liability on January 8, 1999 and owned as to 99.96%, 0.01%, 0.01%, 0.01% and 0.01% by Mr. C. Y. Fong, Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong respectively, and a Controlling Shareholder

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‘‘[REDACTED]’’ [REDACTED]

‘‘Extreme Conditions’’ extreme conditions caused by a super typhoon as announced by the government of Hong Kong

‘‘financial year’’ financial year ended or ending December 31

‘‘Fong’s Logistics’’ Fong’s Logistics Limited (方氏物流有限公司), a company incorporated in Hong Kong with limited liability on February 13, 1992 and legally owned as to 8,999 shares by Eminent Dragon and 1 share by Mr. C. Y. Fong and beneficially owned as to 100% by Eminent Dragon before the Reorganization and an indirect wholly-owned subsidiary of our Company after the Reorganization

‘‘Frost & Sullivan’’ Frost & Sullivan International Limited, an Independent Third Party market research and consulting company

‘‘F&S Report’’ an independent market research report commissioned by our Company on China and Hong Kong’s alcoholic beverage and soft beverage markets and prepared by Frost & Sullivan

‘‘[REDACTED]’’ [REDACTED]

‘‘Global Rising’’ Global Rising International Limited, a company incorporated in Hong Kong with limited liability on March 6, 2020 and wholly- owned by Eminent Leader, and a connected person of our Company

‘‘[REDACTED]’’ [REDACTED]

‘‘Group’’, ‘‘our Group’’, ‘‘we’’ or our Company and our subsidiaries and, in respect of the period ‘‘us’’ before our Company became the holding company of our present subsidiaries, the businesses operated by such subsidiaries or their predecessors (as the case may be)

‘‘HK’’ or ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

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‘‘[REDACTED]’’ [REDACTED]

‘‘HK$’’ or ‘‘HKD’’ Hong Kong dollars, the lawful currency of Hong Kong or ‘‘Hong Kong dollars’’

‘‘HKFRS’’ the Hong Kong Financial Reporting Standards issued by the HKICPA

‘‘HKICPA’’ the Hong Kong Institute of Certified Public Accountants

‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited, a wholly- owned subsidiary of Hong Kong Exchanges and Clearing Limited

‘‘HKSCC Nominees’’ HKSCC Nominees Limited, a wholly-owned subsidiary of HKSCC, in its capacity as nominee for HKSCC (or any successor thereto) as operator of CCASS and any successor, replacement or assign of HKSCC Nominees Limited as nominee for the operator of CCASS

‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

‘‘[REDACTED]’’ [REDACTED]

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‘‘[REDACTED]’’ [REDACTED]

‘‘Independent Third Party’’ individual(s) or company(ies) who is (or are) not a connected person (within the meaning of the Listing Rules) of our Company, any of our subsidiaries or any of their respective associates

‘‘[REDACTED]’’ [REDACTED]

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‘‘[REDACTED]’’ [REDACTED]

‘‘Joint Sponsors’’ Jefferies Hong Kong Limited and HSBC Corporate Finance (Hong Kong) Limited

‘‘Latest Practicable Date’’ June 21, 2021, being the latest practicable date for the purpose of ascertaining certain information contained in this document prior to its publication

‘‘[REDACTED]’’ [REDACTED]

‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange, as amended, supplemented or otherwise modified from time to time

‘‘Macau’’ the Macau Special Administrative Region of the PRC

‘‘[REDACTED]’’ [REDACTED]

‘‘Memorandum’’ or ‘‘Memorandum the amended and restated memorandum of association of our of Association’’ Companyadoptedbyaspecialresolutionon[.], 2021, as amended from time to time, a summary of which is set out in ‘‘Appendix III — Summary of the Constitution of Our Company and Cayman Islands Company Law’’

‘‘Memorandum and Articles of the Memorandum and the Articles of our Company Association’’

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‘‘Migo’’ Migo (HK) Limited (美高(香港)有限公司), a company incorporated in Hong Kong with limited liability on January 10, 2003 and legally owned as to 1 share by Eminent Dragon and 1 share by Mr. C. Y. Fong and beneficially owned as to 100% by Eminent Dragon prior to the Reorganization and a wholly-owned subsidiary of Eminent Leader upon completion of the Reorganization

‘‘Ming Tai’’ Ming Tai Wholesaling Company Limited, a company incorporated in Hong Kong with limited liability on September 2, 2002 which is owned as to 50% by each of Mr. FONG Kwan Ming (方坤明) andMs.TSOYing(曹瑩), and a connected person of our Company

‘‘[REDACTED]’’ [REDACTED]

‘‘MOFCOM’’ the Ministry of Commerce of the PRC (中華人民共和國商務部)

‘‘MOP’’ Macau Pataca, the lawful currency of Macau

‘‘Mr.C.Y.Fong’’ Mr. FONG Chin Yue, a Controlling Shareholder, the spouse of Ms. Kay and father to Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong

‘‘Mr. Kenneth Fong’’ Mr. FONG Chun Man, our chairman, chief executive officer, an executive Director, a Controlling Shareholder, the son of Mr. C. Y. Fong and Ms. Kay and brother to Ms. Lucia Fong, Ms. Emily Fong and Mr. Vincent Fong

‘‘Mr. Vincent Fong’’ Mr. FONG Chun Keung Vincent, our vice chairman, chief executive officer (China), an executive Director, a Controlling Shareholder, the son of Mr. C. Y. Fong and Ms. Kay, and brother to Ms. Lucia Fong, Mr. Kenneth Fong and Ms. Emily Fong

‘‘Ms. Emily Fong’’ Ms. FONG So Kam Emily, a Controlling Shareholder, the daughter of Mr. C. Y. Fong and Ms. Kay, and sister to Ms. Lucia Fong, Mr. Kenneth Fong and Mr. Vincent Fong

‘‘Ms. Kay’’ Ms. KAY Sik Ching, the spouse of Mr. C. Y. Fong and mother to Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong

‘‘Ms. Lucia Fong’’ Ms. FONG So Ching Lucia, our vice chairlady, chief financial officer, an executive Director, a Controlling Shareholder, the daughter of Mr. C. Y. Fong and Ms. Kay, and sister of Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong

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‘‘Nomination Committee’’ the nomination committee of our Board

‘‘[REDACTED]’’ [REDACTED]

‘‘PRC’’ or ‘‘China’’ the People’s Republic of China, but for the purpose of this document and for geographical reference only and except where the context requires, references in this document to the ‘‘PRC’’ and ‘‘China’’ do not apply to Hong Kong, Macau and Taiwan

‘‘PRC Legal Advisor’’ Allbright Law Offices (Shenzhen), legal advisor to our Company as to PRC laws

‘‘[REDACTED]’’ [REDACTED]

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‘‘Remuneration Committee’’ the remuneration committee of our Board

‘‘Reorganization’’ the reorganization of our Group in preparation for the [REDACTED], details of which are set out in ‘‘History, Reorganization, Development and Corporate Structure — Reorganization’’

‘‘Richmen’’ Richmen Enterprises Limited (裕民企業有限公司), a company incorporated in Hong Kong with limited liability on October 23, 1998 and wholly-owned by Eminent Leader, and a connected person of our Company

‘‘RMB’’ Renminbi, the lawful currency of the PRC

‘‘[REDACTED]’’ [REDACTED]

‘‘SAFE’’ the State Administration of Foreign Exchange of the PRC (中華人民共和國國家外匯管理局)

‘‘SFC’’ the Securities and Futures Commission of Hong Kong

‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

‘‘Share Option Scheme’’ the share option scheme conditionally adopted by our Company, a summary of the principal terms of which is set out in ‘‘Appendix IV — Statutory and General Information — D. Share Option Scheme’’

‘‘Shareholder(s)’’ holder(s) of Shares

‘‘Shares’’ ordinary shares in the share capital of our Company with a nominal value of HK$0.01 each

‘‘[REDACTED]’’ [REDACTED]

‘‘Star Vision’’ Star Vision International Limited, a company incorporated in the BVI with limited liability on July 4, 2001 and wholly-owned by Eminent Leader, and a connected person of our Company

‘‘[REDACTED]’’ [REDACTED]

‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

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‘‘Takeovers Code’’ the Code on Takeovers and Mergers and Share Buy-backs issued by the SFC, as amended, supplemented or otherwise modified from time to time

‘‘Telford (China)’’ Telford (China) Company Limited (匯泉(中國)有限公司), a company incorporated in Hong Kong with limited liability on September 11, 2002 and wholly-owned by Eminent Dragon, and an indirect wholly-owned subsidiary of our Company upon completion of the Reorganization

‘‘Telford Beverage Brands’’ Telford Beverage Brands Company Limited (匯泉飲料品牌有限公司), a company incorporated in Hong Kong with limited liability on May 13, 2021 and wholly-owned by Eminent Dragon, and an indirect wholly-owned subsidiary of our Company upon completion of the Reorganization

‘‘Telford Enterprise’’ Telford International Enterprise Limited (匯泉國際企業有限公司), a company incorporated in Hong Kong with limited liability on November 26, 2003 and wholly-owned by Eminent Leader, and a connected person of our Company

‘‘Telford Industries’’ Telford International Industries Limited (匯泉國際實業有限公司), a company incorporated in Hong Kong with limited liability on May 22, 2008 and wholly-owned by Eminent Dragon, and an indirect wholly-owned subsidiary of our Company upon completion of the Reorganization

‘‘Telford International’’ Telford International Company Limited (匯泉國際有限公司), a company incorporated in Hong Kong with limited liability on June 4, 1982 and legally owned as to 499,999 shares by Eminent Dragon and 1 share by Mr. C. Y. Fong and beneficially owned as to 100% by Eminent Dragon prior to the Reorganization, and an indirect wholly-owned subsidiary of our Company upon completion of the Reorganization

‘‘Telford Macau’’ Telford Macau LDA. (Telford Macau Limited 匯泉澳門有限公司), a company established in Macau on December 15, 2009 and owned as to 25% by Telford International and 75% by Ms. Carolina Sam, an Independent Third Party, and an associated company of our Company upon completion of the Reorganization

‘‘Telford Shenzhen’’ Shenzhen Telford Trading Company Limited (深圳匯泉貿易有限公司), a company established in the PRC on January 7, 2002 and wholly-owned by Telford (China), and an indirect wholly-owned subsidiary of our Company upon completion of the Reorganization

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‘‘Telford Spirits Brands’’ Telford Spirits Brands Company Limited (匯泉洋酒品牌有限公司), a company incorporated in Hong Kong with limited liability on May 13, 2021 and wholly-owned by Eminent Dragon, and an indirect wholly-owned subsidiary of our Company upon completion of the Reorganization

‘‘Telford Wine & Spirits (C)’’ Telford Wine & Spirits (China) Limited (匯泉洋酒(中國)有限公司), a company incorporated in Hong Kong on November 10, 2006 and wholly-owned by Telford (China), and an indirect wholly-owned subsidiary of our Company upon completion of the Reorganization

‘‘Telford Wine & Spirits (S)’’ Telford Wine & Spirits (Shanghai) Limited (匯泉(上海)洋酒貿易有限公司), a company established in the PRC on May 24, 2007 and wholly-owned by Telford Wine & Spirits (C), and an indirect wholly-owned subsidiary of our Company upon completion of the Reorganization

‘‘Track Record Period’’ the three years ended December 31, 2020

‘‘[REDACTED]’’ [REDACTED]

‘‘US’’ or ‘‘United States’’ the United States of America, its territories and possessions, any state of the United States and the District of Columbia

‘‘[REDACTED]’’ [REDACTED]

‘‘US$’’ or ‘‘USD’’ United States dollars, the lawful currency of the US

‘‘Venmart’’ Venmart International Limited, a company incorporated in Hong Kong with limited liability on April 26, 2019 and owned as to 51% and 49% by Star Vision and Gritus Limited respectively, and a connected person of our Company

‘‘Wing Tai’’ Wing Tai Liquor & Fruit Company Limited (永泰洋酒鮮果有限公司), a company incorporated in Hong Kong with limited liability on December 20, 2002 and wholly-owned by Eminent Dragon, and an indirect wholly-owned subsidiary of our Company upon completion of the Reorganization

‘‘Xihai (Shanghai)’’ Xihai (Shanghai) Catering Management Limited (希亥(上海)餐飲管理有限公司), a company established in the PRC on January 29, 2021 and wholly-owned by Telford Wine & Spirits (S), and an indirect wholly-owned subsidiary of our Company upon completion of the Reorganization

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In this document, the terms ‘‘associate’’, ‘‘close associate’’, ‘‘connected person’’, ‘‘core connected person’’, ‘‘connected transaction’’, ‘‘subsidiary’’ and ‘‘substantial shareholder’’, and their respective plural form, shall have the meanings given to such terms in the Listing Rules, unless the context otherwise requires.

The English translation of the PRC entities, enterprises, nationals, facilities, regulations in Chinese or another language included in this document is for identification purposes only. To the extent there is any inconsistency between the Chinese names of the PRC entities, enterprises, nationals, facilities, regulations and their English translations, the Chinese names shall prevail.

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‘‘alcoholic beverage market’’ for the purpose of this document, refers generally to the market for drinks produced by fermenting or distilling ethanol from fermentation of grains, fruits or other vegetables, including (i) spirits, including Chinese spirits, such as traditional baijiu, and international spirits consist of brandy, whisky, vodka, rum, gin, tequila and others; (ii) wines from fermented grapes including still wines, sparkling; wines and other wines; (iii) beer brewed from cereal grains; (iv) pre-mixed, such as bottled cocktails and other flavored ready-to-drink alcoholic beverages with relatively lower alcohol content at under 9.0% ABV (alcohol by volume); and (v) others, including ciders, Chinese huangjiu, sake, and others

‘‘brand partner’’ or ‘‘Third-party refers generally to partners who are entitled to the interest of the Brand Partner’’ Third-party Brand Products and have granted us their distribution right in a particular region

‘‘brown spirits’’ generallyrefertospiritswithdarkcolor,suchaswhiskyand cognac

‘‘GFA’’ gross floor area

‘‘In-house Brand Product’’ products that are under arranged production by us and marketed under one of the In-house Brands

‘‘In-house Brand(s)’’ (i) Tao Ti and Meko, to which we are entitled to all rights, titles and interests pursuant to the relevant deed of assignment between Telford Enterprise and Telford Beverage Brands, and (ii) those brands of which we have the exclusive right-to-use pursuant to the relevant trademark license arrangement between Telford Enterprise and/or Global Rising with us. The portfolio of our In- house Brands may be adjusted from time to time

‘‘international spirits and wines’’ for the purpose of this document, refers generally to the international spirits consisting of brandy, whisky, vodka, rum, gin, tequila and others, and wines from fermented grapes consisting of still wines, sparkling wines and other wines

‘‘keg’’ a measurement for liquid volumes. A keg, or half-barrel is 5 U.S. gallons. Since keg sizes are not standardized and vary from country to country, the keg cannot be used as a standard unit of measure for liquid volumes

‘‘KOL’’ key opinion leader

‘‘natural-brew’’ refers generally to a traditional way to brew tea with natural ingredients

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‘‘natural, healthy and functional for the purpose of this document, refers to packaged ready-to- beverages’’ drink soft beverages, with one or more of the attributes of being natural, healthy and/or functional, including flavored packaged ready-to-drink soft beverages such as (i) natural juice and juice flavored beverage, (ii) protein beverage, (iii) functional beverage, (iv) tea beverage, (v) botanical beverage, and (vi) coffee beverage

‘‘off-trade’’ retail outlets, off whose premises the consumption of products usually takes place, such as hypermarkets, supermarkets, convenience stores and specialty retailers in spirits and wines

‘‘on-trade’’ retail outlets, on whose premises the consumption of products usually takes place, such as restaurants, clubs, bars and hotels

‘‘postmix’’ the semi-finished beverage product made from a flavored syrup or concentrate of a soft drink. At the point of sale, typically a fast food restaurant chain or a convenience store chain, the soft drink will be mixed to order from the postmix syrup, chilled and purified water, and carbon dioxide (from a gas cylinder), and usually dispensed from a soda fountain or soda gun

‘‘RTD’’ ready-to-drink

‘‘SKU’’ stock-keeping unit. It is a product code that can be used to search and identify stock and track our inventory. Same product with different size or packaging will be assigned with different product codes for ease of management, and therefore, one product may have more than one SKU

‘‘soft beverage market’’ for the purpose of this document, refers to the packaged ready-to- drink soft beverage market, including (i) packaged water including sparkling water and other water with artificial flavors; (ii) natural juice and juice flavored beverage including beverages that are flavored with natural juice; (iii) protein beverage including beverages with milk or plant-based protein contents; (iv) functional beverage including energy and sports beverages, and other nutritional beverages; (v) carbonated beverage with artificial flavors and no specific health functions; (vi) tea beverage that is made of the extract or concentrates of tea leaves; (vii) botanical beverage that is made from the infusion or decoction of herbs; (viii) coffee beverage that is made of coffee beans or other coffee products; and (ix) other beverages

‘‘white spirits’’ refers generally to colorless spirits, such as gins and vodka

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‘‘Third-party Brand Product’’ products whose distribution right is granted to us and the distribution of which is done through our sales and distribution network; for the purpose of this document, it also includes products that we produce for Third-party Brands. The portfolio of Third-party Brand Products may be adjusted from time to time

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This document includes forward-looking statements. All statements other than statements of historical facts contained in this document, including, without limitation, those regarding our future financial position, our strategy, plans, objectives, goals, targets and future developments in the markets where we participate or are seeking to participate, and any statements preceded by, followed by or that include the words ‘‘believe,’’ ‘‘expect,’’ ‘‘estimate,’’ ‘‘predict,’’ ‘‘aim,’’ ‘‘intend,’’ ‘‘will,’’ ‘‘may,’’ ‘‘plan,’’ ‘‘consider,’’ ‘‘anticipate,’’ ‘‘seek,’’ ‘‘should,’’ ‘‘could,’’ ‘‘would,’’ ‘‘continue,’’ or similar expressions or the negative thereof, are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and are difficult to predict, which may cause our actual results, developments, performance or achievements, or industry results, to be materially different from any future results, developments, performance or achievements expressed or implied by the forward-looking statements. These forward- looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. Important factors that could cause our actual results, developments, performance or achievements to differ materially from those in the forward-looking statements include, among others, the following:

. our ability to successfully implement our business plans and strategies;

. future developments, trends and conditions in the industry and markets in which we operate or into which we intend to expand;

. our business prospects;

. the actions and developments of our competitors;

. changes in consumer spending;

. our ability to maintain good relationship with our customers and other business partners;

. our ability to continue to introduce competitive new products on a timely and cost-effective basis;

. our financial condition and performance;

. limitations on our ability to contain costs and expenses;

. any changes in the laws, rules and regulations in Hong Kong, the PRC and other relevant jurisdictions and the rules, regulations and policies (including currency controls) of the relevant governmental authorities relating to all aspects of our business and our business plans;

. natural and other disasters;

. macro-economic measures adopted by the relevant government to manage economic growth;

. changes in the global economic conditions and material volatility in the global financial markets;

. natural and other disasters; and

. other factors beyond control.

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Additional factors that could cause actual performance or achievements to differ materially include, but are not limited to, those discussed under ‘‘Risk Factors’’ and elsewhere in this document. We caution you not to place undue reliance on these forward-looking statements, which reflect our management’s view only as of the date of this document. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this document might not occur. All forward-looking statements contained in this document are qualified by reference to the cautionary statements set out in this section.

In this document, statements of or references to our intentions or that of any of our Directors are made as of the date of this document. Any of these intentions may change in light of future developments.

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An investment in our Shares involves significant risks. You should carefully consider all of the information in this document, including the risks and uncertainties described below, as well as our financial statements and the related notes, before deciding to invest in our Shares. The following is a description of what we consider to be our material risks. Any of the following risks could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In any such event, the market price of our Shares could decline, and you may lose all or part of your investment.

We believe there are certain risks and uncertainties involved in our operations, some of which are beyond our control. We have categorized these risks and uncertainties into: (i) risks relating to our business and industry; (ii) risks relating to jurisdictions in which we operate; and (iii) risks relating to the [REDACTED]. You should consider our business and prospects in light of the challenges we face, including the ones discussed in this section.

RISKS RELATING TO OUR BUSINESS AND INDUSTRY

We operate in a highly competitive industry, which may affect our market share and results of operations.

We are a leading beverage company in Hong Kong and China and generally face strong competition in the beverage market, based upon brand recognition, flavor, quality, price, availability and selection of the products. We compete primarily with other beverage companies, including brand owners and distribution companies, which may have been in business longer than we have and may have greater financial, research and development, distribution and other resources than us. We cannot assure you that our current or potential competitors will not provide products comparable or superior to those we offer adapt more quickly to evolving industry trends or changing market requirements. It is also likely that other beverage companies may develop or strengthen their sales and distribution capabilities and there will be consolidation or alliances among our competitors and wholesalers in the beverage industry, which may change the competition landscape. All of these events may cause our business and results of operations to be adversely affected.

In addition, our competitors may substantially increase their advertising expenditures and promotional activities or engage in irrational or predatory pricing behavior in response to the market competition and to acquire more market share. Our advertising expenses may not be sufficient to compete with our competitors. Furthermore, competition may result in price reductions, reduced margins and loss of market share, any of which could have an adverse impact on our profit margins and results of operations.

Furthermore, we cannot assure you that we would be able to expand our market share gradually as planned or even maintain our current market share in the future. If we are unable to achieve our business target with respect to our market share or our market share shrinks as a result of various unexpected reasons, our market share, business, financial condition and results of operations could be materially and adversely affected.

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Our business relies on consumer demand for the beverage products we offer. Any shift in consumer demand, or any unexpected situation with a negative impact on consumer demand, may materially and adversely affect our business and results of operations.

Our business relies on consumer demand for the beverage products we offer, which depends substantially on factors such as (i) consumer preferences and tastes; (ii) consumer spending patterns; (iii) consumer income; (iv) consumer perceptions of and confidence in our product quality; and (v) consumer awareness and pursuit of a natural and healthy lifestyle. Driven by consumption upgrade and increasing disposable income, the demands for import international spirits and wines, and natural, healthy and functional beverages, particularly low-calorie and low-sugar options, have been growing continuously. Changes in any of the above at any time could result in decline in consumer demand for the beverage products we offer. Our business development will depend partly on our ability to (i) accurately anticipate changes in market demand and consumer preferences, (ii) introduce new attractive products in a timely manner, and (iii) differentiate the quality of our products from those of our competitors; and (iv) develop appropriate and effective marketing and sales strategies accordingly. If we fail to anticipate or respond to changes in customer preferences or fail to bring products to market in a timely manner to satisfy customers’ evolving preferences, our market share and our sales and profitability could be adversely affected.

Any failure to adapt our product offering to respond to changing choices and preferences of consumers may result in a decrease in our sales if such changes are related to certain of our products. Any changes in consumer preferences could result in lower sales of our products, and put pressure on pricing or lead to increased levels of selling and promotional expenses. In any event, a decrease in customer demand for our products may also result in lower sales and increase our inventory turnover days. Any of these changes could result in a material adverse effect on our business, financial condition or results of operations.

If we fail to continue to develop, launch and promote our new In-house Brand Products, our business and results of operations may be adversely affected.

In light of the highly competitive and volatile environment of the beverage industry, our future growth depends on our ability to continue to expand and enhance our product offerings through continuous product development. To develop and launch new products, we need to devote significant resources to researching and developing our products, and selecting suitable suppliers of raw materials and packaging materials. All these tasks involve risks, and require substantial planning, effective execution and significant expenditures. We cannot assure you that our new In-house Brand Products will gain market acceptance or meet the particular tastes or requirements of consumers. We also cannot assure you that our new In-house Brand Products will be able to generate positive cash flows or become profitable within a short period of time or at all. This could in turn lead to our inability to recover our research and development, production and marketing costs. In addition, we may fail to reduce promotion of our products that are experiencing declining consumption in a timely and cost-effective manner.

If we fail to introduce new products in a cost-effective manner, improve our portfolio of products and satisfy consumers’ changing preferences, our business, results of operations and financial condition may be adversely affected.

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Failure to maintain relationships with our existing Third-party Brand Partners or attract new Third-party Brand Partners may materially and adversely affect business, financial condition and results of operations.

We principally enter into short term (typically one year) contracts with our Third-party Brand Partners. There is no assurance that we will be able to maintain long-term business relationships with our current Third-party Brand Partners. Our sales and operating income could be materially and adversely affected if we lose one or more of our major Third-party Brand Partners, or if our Third-party Brand Partners’ business plans or markets change materially. Our business relationships with our Third- party Brand Partners may be terminated if they become acquired by other companies or closure of business. In addition, there is no assurance that our current or future arrangements with our major Third- party Brand Partners can be negotiated on terms and prices equivalent to or more favorable than current terms and prices. We may be unable to secure alternative Third-party Brand Partners of similar quality at prices and terms acceptable to us, and the loss of major Third-party Brand Partners, or adverse change to trade terms with such significant Third-party Brand Partners, could materially and adversely affect our business, financial condition and results of operations.

We rely on a number of Third-party Brand Partners to provide us with their Third-party Brand Products during the Track Record Period, and any shortage of, or delay in supply from such major Third-party Brand Partners could adversely and substantially affect our operations and financial conditions.

We rely on a number of Third-party Brand Partners to provide us with their Third-party Brand Products. In particular, in 2020, purchases from our largest Third-party Brand Partner accounted for approximately 24.2% of our total purchases. Although we offer a wide array of products for and maintain stable relationships with our Third-party Brand Partners, there is no assurance that our Third- party Brand Partners will be able to supply the Third-party Brand Products to us in a timely manner, or that they will not increase the prices of, or reduce or cease to supply Third-party Brand Products to us. In turn, we may lose our existing customers if we cannot provide a stable supply of our products to them, resulting in our business, financial condition and results of operations being materially and adversely affected.

Our marketing and promotional activities may not be effective in attracting consumers, which may in turn adversely affect our results of operations.

We conduct various marketing activities to promote our brands and products to consumers. We communicate with consumers in a comprehensive approach through advertising via social media platforms and traditional media channels, celebrities and key opinion leaders endorsements, and cross- over cooperation. These marketing campaigns may incur significant marketing expenses, though we typically share advertising expenses with our brand partners. In 2018, 2019 and 2020, our advertising expenses were HK$72.5 million, HK$67.4 million and HK$69.4 million, respectively, which represented 5.4%, 3.7% and 3.7% of our total revenue, respectively.

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We cannot assure you that our marketing activities will enable us to achieve our sales targets. The effectiveness of sales and marketing activities is relatively hard to predict and evaluate. Their effects may be delayed, resulting in a delayed revenue growth which may not be fully reflected during the period in which the sales and marketing activities took place. If the results of our marketing activities fail to meet our expectations, or if we fail to conduct the marketing activities as planned, our results of operations, financial condition, market share, brand and reputation may be adversely affected. During the Track Record Period, there was no dispute between us and our brand partners regarding the reimbursement of marketing expenses as stipulated in our framework agreements. However, we cannot assure you that such disputes, if they arise, will not prolong the process of us obtaining reimbursement from our brand partners and result in a temporary increase in our advertising expenses, which may negatively affect our results of operations and financial condition.

Our success depends on the market recognition of the well-established brand names of our products, and any damage to it could materially and adversely affect our business and results of operations.

Our success is attributable to the well-established brand names of the products we offer. We have implemented various marketing strategies including both traditional marketing activities and the use of social media to promote and enhance the brand image of our In-house Brands and Third-party Brands. However, the reputation and brand image of our In-house Brands and Third-party Brands may be adversely affected by different factors which may be beyond our control, such as: (i) adverse associations with these brands; (ii) decline in the public image or popularity of any of the spokespersons or KOL representing or endorsing these brands; and (iii) the effects of counterfeit products purporting to be our In-house Brand Products and Third-party Brand Products. Any other incident that damages our customers’ trust and confidence in our In-house Brand Products and Third-party Brand Products may also damage our brand recognition, which would in turn adversely affect our business and results of operations.

Any product quality issue could materially and adversely affect our results of operations.

We believe that the quality of our products is critical to our success. In addition to risks associated with the production of the postmix in our production site, some third parties, such as (i) production partners which produce our In-house Brand Products, (ii) suppliers of raw materials, (iii) logistics and warehousing service providers, (iv) regional wholesalers and dealers, and (v) retailers, could also affect the quality of our products or lead to inventory obsolescence if these third parties fail to provide raw materials, packaging materials or services to us with satisfactory quality.

We have established stringent quality control systems to ensure the quality of our In-house Brand Products. Our quality control systems primarily consist of quality control measures for raw materials, production processes, finished goods storage, and delivery and sales. See ‘‘Business — Procurement and Suppliers’’ and ‘‘Business — Quality Control.’’ The effectiveness of our quality control systems depends on a number of factors, including the design of our quality control systems and our ability to ensure our employees are complying with our quality control policies and procedures. We cannot assure you that the design of our quality control systems will be effective at all times. We also cannot assure you that all our employees will always comply with our quality control policies and will not make mistakes when executing quality control procedures.

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Any product quality issue resulting from the failure of our quality control systems or other reasons could expose us to product liability claims, product recalls or returns, negative publicity, government scrutiny, investigation or intervention and administrative actions, which could materially and adversely affect our brand, reputation, results of operations, financial condition and business prospects.

Our production partners’ inability to consistently adhere to quality measures and standards, or disruption in the supply of our products, would result in loss to us and could adversely affect our reputation and brand.

During the Track Record Period, we outsourced the production of our In-house Brand Products to Independent Third Party production partners. As of the Latest Practicable Date, we had four production partners, with whom we maintain long-term business relationships on an average of 10 years. In 2018, 2019 and 2020, costs related to our production partners’ activities were approximately HK$137.0 million, HK$131.4 million and HK$127.3 million, respectively. Over the same period, revenue generated from the In-house Brand Products was approximately HK$335.7 million, HK$343.1 million and HK$307.3 million, respectively, accounting for 24.8%, 18.7% and 16.5% of our total revenue respectively.

We cannot guarantee that our production partners will consistently manufacture our products in accordance with the quality control measures and standards set forth in our contracts with them. Failures by production partners to adhere to these quality control measures and standards or to consistently produce according to the specifications we set could damage our reputation and brand image and may lead to product liability claims or product recalls.

Additionally, our production partners may decide not to accept our future orders on the same or similar terms or at all. If a production partner decides to substantially reduce its production capacity for our In-house Brand Products, or increase the production price or terminate its business relationship with us, or fails to provide the required amount of products meeting our quality standards or on a timely basis, we may need to locate alternative production partners to meet our demands in a timely manner or at prices acceptable to us, the failure of which may result in delays in the delivery of the In-house Brand Products or defaults on our agreements with our retailers and wholesalers. If the products failing to meet our quality standards have already been sold to our customers and wholesales, we may need to recall these products, resulting in additional costs, and our reputation may be adversely affected.

A number of factors could also cause prolonged interruptions or have a negative effect on the operations of these production partners, such as equipment failures or property damages experienced by these production partners, changes in laws and regulations that affect their manufacturing costs or process or financial difficulties or labor disputes faced by these production partners. Moreover, we may be unable to exercise adequate control over the operations of our production partners and as a result are not able to ensure their compliance with applicable laws and regulations. Failure on the part of any of our production partners to comply with applicable laws and regulations, such as product, labor and environmental related laws and regulations, may result in negative publicity which may damage our image and reputation and materially and adversely affect our business and profitability. In addition, failure to maintain confidentiality of our proprietary product recipes by our production partners may adversely affect sales of our In-house Brand Products, our competitiveness and business operations. Any

– 36 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. RISK FACTORS of the above events may also materially and adversely damage our relationships with our retailers and wholesalers or disrupt the supply of our In-house Brand Products, causing a material and adverse effect on our business, financial condition and results of operations.

We are susceptible to the popularity of various brands that we service, and may be adversely affected by, among other things, product quality.

We offer a wide collection of Third-party Brand Products, which can be broadly categorized into: (i) international spirits and wines; (ii) natural, healthy and functional beverages; and (iii) other products, such as beers, sakes, other soft beverages, postmix and packaged food and snacks. Through our continuous efforts on global procurement from international brand owners, as of December 31, 2020, our international spirits and wines category comprised 1,434 SKUs under 164 brands, our natural, healthy and functional beverages category comprised 252 SKUs under nine brands, and our other products category comprised 293 SKUs under 36 brands. During the Track Record Period, we procured Third- party Brand Products mainly from the United States, Europe, Japan, South East Asia and Chile.

We are subject to exclusivity arrangements with a number of Third-party Brand Partners. We do not service products from other brands which are in direct competition with some our Third-party Brand Products. There is no assurance that our Third-party Brand Products will continue to satisfy the changing customer trends and preferences. If customer demands shift to products which are in direct competition with such Third-party Brand Products, we would be unable to offer such products to meet consumer demand, or compete against our competitors, and our business, results of operations and financial condition could be adversely affected.

In addition, we are susceptible to the popularity of various brands that we service, which could be adversely affected by product quality. We generally do not conduct product quality checks on the Third- party Brand Products produced by brand partners, as we are not responsible for their product quality control and instead rely on the product information they provide to us. We cannot guarantee the accuracy of such product information or the quality of such products. In the event of product liability claim or product recall brought against our brand partners or the Third-party Brand Products, whether or not it is ultimately successful, the negative publicity associated with such claim or a product recall campaign could have an adverse effect on our business, results of operations and financial condition.

Our revenue may be adversely affected by the competition from Duty-Free stores or online platforms which may offer more price-competitive products.

The spirits and wines industry in Hong Kong and China is highly competitive. There are a considerable number of market players of different sizes with convenient locations, including but not limited to Duty-Free stores and online platforms, which may import and offer tariffs-free spirits and wines at a lower price than us. We may lose our customers if they opt to purchase international spirits and wines through Duty-Free stores or online platforms, which could adversely affect our business, results of operations, financial condition and profitability.

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Our production of In-house Brand Products depends on a stable and adequate supply of raw materials, which are subject to price volatility and other risks.

We rely on our production partners for the production of In-house Brand Products. Volume and costs in relation to the production depend on, among other things, our ability to source raw materials at acceptable prices and maintain a stable and sufficient supply of raw materials. In addition, such volume and costs are also dependent on our ability to control the costs of these production partners. Raw materials used in the production of In-house Brand Products are subject to price volatility caused by external conditions, such as supply and demand dynamics, climate and environmental conditions, commodity price fluctuations, currency fluctuations, inflation, and changes in governmental and agricultural policies. We expect that our raw material prices will continue to fluctuate and be affected by inflation in the future, which in turn will affect the production costs charged by our production partners. Price changes to our raw materials may result in unexpected increases in production and packaging costs, and if we are unable to manage these costs or increase the prices of our products to offset these increased costs, our profitability will decrease.

If all or a significant number of our suppliers for any particular raw material are unable or unwilling to meet our requirements, we could suffer shortages or substantial cost increases. Changing raw material suppliers can require long lead times. The failure of our raw material suppliers to meet our needs could occur for various reasons, including fires, natural disasters, weather, manufacturing problems, disease, crop failure, strikes, transportation interruption, government regulation, political instability and terrorism. A failure of supply could also occur due to suppliers’ financial difficulties, including bankruptcy. Continued supply disruptions could exert pressure on our costs and we may be unable to pass along any resulting increases to our customers or consumers, which could negatively affect our business and financial performance.

The outbreak of COVID-19 affected, and may continue to affect, the supply of our products, our business operations and financial condition.

Since the end of December 2019, the outbreak of COVID-19 has materially and adversely affected the global economy. During the COVID-19 outbreak, various governments have implemented strict measures to control the outbreak, including travel restrictions and workplace, business and school temporary shutdowns. Due to reduced mobility of consumers, retail points of sale were closed, coupled with the nature of our products being non-essential items, revenue from our natural, healthy and functional beverage segment and other product segment experienced a temporary decrease in 2020 compared with those of 2019.

During the COVID-19 outbreak, the supply of raw materials and finished products and our business operations were affected. The delivery of finished products we procure from brand partners in Europe was delayed from January to March 2020. Although our inventory of raw materials and finished products was adequate, we adapted in time and made supplementary orders to ensure adequate inventory, we could face supply disruptions in the event that delivery is delayed again. Furthermore, the COVID-19 outbreak also affected our third-party logistics suppliers from January to April 2020. By the end of April 2020, to our knowledge, all of our third-party logistics and warehousing service providers resumed work. If the COVID-19 outbreak continues, it may affect our business, results of operations and financial condition.

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We rely on wholesalers and retailers over whom we have limited control which are Independent Third Parties to sell our products. Failure to maintain relationships with our existing wholesalers and retailers, attract new wholesalers and retailers or effectively manage our sales and distribution network may materially and adversely affect our business, financial condition and results of operations.

We rely on our wholesalers and retailers to sell our products to our customers. Our wholesaler system in China comprises regional wholesalers and dealers. Our regional wholesalers sell our products to their respective dealers and retailers through their sales network. Our dealers are engaged to service our on-trade and off-trade customers and enhance our market penetration. According to the F&S Report, it is a common industry practice for the beverage industry to have a distributorship model. As of December 31, 2020, we had 80 regional wholesalers and 139 dealers. In addition, we have an extensive network of retailers, consisting of on-trade and off-trade customers (including some national and regional major supermarket chains and convenience store chains), for a wide market coverage and consumer reach. As of December 31, 2020, we had 5,636 offline retailers in Hong Kong and 13 offline key account retailers in China.

During the Track Record Period, we generally entered into distribution agreements or sales agreements with our wholesalers and retailers. We cannot assure you that the distribution agreements or sales agreements we have with the existing wholesalers and retailers will be renewed on the same or similar terms, or at all, upon or before the expiration, nor can we assure you that existing wholesalers and retailers will not terminate these distribution agreements or sales agreements before they expire. There is no assurance that we will be able to maintain the existing business relationships with our wholesalers and retailers or that the existing wholesalers and retailers will continue to place orders with us at historical levels, or at all. If any of our major wholesalers or retailers substantially reduces its volume of purchases from us or ceases to do business with us altogether, our sales may decrease substantially and our financial condition and results of operation may be materially and adversely affected.

In addition, we provide price guidance on our products to our wholesalers and retailers, which is intended to prevent malignant price competition. Failure by our wholesalers and retailers to comply with such price guidance may have an adverse impact on our business operation. Furthermore, although our PRC Legal Advisor is of the opinion that the likelihood of such price guidance measures to be regarded as a monopolistic activity according to the Article 14 of the Anti-monopoly Law of the PRC《 ( 中華人民共和國反壟斷法》) is remote, there can be no assurance that regulators will not take a different view, or that any future change or promulgation of laws and regulations will not render our pricing guidance non- compliant. Moreover, compliance with existing and future anti-monopoly and anti-unfair competition laws and regulations could subject us to costs or liabilities, including monetary damages and fines, which may impact our business operations and our overall financial performance.

We may be unable to adequately manage our future growth and expansion.

To respond to increased market needs, we intend to further grow our business in the PRC market, including establishing a new production facility in China for In-house Brand spirits products. Our expansion plan is affected by various factors, including obtaining financing, receiving government approvals, licenses and permits, which may be out of our control. Moreover, the construction work of our production facility may be affected by a number of factors, including the performance and efficiency

– 39 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. RISK FACTORS of the construction contractors, changes in relevant regulations and government policies, delays in obtaining the necessary licenses, permits or approvals from relevant authorities in the PRC, construction accidents, adverse weather conditions and other unforeseen problems and circumstances, which may adversely affect the schedule, costs and the success of the construction work. Any delays in the construction schedule, deviation from our planned specifications, failure to control the costs within budget as a result of the above factors may adversely affect the timing that our expansion plan, and our results of operations and financial position may also be adversely affected. We cannot assure you that we will not experience any significant delays in the construction work of our new production facility nor assure you that our new production facility will be built according to our proposed timeline. Any delays in the completion of our new production utilities may adversely affect our business, financial condition, results of operations and growth prospects.

Our ability to achieve business growth is also subject to a wide range of market, operational and financial risks, including those arising from the competition with existing market players, changing consumer spending patterns, as well as maintaining our high-quality standards and our existing relationships with wholesalers. Under the influence of these risks, our investments and expansion efforts may be unable to generate the expected business growth, which may materially and adversely affect our financial condition and results of operations.

The distribution rights granted to us by a small number of Third-party Brand Partners are non- exclusive in nature and we may face competition from additional distributors which may be appointed by such brand partners, in which case our business, financial condition and results of operations may be adversely affected.

We strive to be the exclusive business and sales partner for all of the Third-Party Brands that we cooperate with. However, a small number of the agreements entered into between our beer brand partners and us and the authorization letters issued by the beer brand partners may not contain specific undertaking from such brand partners to not supply their products to or appoint any other sales partners in the relevant territory(ies), or otherwise specify that the rights granted to us to offer and sell their beer products are exclusive. To our knowledge, we act as the sole distributor for these international beer brand partners even though the agreements do not explicitly provide the exclusive distribution rights. However, such beer brand partners are not restricted legally from appointing any additional sales partners for the offer and sales of their products in Hong Kong and China. In such circumstances, we will have to compete with the additional companies and, to some extent, share increased product sales contributed by our marketing efforts. If there is no corresponding increase in market demand for the beer products we offer, it is likely that the retailers will reduce the number of orders they place with us with increased choices of product suppliers. Our revenue may fall as a result, and our business, financial condition and results of operations may be adversely affected.

The existence of products distributed and sold by traders without proper authorization from the relevant brand owners or us in the market may damage the general reputation of our Third-party Brand Products and may have a material adverse effect on our business, financial condition, results of operations and prospects.

Some of our Third-party Brand Products may also be available in the market from traders who have procured or imported such products without proper authorization from the brand owners or us. Such goods may be sold at lower prices than the products we procured from the brand owners or the recommended retail prices we set for our products, due to the lower operating and promotion costs of the traders, and we may lose out in price competition.

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In addition, such goods may not be comparable with the products procured from the brand owners or us in terms of quality. Any quality issue in relation to such goods may give rise to negative publicity in respect of our products and consequently damage the reputation of all sellers in the market in general. As we cannot exclude other market players from selling such goods or control their selling prices, our business, financial condition, results of operations and prospects may be materially and adversely affected.

Sales of some of our products are subject to seasonality and fluctuations.

Given the wide coverage of our product portfolio, we are generally not subject to seasonal variations. However, we typically experience higher sales revenue of international spirits and wines in the holiday seasons in December, January and February, and higher sales revenue of natural, healthy and functional beverages in the second and third quarters of the year when the weather is warmer in Hong Kong and China. Our sales can also fluctuate during the course of a financial year for other reasons, such as the timing of new product launches and advertising and promotional activities. If there is any adverse change in market conditions or if our operations are disrupted or affected by unpredictable events taking place during the peak season, our business, financial condition and results of operations may be adversely affected. Consequently, sales and operating results for any particular period will not necessarily be indicative of our performance for the full year or future periods.

Large retailers with significant bargaining power account for a portion of our sales.

We rely on a number of large retailers, primarily hypermarkets, supermarkets and convenience store chains, to distribute our beverage products. These large retailers have significant bargaining power with respect to their purchases from us. We generally grant a credit period of 60 to 90 days to these large retailers, and are therefore subject to credit risks of our large retailers. In limited cases, we may accept product returns from these retailers. Large retailers may be in a position to resist our price increases or demand lower prices. If we do not provide appropriate marketing, pricing and sales incentives to these retailers, our product availability and sales could be adversely affected.

Our wholesalers and retailers may accumulate excessive or obsolescent inventory, and any excessive build-up of inventory could affect the volume of future orders from our wholesalers and retailers.

We sell our products to our wholesalers and retailers, who maintain their own inventories of these products. Our wholesalers and retailers in turn on-sell our products to consumers through various retail outlets, their sales network and online sales channels.

Our wholesalers and retailers may be unable to sell adequate amounts of their inventories of our products in a given period to consumers, which may result in a build-up of inventory at our wholesalers and retailers. They may face higher risks of excessive or obsolescent inventories of our new products as the market reception to the products is uncertain. In such event, our wholesalers and retailers may reduce future orders until their inventory levels realign with demand from their consumers, dealers or customers. In limited cases, we may also consider product return requests of expired or slow-moving products on a case-by-case basis. See ‘‘Business — Sales and Distribution Network’’ for details. During the Track Record Period, there were limited cases of product returns, which did not materially and adversely affect our business or financial performance. See ‘‘Business — Sales and Distribution

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Network’’ for details. The reduction in future orders from our wholesalers and retailers could have a material adverse impact on our sales to them and, accordingly, our business, financial condition, results of operations and prospects.

In addition, we adopt a wholesalers system consisting of regional wholesalers and dealers in China. Our regional wholesalers and dealers maintain their own inventories of these products. Our regional wholesalers and dealers, and their wholesalers and retailers in turn on-sell our products to consumers through various retail outlets and their inventory network. We generally do not give credit terms to our regional wholesalers and dealers in China and require advanced payment before our delivery of products to our regional wholesalers and dealers. We monitor the inventory information of our regional wholesalers primarily by reviewing inventory reports and order records from our regional wholesalers to understand their general inventory levels. However, we may be unable to accurately track the inventory level of our regional wholesalers or accurately identify any excessive inventory built up at various levels of our sales and distribution network in China at any given time or for any given period. See ‘‘Business — Sales and Distribution Network — Management of Our Sales and Distribution Network.’’

Any food safety or quality-related issues or negative publicity and media reports related to products we offer or the general beverage industry could materially and adversely affect our business, reputation and our ability to sell our products.

We rely heavily on the strength of our brands and reputation to market and sell our products. We believe that our product brands are recognized among consumers for quality and reliability, and these recognitions have allowed us to establish ourselves as a renowned beverage company in Hong Kong and China. However, our brands and reputation may be harmed by product defects, consumer complaints, negative publicity or media reports, product liability claims, ineffective customer services or intellectual property infringement.

Our Third-party Brand Products may also be subject to counterfeiting or imitation. Such counterfeit spirit and wine products may be manufactured without proper licenses or be of inferior quality. This could cause food safety or quality-related issues if they are found to be defective, unfit for consumption or cause illness. These counterfeit spirit and wine products could negatively impact our reputation and the brand names of the Third-party Brand Products we sell and lead to a loss of consumer confidence, which could harm our business and results of operations.

Any negative claim against us, even if meritless or unsuccessful, may divert our management’s attention and other resources from day-to-day business operations, which may adversely affect our business, results of operations and financial condition. Negative media coverage regarding the quality, nutritional value, price-level or safety of our products, and the resulting negative publicity, may materially and adversely affect the level of consumer recognition of, and trust in, our products. In addition, adverse publicity about any regulatory or legal action against us may damage our reputation and brand image, undermine our consumers’ confidence in us and reduce long-term demand for our products, even if the regulatory or legal action is unfounded or immaterial to our operations.

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We may be unable to receive compensation from suppliers for contaminated products supplied, and indemnity provisions in our supply contracts may not be sufficient to cover our loss.

Our business is exposed to product safety or quality issues, such as food contamination or spoilage of products during storage or transportation, unauthorized product tampering and product labeling errors. We rely on our suppliers to ensure the quality of our products, from the raw materials supplied for our In-house Brand Products to the finished goods for our Third-party Brand Products. If any raw material we source and apply to our production is contaminated, the quality of our In-house Brand Products will be impaired, which in turn could materially and adversely affect our business, financial condition and results of operations.

Furthermore, if we become subject to food safety claims caused by contaminated or otherwise defective raw materials or products supplied by our suppliers, we may seek compensation from the relevant suppliers under the indemnity clauses of some of our supply contracts. However, indemnity provisions in our supply contracts may be insufficient to cover losses and/or consequential losses such as damaged reputation. If we are unable to assert a claim against a supplier or the amounts that we claim cannot be recovered from the supplier, to the extent that our insurance coverage is not sufficient to cover our loss, we may be required to bear such losses and liability on our own. In turn, such result could materially and adversely affect our business, financial condition and results of operations.

If we fail to effectively manage our inventories or estimate accurately the demand for our products, our liquidity may be adversely affected.

Our business involves storage and stocking of a range of beverage products with different shelf life. In light of the nature of our products, our warehouse management team actively monitors our product flow and inventory level on our enterprise resource planning (‘‘ERP’’) system to minimize incidences of overstocking and expiration of our inventory. In 2018, 2019 and 2020, we made provision of inventories amounting to HK$0.2 million, HK$0.1 million and HK$0.4 million, respectively, as a result of our disposal of damaged, unsold or expired products and stock loss. If we cannot manage our inventory efficiently in the future, our liquidity and cash flow may be adversely affected. Furthermore, if we fail to procure appropriate products to suit consumer preferences in the future, the volume of slow- moving inventories or expired products may increase and we may need to sell off slow-moving inventories at a lower price or dispose of expired products, and in such event, our financial position and results of operations may be materially and adversely affected.

Our success and business operations are largely dependent on key management personnel to maintain our business relationships with existing suppliers and customers, secure new business and implement our business strategy.

Our success depends on the continuous contributions of our executive Directors and senior management. In particular, we rely on the expertise and experience of Mr. Kenneth Fong, our chairman, chief executive officer and executive Director, Ms. Lucia Fong, our vice chairlady, chief financial officer and executive Director and Mr. Vincent Fong, our vice chairman, chief executive officer (China) and executive Director, for formulating our strategic planning and overall business development. For details of our key personnel, see ‘‘Directors and Senior Management.’’

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If one or more key personnel are unable or unwilling to continue in their present positions within our Group, we may be unable to replace them easily or at all, which may cause a significant disruption to our business operations, strategic plan and strategic implementation, and materially and adversely affect our financial condition and results of operations. We may have to incur additional and potentially significant expenses to recruit new personnel and trainexistingemployees,whichmayinturnincrease our costs of operations and adversely affect our profitability.

We may be unable to adequately protect industrial know-how of the In-house Brand Products we offer, as a result, our ability to compete couldbeharmedandwemaybesubjecttoindemnity claims if such industrial know-how is disclosed to third parties.

We possess a significant number of industrial know-how or trade secrets in relation to product formulas, production processes and technologies, which we believe are material to our operations and which are not covered by patents. We utilize a combination of contractual responsibilities and confidentiality restrictions in our agreements with our employees and third parties, including our production partners, to prevent the leakage of our trade secrets, and legal and statutory protections to safeguard our proprietary rights, including the ingredients and product formulas. Any breach of confidentiality by our employees or production partners having access to our product formulas and other trade secrets could result in third parties, including our competitors, gaining access to such formulas and trade secrets. If our competitors are able to substantially copy our product formulas and/or our product packaging and manage to provide comparable products at competitive prices, our market share may decrease.

We cannot assure you that our protective measures will be sufficient to safeguard our trade secrets, industrial know-how and intellectual property rights against any unauthorized use, misappropriation or disclosure. We also cannot assure you that we will succeed in enforcing confidentiality provisions or undertaking enforcement proceedings in the event that there is any unauthorized use of our intellectual property. Any litigation to protect our intellectual property would be time-consuming and costly, and may divert the attention of our senior management and key personnel from our business operations and materially and adversely affect our business, financial condition and results of operations.

We and our brand partners may be exposed to intellectual property infringement claims by third parties and counterfeit products, which could disrupt our business, incur substantial legal costs and damage our reputation.

Our In-house Brand Products and Third-party Brand Products may be exposed to the risk of product infringement. We sell our In-house Brand Products under our In-house Brands, primarily Tao Ti and Meko, which we acquired from Telford Enterprise. For information about our intellectual property rights, see ‘‘Appendix IV — Statutory and General Information — B. Further Information About Our Business — 2. Intellectual Property Rights.’’ We also sell Third-party Brand Products whose intellectual property protection is handled by the respective brand owners. We cannot assure you that there will be no counterfeit or forgery of our In-house Brand Products or Third-party Brand Products, trademarks or brands in the market. Counterfeiters may illegally manufacture and market packaged drinking products and beverage products under our In-house Brands and Third-party Brands. Such counterfeit or forged products are usually difficult to detect or ban in a timely manner. The occurrence of counterfeiters may

– 44 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. RISK FACTORS have a negative impact on our reputation and brands. Our reputation and brands are crucial to our profitability and competitiveness, any damage to our reputation or brands resulting from product infringement may adversely affect our profitability and competitiveness.

We also rely heavily on a combination of trademarks, copyrights, domain name registrations and confidential agreements to protect intellectual property rights that are of significant value to us. As of the Latest Practicable Date, we had 61 Tao Ti trademarks registered or being applied for registration in Hong Kong, the PRC and other jurisdictions and 25 Meko trademarks registered in Hong Kong, the PRC and other jurisdictions, which are material to our business. Our In-house Brand Products are marketed under our trademarks and brand names, which are critical to our continued success and growth. We cannot assure you that we will be able to detect the presence of counterfeit products in the market in a timely manner. Occurrence of counterfeiting or imitations could impact our reputation and brand, which may lead to a loss of consumer confidence, reduced sales or higher costs for detection and prosecution. There can be no guarantee that any of our intellectual property rights will not be challenged, misappropriated or circumvented by third parties.

Any force majeure event affecting our production and storage facilities may severely disrupt our business and cause us losses and damages.

We lease two warehousing premises located in Yuen Long, Hong Kong. In addition, we have access to six warehouses in China. These warehouses are operated either by us or Independent Third Party service providers engaged by us. In the event there is any material unexpected disruption at or in the vicinity of our warehousing premises as a result of the occurrence of any force majeure events, such as fire, power and water outage and other discontinuation of utilities beyond our control, it may directly cause substantial damage or destruction to our warehousing premises and our stocks. We cannot guarantee that any precautionary measures implemented at our warehousing premises, such as fire safety facilities and CCTV surveillance systems, will be effective in minimizing such risks of business disruptions and potential loss and damages. There is no assurance that we will be able to take adequate steps to mitigate the potential impact of such disruptions effectively. The occurrence of any of such force majeure incidents in the future may cause partial or total loss of our stocks, and result in material damage or destruction to our warehousing facilities and equipment. Our operations may be severely impaired or even put to a halt, which may lead to material adverse impact on our results of operations.

Any delivery delay, improper handling of products or increase in transportation costs of our third- party logistic service providers could materially and adversely affect our business and results of operations.

We primarily rely on our own logistic fleets for storage, transportation and delivery of our products to customers in Hong Kong, and primarily engage third-party logistics service providers to store and transport products to our customers and wholesalers in China. In 2018, 2019 and 2020, our warehousing and logistics service expenses were HK$23.3 million, HK$31.5 million and HK$36.5 million, respectively. The vast majority of our products are delivered by trucks. The services provided by our logistics service providers may be suspended or canceled due to unforeseen events, which could cause interruption to the sales or delivery of our products. In addition, delivery delays may occur for various reasons beyond our control, including improper handling by our logistics service providers, labor disputes or strikes, acts of war or terrorism, outbreaks of epidemics, earthquakes and other natural disasters.

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Any improper handling of our products by our logistics fleets or the logistics service providers could also result in product contamination or damage, which may lead to product recalls, product liabilities, increased costs and damage to our reputation, which may in turn adversely affect our business, financial condition and results of operations.

Our warehousing and logistics service expenses are subject to factors beyond our control, such as fluctuations in gasoline price, increases in road tolls and bridge tolls, and changes in transportation regulations. Any increase in the service costs of our logistics service providers may lead to an increase to our logistic expenses, which may in turn negatively affect our results of operations.

Fluctuations in foreign currency exchange rates may materially and adversely affect our business, financial condition and results of operations.

We have significant operations in China and Hong Kong. Particularly, we procure Third-party Brand Products from overseas, including, but not limited to, the United States, Europe, Japan, South East Asia and Chile, for our sales primarily to retailers in Hong Kong, and to our regional wholesalers and dealers in China. Our foreign currency transactions are mainly denominated in USD and our sales in China and Hong Kong are denominated in RMB and HKD. As a result, fluctuations in the value of RMB and HKD against USD could result in currency exchange gains or losses. As an example, our sales in China are denominated in RMB whilst costs of sales incurred in China are primarily denominated in USD. Weakening of RMB relative to USD will adversely affect the USD value of our sales and earnings denominated in RMB.

In addition, since we generally enter into agreements with our wholesalers and retailers on an annual basis with a fixed sales prices, we will bear the fluctuations in the value of RMB and HKD against USD when procuring Third-party Brand Products. Margins on sales of our Third-party Brand Products in China and Hong Kong procured with foreign currencies could be materially and adversely affected by foreign currency exchange rate fluctuations, since we do not amend fixed sales price in ongoing agreements. Therefore, in the event that we cannot fully offset the strengthening of foreign currencies, or at all, our financial condition and results of operations could be materially and adversely affected.

In addition, our combined financial statements are affected by currency exchange rate fluctuations. During the Track Record Period, our foreign currency transactions were mainly denominated in USD and RMB, while our financial information is presented in HKD. In 2018, 2019 and 2020, we recorded foreign exchange gain of approximately HK$4.9 million, foreign exchange loss of HK$3.6 million and foreign exchange gain of HK$5.4 million, respectively. Fluctuations in foreign exchange may be caused by various factors and may be unpredictable, it could be more difficult to detect underlying trends in our business and results of operations. We cannot guarantee that we will not suffer any loss on foreign exchange in the future. Further, we do not have any forward contracts or other derivative instruments to manage our foreign exchange risks. In the event that we are unable to manage our foreign currency risks effectively or at all, our business, financial condition and results of operations may be materially and adversely affected.

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We require various licenses, approvals and permits to operate our business, and the loss of, or failure to obtain or renew, any or all of these licenses or approvals could materially and adversely affect our operations.

Our operations requires various licenses, approvals and permits. For example, our production facility in Hong Kong requires relevant licenses from the relevant government authorities in Hong Kong, to carry on the business of food production, including food factory license and registration of food importer/distributor and certificates or registrations for certain equipment and appliances; and an import and export license is required to import or export alcohol to and from Hong Kong. Meanwhile, we are required to obtain the license and/or permit to carry on the business of wholesale of alcohol in PRC, and to establish a stringent supervision and management system. See ‘‘Regulatory Overview’’ and ‘‘Business — Licenses, Permits and Approvals’’ for more details. Such licenses, certificates and registrations are generally valid for one to three years and subject to renewal or periodic inspection. The respective authorities will conduct scheduled or random inspections of our premises to ensure that we are in compliance with the required regulations. If there is a breach of any restriction or condition subject to which the license was granted, the license or registration may be temporarily or permanently suspended or revoked, or if compulsory inspections are not arranged in a timely manner due to reasons such as COVID-19 and result in malfunctioning equipment and appliances, our operations could be disrupted and our business could be materially and adversely affected. Any significant accident caused by the use of such equipment and appliances which do not comply with the required inspection regulations could interrupt our operations and result in legal and regulatory liabilities.

The requirements set by the government authorities are also subject to change and new requirements may be imposed from time to time. We cannot assure you that the requirements set by the government authorities will always be met by us. As such, should our licenses be suspended or revoked, we will not be able to continue our production, which will result in a drop in production levels and prevent us from meeting the needs of our customers. In turn, such development will have a material and adverse impact on our turnover and profitability, as well as our business, financial condition and results of operations.

The beverage distribution and retail business may be subject to increasingly stringent licensing requirements, environment protection regulations and hygiene standards, which may affect the business of our on-trade customers, and subsequently our business.

During the Track Record Period, approximately 18.3%, 13.0% and 8.2% of our sales were contributed by our on-trade customers. These on-trade customers include restaurants, clubs, bars and hotels, which are subject to various laws and regulations in Hong Kong and the PRC. We cannot assure you that the laws and regulations that our on-trade customers are subject to, in particular, the requirements for obtaining light refreshment restaurant licenses, general restaurant licenses, water pollution control licenses, liquor licenses or other permits for restaurant premises and installations in Hong Kong and the PRC will not become more stringent. Operations of food and beverage establishments, including restaurants, are required to comply with environmental protection regulations. The requirements for obtaining the relevant hygiene permits, the approvals on fire protection and the permits for discharging polluting materials in Hong Kong and the PRC may also become more stringent. In addition, due to the COVID-19 outbreak, some of our on-trade customers were required to close by the governments in Hong Kong and the PRC to prevent the transmission of COVID-19, and therefore

– 47 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. RISK FACTORS sales contributed by our on-trade customers experienced a temporary decrease in 2020 compared with that of 2019. We cannot assure you that such measures or stricter measures will not be imposed in the future.

If our on-trade customers fail to comply with the existing laws and regulations, or future legislative changes, they may be subject to suspension of any part of their businesses, which could in turn adversely affect our financial condition and results of operations, as such on-trade customers may stop procuring beverage products from us. In addition, there is no assurance that our on-trade customers can comply with more stringent licensing requirements. Should this happen, they will have to cease operation, and our profitability could be adversely affected.

We may be exposed to credit risk due to customer defaults.

We typically do not grant any credit term to our wholesalers. For retailers, we may grant a credit term of 30 to 90 days. Our liquidity depends on our retailers making prompt payments to us. See ‘‘Business — Sales and Distribution Network’’ for more details. In 2018, 2019 and 2020, our trade receivables amounted to approximately HK$227.8 million, HK$285.3 million and HK$201.5 million, respectively. Our average trade receivables turnover days for 2018, 2019 and 2020 were 61 days, 51 days and 48 days, respectively. For further details, see ‘‘Financial information — Description of Certain Items of Statement of Financial Position — Trade and Other Receivables.’’

If our retailers delay or default in their payments to us, we may have to make impairment provisions and write-off the relevant receivables and hence our liquidity may be adversely affected. This may in turn materially and adversely affect our business, financial condition and results of operations.

Certain land use restriction with respect to the property occupied by us may adversely affect our ability to use such property and, in turn, our business operations.

During the period from September 16, 2008 up to the Latest Practicable Date, we have occupied a property in Hong Kong with a GFA of approximately 1,519 square meters (‘‘Office Headquarters’’)as our office headquarters. Our Group and Richmen (‘‘the landlord’’) were not aware the land use was restricted to industrial or godown purposes or both under the government lease; and factories or godowns or both under the deed of mutual covenant (the ‘‘Non-compliance Incident’’). The Non- compliance Incident was only identified and made known to our Directors in the course of the due diligence exercise conducted by the professional parties during the course of preparation for the [REDACTED]. See ‘‘Business — Legal Proceedings and Compliance — Compliance’’ for details.

As advised by Mr. Patrick K.C. CHONG, Barrister-at-Law in Hong Kong, in the event that the government of Hong Kong decides to take enforcement action, it will be taken against the landlord instead of Telford International. However, there may be a chance that Telford International will be ordered by the landlord to stop using our Office Headquarters for office purposes. The government of Hong Kong may also enforce the government lease including re-entering our Office Headquarters. By a letter dated June 21, 2021, Cushman & Wakefield Limited has applied to the Lands Department on behalf of the landlord for a temporary waiver (the ‘‘Waiver’’) of the land use restriction of our Office Headquarters from industrial to office use for headquarters or back-office operations. As of the Latest Practicable Date, the Waiver had not been granted by the Lands Department. If we cannot obtain the

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We may be subject to higher environmental-related compliance costs if the Hong Kong and the PRC environmental protection laws become more onerous, and non-compliance with relevant environmental protection laws could lead to imposition of fines and penalties and harm our business and results of operations.

Our business is subject to environmental protection laws and regulations of Hong Kong. See ‘‘Regulatory Overview.’’ These laws and regulations require us to adopt effective measures to, among other things, properly dispose of waste materials. Fines may be levied against us if we cause pollution in excess of permitted levels or otherwise fail to comply with such laws or regulations.

Moreover, many countries have introduced recycling fees on the use of certain containers, particularly those made from plastic, glass or tin. As of the Latest Practicable Date, there were no specific statutes or regulations requiring payment of these types of fees in Hong Kong nor the PRC. However, the government of Hong Kong has launched a public consultation on the introduction of a producer responsibility scheme on plastic beverage containers, but such scheme had not been officially implemented as of the Latest Practicable Date. See ‘‘Regulatory Overview — Hong Kong — Law and Regulations Relating to Environmental Protection — Recent Development on the Producer Responsibility Scheme on Plastic Beverage Containers’’ for more details. If these types of fees were to be introduced or implemented in Hong Kong or the PRC, they could have a material and adverse effect on our business, financial condition and results of operations to the extent that we are unable to fully pass the relevant costs on to our customers, or that these types of regulations may deter consumers from purchasing related products.

We may incur additional costs due to changes in Hong Kong and PRC food safety laws.

During the Track Record Period, we produced the postmix for certain world-renown soft drink brands. In addition, we offer beverages and packaged food in Hong Kong and China. As a result, we are subject to extensive food safety laws and regulations of Hong Kong and China to which we offer our products. For instance, relevant Hong Kong food safety laws and regulations set out standards with respect to food and food additives, packaging and containers, as well as hygiene and safety requirements for food production and sites, facilities and equipment used for the transportation and sale of food. In addition, according to the Food Safety Law《 ( 中華人民共和國食品安全法》), which was promulgated by the State Council on February 28, 2009 and was lately amended on April 29, 2021 and the Implementing Rules on the Food Safety Law of the PRC《 ( 中華人民共和國食品安全法實施條例》), which was promulgated by the State Council on July 20, 2009 and was lately amended on October 11, 2019, we are required to follow more stringent quality control and food safety standards. In addition, we are required to maintain proper production records of our products. Any failure to comply with the Food Safety Law, its implementation regulations or other applicable food safety and hygiene laws and regulations in the PRC may result in fines, suspension of operations, loss of food production licenses and, in more extreme cases, criminal proceedings may be brought against us and our management. These events may have a material adverse impact on our production, business, results of operations and financial condition. See ‘‘Regulatory Overview — The PRC — Laws and Regulations Related to Food Safety and Licensing Requirement for Food/Liquor Operation’’ and ‘‘Regulatory Overview — Hong Kong — Laws and Regulations Relating to Food Safety’’ for more details.

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We cannot assure you that the Hong Kong and the PRC governments to which we offer our products will not impose additional or more stringent laws or regulations on food safety, providing for more stringent and more comprehensive monitoring and regulation of food manufacturers and distributors in areas including food production and distribution, which may lead to an increase in our costs of complying with such laws or regulations. We may be unable to pass these additional costs on to our customers, and we cannot assure you that we are capable of fully complying with future laws and regulations, which may result in an adverse effect on our business, financial condition and results of operations.

The relationships between China and other countries may materially and adversely affect our business operations.

We imported finished products from Third-party Brand partners in various countries during the Track Record Period. Changes to trade policies, treaties and tariffs, or the perception that these changes could occur, could adversely affect the financial and economic conditions in the markets in which we operate. For example, in relation to the trade tension between China and Australia, among other measures taken by both government, Australian wine sales to China have effectively ground to a halt, first with an unofficial ban that held up hundreds of shipping containers at ports, and subsequently with the introduction of tariffs.

In response to the trade tension between the two countries, we adapted in time and have since reduced importation of wines from Australia and procured more international spirits from other countries. We cannot accurately predict whether the trade tensions will be further intensified in the future. Furthermore, we cannot assure you that we will be able to respond quickly to any economic, market regulatory changes in the international market, and any failure to do so may cause an adverse effect on our business, financial condition and results of operations.

In addition, we cannot assure you that the Hong Kong and the PRC governments will not impose tariffs on international spirits and wines imports which could affect our business performance. Such introduction of tariffs could result in a corresponding increase in the price of international spirits and wines and could eventually lead to a decrease in customers’ demand for our Third-party Brand Products, which could have an adverse effect on our business and financial condition.

Our insurance coverage may be insufficient to cover all of our potential losses.

We believe that we have purchased and maintained various insurances in accordance with relevant laws and regulations and standard industry practice. Consistent with industry practice, we do not carry any business interruption or litigation insurance. We cannot assure you that our insurances will provide adequate coverage for all the risks in connection with our business operations. If we were to incur substantial losses and liabilities that are not covered by our insurance policies, we may be required to bear our losses to the extent that our insurance coverage is insufficient. As a result, we could suffer significant costs and diversion of our resources, which could have a material adverse effect on our financial condition and results of operations.

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Our information technology and software systems may encounter malfunction, unexpected system failure, interruption, insufficiency or security breaches which may disrupt our operations.

Our business relies on the proper operation of our information technology systems, in particular the enterprise resource planning (‘‘ERP’’) system to effectively manage, among others, our inventory, logistic data, sales activities, production and operation data, client information analysis and other business processes. We established our customer relationship management (‘‘CRM’’) system, in order to effectively manage customer relationships, including but not limited to, tracking the locations of our products from our regional wholesalers to their selected dealers, tracking products sales data and promotion activities of our wholesalers.

Our growing use and reliance on information technology will place an increasing pressure on such systems. We may encounter problems when upgrading our systems and services and we may rely on third-party service providers for periodic maintenance and/or system updates. Any malfunction to a particular part of our information technology systems may result in a disruption to our business which could materially and adversely affect our business and results of operations. In addition, our information technology systems may be vulnerable to damage or interruption from circumstances beyond our control, including power outages, systems or network failures, computer viruses, or security breaches. Any significant failure of our information technology systems, or loss or leakage of confidential information, could result in transaction errors, process inefficiencies and loss of sales and customers, which could further harm our reputation and materially and adversely affect our business, financial condition and results of operations.

Wemaybeunabletodetectorpreventfraud,bribery, or other misconduct committed by our employees, customers or other third parties.

We may be exposed to fraud, bribery, or other misconduct committed by our employees, customers or third parties, which could subject us to financial losses and penalties from governmental authorities. Although our internal control procedures are designed to monitor our operations and ensure overall compliance, our internal control procedures may be unable to identify all non-compliances, suspicious transactions, fraud, corruption or bribery in a timely manner. If such misconduct occurs, we will suffer from negative publicity and reputational damages.

We could be involved in claims, disputes and legal proceedings in our ordinary course of business.

From time to time, we may be involved in claims, disputes and legal proceedings in our ordinary course of business. These may concern issues relating to, among others, breach of contract, employment or labor disputes, infringement of intellectual property rights and environmental matters. In particular, the manufacture and sales of our In-house Brand Products subject us to potential product liability claims if such products are proven to have failed to meet relevant health and safety or other laws and regulations, or cause or are alleged to have caused illness or health issues.

If we are unsuccessful in any product liability claims, we may be subject to substantial damages to compensate the claimants. Any claims, disputes or legal proceedings initiated by us or brought against us, with or without merit, may result in substantial costs and diversion of resources and materially harm our reputation.

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Claims, disputes or legal proceedings against us may be due to defective supplies sold to us by our suppliers, who may be unable to indemnify us in a timely manner, or at all, for any costs that we incur as a result of such claims, disputes and legal proceedings.

RISKS RELATING TO JURISDICTIONS IN WHICH WE OPERATE

Our business is primarily conducted in the Hong Kong and PRC market, and any possible general slowdown in the Hong Kong and PRC market or slowdown in the beverage and spirits and wines market may adversely affect our business, resultsofoperationsandfinancial performance.

We derive our revenue primarily from the sales of our products in Hong Kong and the PRC. In 2020, our sales in Hong Kong and the PRC accounted for 47.0% and 53.0%, of our total revenue, respectively. The success of our business depends on the condition and growth of the Hong Kong and PRC market, which in turn depends on macro-economic conditions and individual income levels in Hong Kong and the PRC. We cannot assure you that projected growth rates of the Hong Kong and PRC economy and the Hong Kong and PRC consumer market will be realized under the current economic situation. Any future slowdowns, declines or instability in the Hong Kong and Chinese economy or consumer spending could adversely affect our business, results of operations and financial condition. We believe that consumer spending habits could be adversely affected during a period of recession in the economy and that uncertainties regarding future economic prospects could also affect consumer spending habits, any of which may have an adverse effect on certain enterprises operating within the beverage and spirits and wines market, including us. The beverage and spirts and wines market could be affected by the changing operating conditions in Hong Kong and the PRC. In particular, the reduction in tariffs on foreign products after further opening of the PRC market and entry of more international brands may intensify the competition in Hong Kong and the PRC beverage and spirits and wines market. This could have an adverse impact on our business, financial condition and results of operations.

Any adverse change in the political, economic or social condition in Hong Kong and China may have a material adverse effect on us.

Our operations and performance depend significantly on the PRC and global economic, political, legal and social conditions. Uncertainty about the PRC and global economic conditions poses a risk as consumers and businesses may postpone spending in response to rising unemployment rate, declines in income or asset values, credit constraint, financial market volatility, government austerity programs, negative financial news and/or other factors. These regional and worldwide economic conditions could have a material adverse effect on the demand for our products. A material part of our operations is based in the PRC and the economic structure, government policy, legal system, level of development, growth rate and control of foreign exchange of which may differ from time to time. There can be no assurance that in all cases, we will be able to capitalize on the economic reform measures implemented by the PRC government.

Any failure to comply with the PRC Social Insurance Law and the Regulation on the Administration of Housing Provident Funds may subject us to fines and other legal or administrative sanctions.

As of December 31, 2020, we employed 290 employees based in the PRC. According to the Social Insurance Law of the PRC《 ( 中國社會保險法》) and the Regulations on Management of Housing Provident Fund of the PRC《 ( 住房公積金管理條例》), we are required to make social insurance premium

– 52 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. RISK FACTORS contributions and housing provident funds for our employees. During the Track Record Period and as of the Latest Practicable Date, some of our employees’ social insurance premium contributions and housing provident funds were paid for by third-party human resources agencies. This payment arrangement is in breach of the relevant laws and regulations in the PRC and therefore, we may be required to pay the sums we owe and subject to a fine. See ‘‘Business — Legal Proceedings and Compliance — Compliance’’ for more details.

We cannot assure you that we will not be subject to any order to rectify this non-compliance incident in the future, nor can we assure you that there are no, or will not be any, relevant employee complaints against us. Any such order may adversely affect our business, financial condition, results of operations and prospects.

The legal system in China embodies uncertainties which could limit the legal protections available to us.

Our cross-border business in the PRC is governed by the legal system of the PRC. The legal system in the PRC is a civil law system based on written statutes. Unlike common law systems, it is a system in which decided legal cases have little precedential value. The legal system in the PRC evolves rapidly, and the interpretations of many laws, regulations and rules may contain inconsistencies. These uncertainties could limit the legal protections available to us. In addition, we cannot predict the effect of future developments in the PRC legal system, particularly with regard to beverage industries, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local regulations by national laws. Such unpredictability towards our contractual, property (including intellectual property) and procedural rights could adversely affect our business and impede our ability to continue our operations. Furthermore, any litigation in the PRC may be protracted and result in substantial costs and diversion of resources and management attention.

WerelyondividendsandotherdistributionsonequitypaidbyoursubsidiariesinChinatofund any cash and financing requirements we may have. Any limitation on the ability of our Chinese subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business or financial condition.

We are a holding company, and we rely on dividends and other distributions on equity that may be paid by our subsidiaries in China, for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to the holders of our ordinary shares and service any debt we may incur. If our Chinese subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us.

In particular, under Chinese laws and regulations, Chinese enterprises may pay dividends only out of their retained earnings as determined in accordance with Chinese accounting standards and regulations. In addition, a Chinese enterprise is required to set aside at least 10% of its after-tax profits each year, after making up previous years’ accumulated losses, if any, to fund certain statutory reserve funds, until the aggregate amount of such a fund reaches 50% of its registered capital. Any limitation on the ability of our Chinese subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

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RISKS RELATING TO THE [REDACTED]

There has been no prior public market for our Shares, and their liquidity and market price may be volatile.

Prior to the [REDACTED], there was no public market for our Shares. We cannot assure you that a public market for our Shares with adequate liquidity and trading volume will develop and be sustained following the completion of [REDACTED]. In addition, the [REDACTED] of our Shares is expected to be fixed by agreement between the [REDACTED] (on behalf of the [REDACTED]) and us, and may not be an indication of the market price of our Shares following the completion of the [REDACTED]. If an active public market for our Shares does not develop following the completion of [REDACTED], the market price and liquidity of our Shares could be materially and adversely affected.

The price and trading volume of our Shares may be highly volatile. Several factors, some of which are beyond our control, such as variations in our results of operations, changes in our pricing policy, the emergence of new technologies, strategic alliances or acquisitions, the addition or departure of key personnel, changes in profit forecast or recommendations by financial analysts, changes in ratings by credit rating agencies, litigation or the removal of the restrictions on share transactions, could cause large and sudden changes to the volume and price at which our Shares will trade.

In addition, the Stock Exchange and other securities markets have, from time to time, experienced significant price and volume volatility that is not related to the operating performance of any particular company.

Holders of our Shares are subject to the risk that the price of our Shares could fall during the period before trading of our Shares begins.

The [REDACTED] of our Shares is expected to be determined on the [REDACTED]. However, our Shares will not commence trading on the Stock Exchange until they are delivered, which is expected to be several business days after the pricing date. As a result, investors may be unable to sell or deal in our Shares during that period. The price and trading volume of the Shares may be highly volatile. Factors such as variations in our revenue, net profit and cash flows and announcements of new investments, strategic alliances and acquisitions, fluctuations in market prices for our products or fluctuations in market prices for other companies in our industry could cause the market price of our Shares to change substantially. Any such developments may result in significant and sudden changes in the volume and price at which our Shares will trade. We cannot assure you that these developments will not occur in the future. Accordingly, holders of our Shares are subject to the risk that the price of our Shares could fall before trading begins as a result of adverse market conditions or other adverse developments, which could occur between the time of sale and the time trading begins.

The interests of our Controlling Shareholders may conflict with the interests of our other Shareholders.

On the [REDACTED], our Controlling Shareholders will indirectly control [REDACTED]% of our Shares (assuming the [REDACTED] is not exercised at all). For further information, see ‘‘Relationship with our Controlling Shareholders — Our Controlling Shareholders.’’

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Our Controlling Shareholders will be able to elect the majority of the members of our Board of Directors and will generally be able to determine the outcome of most other actions requiring Shareholder approval, including dividend distributions, issuances of new Shares and amendments to constitutional documents. The interests of our Controlling Shareholders may differ from those of other Shareholders.

We may need additional capital, and the sale or issue of additional Shares or other equity securities could result in additional dilution to our Shareholders.

Notwithstanding our current cash and cash equivalents and the net [REDACTED] from the [REDACTED], we may require additional cash resources to finance our continued growth or other future developments. We cannot assure you that financing will be available in the amounts or on terms acceptable to us, if at all. If we fail to raise additional funds, we may need to sell additional equity securities, which could result in additional dilution to our Shareholders.

Should the [REDACTED] of our Shares be higher than our consolidated net tangible book value per Share, purchasers of our Shares in the [REDACTED] may experience immediate dilution upon such purchases.

The [REDACTED] of our Shares may be higher than the combined net tangible assets per Share immediately prior to the [REDACTED]. Consequently, purchasers of our Shares in the [REDACTED] may experience an immediate dilution. Our existing Shareholders will receive an increase in the pro forma adjusted combined net tangible asset value per Share of their Shares. In addition, holders of our Shares may experience further dilution of their interest if we issue additional Shares in the future to raise additional capital.

We cannot assure you whether and when we will declare and pay dividends in the future.

The declaration and payment of dividends during the Track Record Period should not be considered as a guarantee or indication that we will declare and pay dividends in such manner in the future, or will declare and pay any dividends in the future at all. The declaration, payment and amount of any future dividends are subject to the discretion of our Directors depending on, amongst other things, our operating and financial results, cashflow situation, business conditions and strategies, future operations and earnings, taxation consideration, capital requirement and expenditure plans, interests of our Shareholders, statutory and regulatory restrictions, any restrictions on payment of dividends, our Articles of Association, the Companies Act, the PRC Company Law《 ( 中華人民共和國公司法》)andany other applicable PRC laws and regulations, and any other factors that our Board of Directors may consider relevant. As a result, there can be no assurance whether, when and in what form we will pay dividends in the future. Subject to any of the above constraints, we may be unable to pay dividends in accordance with our dividend policy. See ‘‘Financial Information — Dividend and Dividend Policy.’’

Certain statistics contained in this document are derived from a third-party report and publicly available official sources and they may not be reliable.

Certain statistics contained in this document relating to China, Hong Kong and the industry in which we operate have been derived from various official government publications or other third-party reports. We have taken reasonable care in the reproduction or extraction of the official government publications or other third-party reports for the purpose of disclosure in this document; however, we

– 55 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. RISK FACTORS cannot assure you of the quality or reliability of such source materials. They have not been prepared or independently verified by us, the [REDACTED] or any of their respective affiliates or advisors (excluding Frost & Sullivan) and, therefore, we make no representation as to the accuracy of such statistics, which may not be consistent with other information compiled within or outside the PRC or Hong Kong. Due to possibly flawed or ineffective collection methods or discrepancies between published information and market practice, such statistics in this document may be inaccurate or may not be comparable to statistics produced with respect to other economies. Further, there is no assurance that they are stated or compiled on the same basis or with the same degree of accuracy as the case may be in other jurisdictions. In all cases, investors should give consideration as to how much weight or importance they should attach to or place on such facts.

Forward-looking statements contained in this document are subject to risks and uncertainties.

This document contains certain statements and information that are forward-looking and uses forward-looking terminology such as ‘‘believe,’’ ‘‘expect,’’ ‘‘estimate,’’ ‘‘predict,’’ ‘‘aim,’’ ‘‘intend,’’ ‘‘will,’’ ‘‘may,’’ ‘‘plan,’’ ‘‘consider,’’ ‘‘anticipate,’’ ‘‘seek,’’ ‘‘should,’’ ‘‘could,’’ ‘‘would,’’ ‘‘continue,’’ and other similar expressions. You are cautioned that reliance on any forward-looking statement involves risks and uncertainties and that any or all of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions could also be incorrect. In light of these and other risks and uncertainties, the inclusion of forward-looking statements in this document should not be regarded as representations or warranties by us that our plans and objectives will be achieved and these forward-looking statements should be considered in light of various important factors, including those set forth in this section. Subject to the requirements of the Listing Rules, we do not intend publicly to update or otherwise revise the forward-looking statements in this document, whether as a result of new information, future events or otherwise. Accordingly, you should not place undue reliance on any forward-looking information. All forward-looking statements in this document are qualified by reference to this cautionary statement.

Investors should read the entire document carefully and should not consider any particular statements in this document or in published media reports without carefully considering the risks and other information contained in this document.

Prior to the publication of this document, there has been coverage in the media regarding us and the [REDACTED], which contained, among other things, certain financial information, projections, valuations and other forward-looking information about us and the [REDACTED]. We have not authorized the disclosure of any such information in the press or media and do not accept any responsibility for the accuracy or completeness of such media coverage or forward-looking statements. We make no representation as to the appropriateness, accuracy, completeness or reliability of any information disseminated in the media. We disclaim any information in the media to the extent that such information is inconsistent or conflicts with the information contained in this document. Accordingly, prospective investors are cautioned to make their investment decisions on the basis of the information contained in this document only and should not rely on any other information.

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[REDACTED]

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[REDACTED]

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[REDACTED]

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The members of our Board of Directors are as follows:

Name Address Nationality

Executive Directors

Ms. FONG So Ching Lucia Flat B, 14/F, Eastview Chinese (方素貞) 3Cox’sRoad Kowloon Hong Kong

Mr. FONG Chun Man 6 Watford Road Chinese (方振文) The Peak Hong Kong

Mr. FONG Chun Keung Flat B, 15/F, Eastview Chinese Vincent (方振強) 3Cox’sRoad Kowloon Hong Kong

Independent Non-executive Directors

Mr. LAU Ip Keung Kenneth Flat D, 1st Floor Chinese (劉業強) 45 Castle Peak Road Tuen Mun, New Territories Hong Kong

Mr. WU Thomas Jefferson Flat A, 33/F Chinese (胡文新) Duplex Tower 9 Marinella 9 Welfare Road Hong Kong

Ms. HO Nga Yee (何雅儀) Flat 12A Cornwall Court Chinese No 54 King’sRoad North Point Hong Kong

See ‘‘Directors and Senior Management’’ for further details.

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Joint Sponsors Jefferies Hong Kong Limited Suite 2201, 22/F Cheung Kong Center 2 Queen’s Road Central Hong Kong

HSBC Corporate Finance (Hong Kong) Limited 1 Queen’s Road Central Hong Kong

[REDACTED] [REDACTED]

Legal Advisors to our Company As to Hong Kong laws: Robertsons 57th Floor The Center 99 Queen’s Road Central Hong Kong

As to various aspects of Hong Kong laws: Mr. Patrick K.C. CHONG Barrister-at-Law 38/F, Gloucester Tower The Landmark Central, Hong Kong

As to US laws: Clifford Chance 27/F Jardine House One Connaught Place Central Hong Kong

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As to PRC laws: Allbright Law Offices (Shenzhen) 22–23/F, Tower 1 Excellence Century Centre Fu Hua 3 Road Futian District Shenzhen, Guangdong Province 518048 PRC

As to Cayman Islands laws: Conyers Dill & Pearman 29th Floor One Exchange Square 8 Connaught Place Central Hong Kong

As to Macau Laws: Rato Ling Lei & Cortés Advogados e Notários 23/F, Macau Landmark Office Tower Avenida Da Amizade, 555 Macau

Legal Advisors to the Joint As to Hong Kong and US laws Sponsors and the [REDACTED] Linklaters 11th Floor Alexandra House Chater Road Central, Hong Kong

As to PRC laws King & Wood Mallesons 28/F China Resources Tower 2666 Keyuan South Road Nanshan District Shenzhen 518052 PRC

Auditor and Reporting Accountant PricewaterhouseCoopers Certified Public Accountants Registered Public Interest Entity Auditor 22/F, Prince’sBuilding Central Hong Kong

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Compliance Adviser HeungKong Capital Limited Suite 622, Ocean Centre Harbour City Tsim Sha Tsui Hong Kong

[REDACTED] [REDACTED]

Industry Consultant Frost & Sullivan International Limited 1706, One Exchange Square 8 Connaught Place Central, Hong Kong

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Registered Office Cricket Square, Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands

Headquarters and Principal Place of 2/F, Tower A Business in Hong Kong Registered Regent Centre under Part 16 of the Companies 63 Wo Yi Hop Road Ordinance Kwai Chung New Territories Hong Kong

Company Secretary Ms. NG Kit Ying, HKICS 2/F, Tower A Regent Centre 63 Wo Yi Hop Road Kwai Chung New Territories Hong Kong

Authorized Representatives Ms. FONG So Ching Lucia Flat B, 14/F, Eastview 3Cox’sRoad Kowloon Hong Kong

Mr. FONG Chun Man 6 Watford Road The Peak Hong Kong

Audit Committee Ms. HO Nga Yee (Chairlady) Mr. LAU Ip Keung Kenneth Mr. WU Thomas Jefferson

Remuneration Committee Mr. WU Thomas Jefferson (Chairman) Ms. HO Nga Yee Ms. FONG So Ching Lucia

Nomination Committee Mr. FONG Chun Man (Chairman) Mr. WU Thomas Jefferson Ms. HO Nga Yee

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Principal Banks The Hongkong and Shanghai Banking Corporation Limited 1 Queen’s Road Central Hong Kong

Hang Seng Bank Limited 83 Des Voeux Road Central Hong Kong

Dah Sing Bank Limited 26/F, Dah Sing Financial Centre 248 Queen’sRoadEast Wan Chai Hong Kong

[REDACTED] [REDACTED]

Company’s Website www.telford-international.com [REDACTED]

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The information and statistics that appears in this section and elsewhere in this document have been prepared by Frost & Sullivan and reflects estimates of market conditions based on publicly available sources and is prepared primarily as a market research tool. References to Frost & Sullivan should not be considered as the opinion of Frost & Sullivan as to the value of any security or the advisability of investing in us. Our Directors believe that the sources of information contained in this section are appropriate sources for such information and have taken reasonable care in reproducing such information. Our Directors have no reason to believe that such information is false or misleading or that any material fact has been omitted that would render such information false or misleading. The information prepared by Frost & Sullivan and set out in this section has not been independently verified by us, the Joint Sponsors (except for Frost & Sullivan) and neither they give any representations as to its accuracy and the information should not be relied upon in making, or refraining from making, any investment decision. Our Directors confirm that, after taking reasonable care, there is no adverse change in the market information since the date of the F&S Report which may qualify, contradict or have an impact on the information in this section. Further, in relation to the facts, forecasts and other statistics which have been taken from public official sources or statements, neither we nor any of the Joint Sponsors, the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED] or any other parties or affiliates involved in the [REDACTED] or their respective directors, officers, employees, advisors or agents as responsible for the accuracy, reliability and/or completeness of such information.

SOURCE AND RELIABILITY OF INFORMATION

We have commissioned Frost & Sullivan, an Independent Third Party, to conduct a study on China and Hong Kong’s alcoholic and soft beverage markets and to prepare a market research report (the ‘‘F&S Report’’). We agreed to pay Frost & Sullivan a fee of HK$839,000 for the preparation of the F&S Report, and our Directors consider that such fee reflects market rates and are of the view that the payment of such fee does not affect the fairness of conclusions drawn in the F&S Report. Founded in 1961, Frost & Sullivan has over 40 global offices with more than 2,000 industry consultants, market research analysts, technology analysts and economists.

RESEARCH METHODOLOGY

The methodology used by Frost & Sullivan in gathering the relevant market data in compiling the F&S Report included primary interviews and secondary research. Primary interviews are conducted with relevant institutions to obtain objective and factual data and prospective predictions. Secondary research involves information integration of data and publication from publicly available resources, including official data and announcements from government departments, and market research on industry and corporate information from other industry players.

BASES AND ASSUMPTIONS

The F&S Report was compiled based on independent market assessment through both primary and secondary research and the following bases and assumptions: (i) China and Hong Kong’s economies are likely to maintain steady growth in the next decade; (ii) China and Hong Kong’s social, economic, tax and political environments are likely to remain stable from 2020 to 2025; (iii) market drivers such as the development of consumption behaviors, sales channels, rising purchasing power and other key drivers

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Except as otherwise noted, all of the data and forecasts contained in this section are derived from the F&S Report.

OVERVIEW OF ALCOHOLIC BEVERAGE MARKET IN CHINA AND HONG KONG

Alcoholic beverage refers to drinks produced by fermenting or distilling ethanol from fermentation of grains, fruits or other vegetables. Alcoholic beverage could be divided into distilled drinks and fermented drinks. Distilled drinks generally refer to spirits, while fermented drinks include wine, beer, and other drinks such as cider and sake.

According to the F&S Report, alcoholic beverages are divided into five categories, (i) spirits, including Chinese spirits, such as traditional baijiu, and international spirits consist of brandy, whisky, vodka, rum, gin, tequila and others; (ii) wines from fermented grapes including still wines, sparkling wines and other wines; (iii) beer brewed from cereal grains; (iv) pre-mixed, such as bottled cocktails and other flavored ready-to-drink alcoholic beverages with relatively lower alcohol content at under 9.0% ABV; (v) others, including ciders, Chinese huangjiu, sake, etc.

Alcoholic Beverage Market by Retail Sales Value (China), 2015–2025E

1,947.5 Others Pre-mixed 8.4% 1,633.2 1,609.8 0.3% 762.9

539.1 462.7

Beer Spirits 24.8% 61.2% Retail Sales Value CAGR CAGR (RMB in billions) 2015 2020 2025E (15–20) (20–25E) Total 1,633.2 1,609.8 1,947.5 -0.3% 3.9% Spirits 932.3 985.0 1,248.8 1.1% 4.9% Wines 131.8 85.9 99.3 -8.2% 2.9% Wines Beer 445.8 399.4 461.7 -2.2% 2.9% 5.3% Pre-mixed 3.4 4.1 6.0 3.8% 7.9% Others 119.9 135.4 131.7 2.5% -0.6%

Total Market Size in 2020: RMB1,609.8 billion

Source: Frost & Sullivan

China is one of the largest alcoholic beverage markets in the world with a total retail sales value of RMB1,609.8 billion in 2020 while spirits represent the largest market category of RMB985.0 billion retail sales and 61.2% market share in China followed by beer, other alcoholic beverages, wines and pre- mixed accordingly in descending order.

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The total retail sales value of alcoholic beverages in China recorded a mild decrease between 2015 and 2020 at 0.3% CAGR due to the shrinking of overall wine and beer consumption. With the growing consumption power and introduction of new brands and products into the China market, the total retail sales value of alcoholic beverages is projected to return to growth at 3.9% CAGR between 2020 and 2025 reaching RMB1,947.5 billion by 2025 led by spirits and pre-mixed beverages which are growing at 4.9% and 7.9% CAGR during the same period, respectively.

Import International Spirits and Wines Market by Retail Sales Value (China), 2015–2025E

164.9

Import International Spirits 100.5 40.0% 84.0

Import Wines CAGR CAGR Retail Sales Value 60.0% (15–20) (20–25E) (RMB in billions) 2015 2020 2025E Total 84.0 100.5 164.9 3.7% 10.4% Import International 20.4 40.2 90.1 14.5% 17.5% Spirits Import Wines 63.6 60.3 74.8 -1.1% 4.4%

Total Market Size in 2020: RMB100.5 billion

Source: Frost & Sullivan

The total retail sales value of import international spirits and wines for 2020 was RMB100.5 billion representing 6.2% of the overall alcoholic beverage market in China. Consumers in China are continuously developing their behaviors and tastes towards a more diversified dining and drinking experience in both traditional Chinese and international manners. The increasing knowledge and recognition of international alcoholic beverage brands by Chinese consumers also supports the growing market demand for import international spirits and wines. According to the F&S Report, the market penetration of import international spirits and wines is projected to reach 8.5% by 2025 reaching RMB164.9 billion of retail sales value at 10.4% CAGR between 2020 and 2025, significantly outperforming the growth in overall alcoholic beverages of 3.9% CAGR during the same period.

Consumer behaviors and the versatility of import international spirits in different consumption scenarios have been supporting the fast growth of retail sales value of import international spirits from RMB20.4 billion in 2015 to RMB40.2 billion in 2020 and RMB90.1 billion by 2025, representing a 5- year historical CAGR of 14.5% and a 5-year forecast CAGR of 17.5% accordingly.

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Price Segment of Import International Spirits by Retail Sales Value (China), 2015–2025E

90.1

Value Luxury 3.0% Mass 1.2% 8.0%

40.2

Premium 20.4 Mass Premium 66.4% 21.4% Retail Sales Value CAGR CAGR (RMB in billions) 2015 2020 2025E (15–20) (20–25E) Total 20.4 40.2 90.1 14.6% 17.5% Luxury 0.6 1.2 2.4 14.9% 14.9% Premium 13.8 26.7 54.6 14.2% 15.4% Premium Mass 4.3 8.6 22.5 14.9% 21.2% Mass 1.4 3.2 9.4 18.0% 24.0% Value 0.3 0.5 1.2 10.8% 19.1%

Total Market Size in 2020: RMB40.2 billion

Source: Frost & Sullivan

Note: price segments above are defined as (i) luxury (RMB2,000 per bottle or above); (ii) premium (RMB500 to 1,999 per bottle); (iii) premium mass (RMB200 to 499 per bottle); (iv) mass (RMB100 to 199 per bottle); and (v) value (below RMB100 per bottle)

According to the price segments defined by Frost and Sullivan, premium and premium mass markets represented 66.4% and 21.4% of the retail sales value of import international spirits in China in 2020. With the increasing number of new brands and products brought into China, particularly those for casual regular consumption and young consumers, premium mass and mass markets are projected to grow at a faster rate of 21.2% and 24.0% CAGR between 2020 and 2025, respectively, comparing to other price segments and the overall growth of import international spirits in China.

Competitive Landscape in China’s Import International Spirits Market

The import international spirits market in China is relatively concentrated with the top five players accounting for 51.5% of the retail sales value in 2020. Among the top five players, four of them are directly operated and controlled by major international spirits groups with China being part of their global sales and marketing operations where they sell only their self-owned brands and products in China.

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Top Five Players in China’s Import International Spirits Market, 2020

Company A Sales Value Market Share 23.0% Ranking Company in 2020 in 2020 (RMB Million) (%) 1 Company A 9,246 23.0% Others 2 Company B 6,601 16.4% 48.5% 3 Company C 3,490 8.7% 4 The Company 962 2.4% Company B 5 Company D 386 1.0% 16.4% Top 5 20,685 51.5% Others 19,515 48.5% Company C Total 40,200 8.7% The Company Company D 2.4% 1.0%

Source: Frost & Sullivan

Notes:

Company A — an alcoholic beverage company headquartered in France and listed on Euronext

Company B — a joint venture between a luxury goods company headquartered in France and listed on Euronext, and an alcoholic beverage company headquartered and listed in the U.K.

Company C — an alcoholic beverage company headquartered in France and listed on Euronext

Company D — an alcoholic beverage company which is a subsidiary of a beverage company headquartered and listed in Japan

Among the top five players in China’s import international sprits market in 2020, Telford is the only independent player selling import international spirit brands and products from different international spirit companies across all major spirit categories, such as brandy, whisky, Gin, Volka and other liquors.

Being an independent player in the import international spirits market is believed to allow for better flexibility to adjust the brand and product portfolios more effectively and efficiently to meet the latest consumer market trends and developments, achieve better synergies in cross selling a wider product portfolio of different brands to channel customers, and enhance productivity through selling and marketing a wider variety of products to the same sales and distribution network in China.

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Alcoholic Beverage Market by Retail Sales Value (Hong Kong), 2015–2025E

21.8 19.5 Others Spirits 17.0 1.8% 14.7%

Beer 31.2%

CAGR CAGR Retail Sales Value (15–20) (20–25E) (HKD in billions) 2015 2020 2025E Total 19.5 17.0 21.8 -2.7% 5.1% Spirits 2.5 2.5 2.7 0.0% 1.6% Wines 9.7 8.9 11.2 -1.7% 4.7% Beer 7.0 5.3 7.5 -5.4% 7.2% Wines Others 0.3 0.3 0.4 0.0% 5.9% 52.4%

Total Market Size in 2020: HKD17.0 billion

Source: Frost & Sullivan

Note: The pre-mixed beverage market is relatively small in Hong Kong and is grouped into the category of others

The total retail sales value of alcoholic beverage market in Hong Kong was HKD17.0 billion in 2020 which decreased 12.8% comparing to HKD19.5 billion in 2015. The decrease was largely due to reduction in the number of visitors to Hong Kong and social restrictive measures implemented because of COVID-19. Frost and Sullivan projects a recovery starting in 2021 and the retail sales value of alcoholic beverage to return to growth at 5.1% CAGR between 2020 and 2025.

Import International Spirits and Wines Market by Retail Sales Value (Hong Kong), 2015–2025E

13.7 12.0 11.1 Import International Spirits 19.8%

Import Wines CAGR CAGR Retail Sales Value 80.2% (15–20) (20–25E) (HKD in billions) 2015 2020 2025E Total 12.0 11.1 13.7 -1.5% 4.3% Import International 2.3 2.2 2.5 -0.9% 2.6% Spirits Import Wines 9.7 8.9 11.2 -1.7% 4.7%

Total Market Size in 2020: HKD11.1 billion

Source: Frost & Sullivan

Import international spirits and wines represent much of the overall alcoholic beverage market in Hong Kong in terms of retail sales value with a market share of 65.3% in 2020. The projected recovery of import international spirits and wines between 2020 and 2025 is expected to reach 4.3% CAGR with import wines growing at a faster CAGR of 4.7% during the same period.

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Price Segment of Import International Spirits by Retail Sales Value (Hong Kong), 2015–2025E

2.5 2.3 2.2

Value Luxury 9.1% 9.1% Mass 9.1%

Premium Mass 22.7% CAGR CAGR Retail Sales Value (15–20) (20–25E) Premium (HKD in billions) 2015 2020 2025E 50.0% Total 2.3 2.2 2.5 -0.9% 2.6% Luxury 0.2 0.2 0.2 0.0% 0.0% Premium 1.3 1.1 1.2 -3.3% 1.8% Premium Mass 0.5 0.5 0.6 0.0% 3.7% Mass 0.2 0.2 0.3 0.0% 8.4% Value 0.1 0.2 0.2 14.9% 0.0%

Total Market Size in 2020: HKD2.2 billion Source: Frost & Sullivan

Note: price segments above are defined as (i) luxury (HKD2,000 per bottle or above); (ii) premium (HKD500 to HKD1,999 per bottle); (iii) premium Mass (HKD200 to HKD499 per bottle); (iv) mass (HKD100 to HKD199 per bottle); and (v) value (below HKD100 per bottle)

Premium and premium mass markets in import international spirits in Hong Kong represent 50.0% and 22.7% of retail sales value in 2020. Premium mass and mass markets are expected to recover and grow at a faster rate of 3.7% and 8.4% CAGR between 2020 and 2025 comparing to 2.6% for the overall import international spirits market during the same period.

Competitive Landscape in Hong Kong’s Import International Spirits Market

The import international spirits market in Hong Kong is relatively mature and the top five players accounted for 64.7% of the retail sales value in 2020.

Top Five Players in Hong Kong’s Import International Spirits Market, 2020

Sales Value Market Share Ranking Company in 2020 in 2020 Company B (HKD Million) (%) Others 29.2% 35.3% 1 Company B 642 29.2% 2 Company A 288 13.1% 3 The Company 217 9.9% 4 Company E 146 6.6% 5 Company F 129 5.9%

Company A Top 5 1,422 64.7% Company F 13.1% 5.9% Others 778 35.3% Total 2,200 Company E The Company 6.6% 9.9% Source: Frost & Sullivan

Notes:

Company E — an alcoholic beverage company headquartered in the U.K.

Company F — a retail chain headquartered in Hong Kong which is a subsidiary of a retail company headquartered in Hong Kong and listed in Singapore

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Telford was ranked the third largest player in Hong Kong’s import international spirits market in 2020 and the largest independent player. Telford’s deep experience and well-established sales network in Hong Kong led to its achieving a 9.9% market share in terms of retail sales value in Hong Kong in 2020 supported by its ability to partner with and supply to its channel customers a comprehensive portfolio of globally renowned international spirit brands across various spirit categories from different international spirit companies.

Market Drivers and Future Trends of International Spirits in China and Hong Kong

. Evolving consumer behaviors and tastes: consumers’ preference and tastes for alcoholic beverages are changing over time particularly among young generations. International spirits of different categories, styles, tastes and alcohol contents give consumers more options in pairing with different cuisines in different occasions when consumers are generally developing towards enjoying a more diversified lifestyle in different living and social locations from traditional dining venues to causal drinking in social clubs and in-home consumption. Some of the recent trends include Scottish single malt whiskies, various cocktail and pre-mixed alcoholic beverages made from different spirits with lower alcohol content are gaining popularity in the market.

. Consumption upgrade: with the increasing income level and purchasing power, consumers are generally paying more attention and becoming more accustomed to international spirits of different price segments. Consumers are generally developing their habits of drinking international spirits and openness to different international spirits categories and price levels.

. Diversifying sales and marketing channels: consumers are having more and easier access to international spirits from on-trade channels, such as restaurants and social clubs, to off-trade channels, such as supermarkets, convenience stores and specialty retailers. The development of online channels and e-commerce platforms deepens the market penetration to general consumers across regions and provides product information, such as tasting review, drinking guides and mixing recipes, to promote the culture of enjoying international spirits.

. Introduction of new brands and products to the market: international spirit companies are increasing their sales and marketing efforts to develop the consumer awareness of international spirits and introduce new brands and products to the market particularly those which are gaining popularity in foreign markets. New products and drinking recipes generally enhance the growth momentum of the international spirits market.

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OVERVIEW OF SOFT BEVERAGE MARKET IN CHINA AND HONG KONG

According to the F&S Report, packaged ready-to-drink soft beverages are divided into nine major categories of (i) packaged water including sparkling water and other water with artificial flavors; (ii) natural juice and juice flavored beverage including beverages that are flavored with natural juice; (iii) protein beverage including beverages with milk or plant-based protein contents; (iv) functional beverage including energy and sports beverages, and other nutritional beverages; (v) carbonated beverage with artificial flavors and no specific health functions; (vi) tea beverage that is made of the extract or concentrates of tea leaves; (vii) botanical beverage that is made from the infusion or decoction of herbs; (viii) coffee beverage that is made of coffee beans or other coffee products; and (ix) other beverages.

Soft Beverage Market by Retail Sales Value (China), 2015–2025E

1,272.2 Other Beverages Coffee Beverage 4.5% 1.6% Botanical Beverage 860.7 7.4% Packaged Water 707.4 23.3% Tea Beverage 8.7%

CAGR CAGR Carbonated Retail Sales Value (15–20) (20–25E) Beverage (RMB in billions) 2015 2020 2025E 9.6% Total 707.4 860.7 1,272.2 4.0% 8.1% Natural Juice and Packaged Water 131.5 200.2 353.6 8.8% 12.0% Juice Flavored Natural Juice and 136.3 139.9 168.0 0.5% 3.7% Beverage Juice Flavored Beverage 16.3% Protein Beverage 130.3 135.1 176.6 0.7% 5.5% Functional Beverage Functional Beverage 67.4 111.5 187.3 10.6% 10.9% 13.0% Protein Beverage Carbonated Beverage 81.2 82.5 99.1 0.3% 3.7% 15.7% Tea Beverage 69.4 74.9 93.4 1.5% 4.5% Botanical Beverage 54.4 63.6 97.1 3.2% 8.8% Total Market Size in 2020: RMB860.7 billion Other Beverages 32.0 38.9 56.6 4.0% 7.8% Coffee Beverage 4.9 14.1 40.5 23.5% 23.5%

Source: Frost & Sullivan

China is one the largest soft beverage markets in the world with a total retail sales value of RMB860.7 billion in 2020 and a 4.0% CAGR between 2015 and 2020. With the increasing purchasing power and consumers’ demand for convenience and tastes, the soft beverage market is expected to grow at a CAGR of 8.1% from 2020, reaching RMB1,272.2 billion by 2025.

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Natural, Healthy and Functional Soft Beverage Market by Retail Sales Value (China), 2015–2025E

Tea Beverage Botanical Beverage 13.9% 11.8% 762.9 Coffee Beverage 2.6% 539.1 462.7 Functional Beverage CAGR CAGR 20.7% Retail Sales Value (15–20) (20–25E) Natural Juice and (RMB in billions) 2015 2020 2025E Juice Flavored Total 462.7 539.1 762.9 3.1% 7.2% Natural Juice and 136.3 139.9 168.0 0.5% 3.7% Beverage Juice Flavored Beverage 26.0% Protein Beverage 130.3 135.1 176.6 0.7% 5.5% Functional Beverage 67.4 111.5 187.3 10.6% 10.9% Tea Beverage 69.4 74.9 93.4 1.5% 4.5% Protein Beverage Botanical Beverage 54.4 63.6 97.1 3.2% 8.8% 25.1% Coffee Beverage 4.9 14.1 40.5 23.5% 23.5% Total Market Size in 2020: RMB539.1 billion

Source: Frost & Sullivan

According to the F&S Report, consumers are developing their health awareness and paying more attention to soft beverages that contain natural ingredients and have functional benefits to health and different flavors to make the soft beverages more appealing for consumption. The natural, healthy and functional soft beverage market includes flavored soft beverages such as (i) natural juice and juice flavored beverage; (ii) protein beverage; (iii) functional beverage; (iv) tea beverage; (v) botanical beverage; and (vi) coffee beverage.

The retail sales value of the natural, healthy and functional soft beverage was RMB539.1 billion in 2020, representing 62.6% of the total retail sales value of the soft beverage market, and is projected to grow at a 7.2% CAGR between 2020 and 2025, reaching RMB762.9 billion in 2025.

Low-calorie and Low-sugar Natural, Healthy and Functional Soft Beverage Market by Retail Sales Value (China), 2015–2025E 33.6

Others 11.9%

14.3

Tea Beverage 4.5 88.1% CAGR CAGR Retail Sales Value (15–20) (20–25E) (RMB in billions) 2015 2020 2025E Total 4.5 14.3 33.6 26.0% 18.6% Tea Beverage 4.3 12.6 28.3 24.0% 17.6% Others 0.2 1.7 5.3 53.4% 25.5%

Total Market Size in 2020: RMB14.3 billion

Source: Frost & Sullivan

Note: natural, healthy and functional soft beverages of low-calorie (<=20kcal/100ml) and/or low sugar (<=5g/100ml)

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‘‘Low-calorie, low-sugar’’ is another significant consumer trend in the soft beverage market. Low- calorie and low-sugar beverage market represented only 2.7% of the overall natural, healthy and functional soft beverages in 2020 and such market penetration is expected to reach 4.4% by 2025. The low-calorie and low-sugar soft beverage market is expected to grow significantly faster at a 18.6% CAGR between 2020 and 2025 than the overall natural, healthy and function soft beverage market during the same period.

Soft Beverage Market by Retail Sales Value (Hong Kong), 2015–2025E

22.6 Botanical Beverage Coffee Beverage 2.2% 18.1 18.5 2.7% Other Beverages Functional Beverage 0.5% 4.3% Protein Packaged Water Beverage 29.2% 7.6% Carbonated CAGR CAGR Beverage Retail Sales Value (15–20) (20–25E) 14.6% (HKD in millions) 2015 2020 2025E Total 18.1 18.5 22.6 0.4% 4.1% Packaged Water 4.8 5.4 6.9 2.4% 5.0% Tea Beverage 3.8 4.2 5.3 2.0% 4.8% Natural Juice and 3.1 3.0 3.4 -0.7% 2.5% Natural Juice and Juice Flavored Beverage Juice Flavored Tea Beverage Carbonated Beverage 3.4 2.7 3.1 -4.5% 2.8% Beverage 22.7% Protein Beverage 1.3 1.4 1.6 1.5% 2.7% 16.2% Functional Beverage 0.8 0.8 1.1 0.0% 6.6% Coffee Beverage 0.5 0.5 0.6 0.0% 3.7% Botanical Beverage 0.3 0.4 0.5 5.9% 4.6% Total Market Size in 2020: HKD18.5 billion Other Beverages 0.1 0.1 0.1 0.0% 0.0%

Source: Frost & Sullivan

The soft beverage market in Hong Kong is relatively mature and the total retail sale value was HKD18.5 billion in 2020. It is expected that the retail sales value will grow at a 4.1% CAGR between 2020 and 2025, reaching HKD22.6 billion by 2025.

Natural, Healthy and Functional Soft Beverage Market by Retail Sales Value (Hong Kong), 2015–2025E

12.5 Botanical Coffee Beverage 10.3 Beverage 3.9% 9.8 4.9% Functional Beverage 7.8%

Tea Beverage Protein 40.8% Beverage CAGR CAGR Retail Sales Value 13.6% (15–20) (20–25E) (HKD in millions) 2015 2020 2025E Total 9.8 10.3 12.5 1.0% 3.9% Tea Beverage 3.8 4.2 5.3 2.0% 4.8% Natural Juice and 3.1 3.0 3.4 -0.7% 2.5% Natural Juice and Juice Flavored Beverage Juice Flavored Protein Beverage 1.3 1.4 1.6 1.5% 2.7% Beverage Functional Beverage 0.8 0.8 1.1 0.0% 6.6% Coffee Beverage 0.5 0.5 0.6 0.0% 3.7% 29.1% Botanical Beverage 0.3 0.4 0.5 5.9% 4.6% Total Market Size in 2020: HKD10.3 billion

Source: Frost & Sullivan

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The retail sales value of the natural, healthy and functional soft beverage market in Hong Kong was HKD10.3 billion in 2020 and is expected to grow to HKD12.5 billion by 2025 at a 3.9% CAGR. Tea beverage had a significant market share of 40.8% in the natural, healthy and functional soft beverage market in 2020 and is expected to grow at a faster CAGR of 4.8% between 2020 and 2025.

Low-calorie and Low-sugar Natural, Healthy and Functional Soft Beverage Market by Retail Sales Value (Hong Kong), 2015–2025E

Others 2.2 5.9% 1.7 1.4

Tea Beverage 94.1% CAGR CAGR Retail Sales Value (15–20) (20–25E) (HKD in billions) 2015 2020 2025E Total 1.4 1.7 2.2 4.0% 5.3% Tea Beverage 1.3 1.6 2.0 4.2% 4.6% Others 0.1 0.1 0.2 0.0% 14.9%

Total Market Size in 2020: HKD1.7 billion

Source: Frost & Sullivan

Note: natural, healthy and functional soft beverages of low-calorie (<=20kcal/100ml) and/or low sugar (<=5g/100ml)

Low-calorie and low-sugar soft beverage market represented 16.5% of the overall natural, healthy and functional soft beverage market and its retail sales value was HKD1.7 billion in 2020 with an expected CAGR at 5.3% between 2020 and 2025.

Competitive Landscape of Hong Kong’s Natural, Healthy and Functional Soft Beverage Market

Hong Kong’s natural, healthy and functional soft beverage market is relatively mature and concentrated with the top five players accounting for 64.0% of the market share in 2020. The Company has one of the largest product portfolios in Hong Kong’s natural, healthy and functional soft beverage market.

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Top Five Players in Hong Kong’s Natural, Healthy and Functional Soft Beverage Market, 2020

Sales Value Market Share Company G Ranking Company in 2020 in 2020 Others 29.2% (HKD Million) (%) 32.3% 1Company G 3,011 29.2% 2The Company 1,629 15.8% 3Company H 935 9.1% 4Company I 899 8.7% 5Company J 506 4.9%

Company J Top 5 6,980 67.7% The Company 4.9% 15.8% Others 3,320 32.3% Company I Total 10,300 8.7% Company H 9.1%

Source: Frost & Sullivan

Notes:

Company G — a beverage company headquartered and listed in Hong Kong

Company H — a beverage company headquartered and listed in the U.S.

Company I — a food and beverage company headquartered and listed in Switzerland

Company J — a beverage company which is a subsidiary of a conglomerate headquartered and listed in Hong Kong

Market Drivers and Future Trends of Natural, Healthy and Functional Soft Beverage in China and Hong Kong

Increasing health awareness: consumers are increasingly paying more attention to beverages made of natural and healthy ingredients with specific functional benefits to human body. Consumers are sometimes paying a premium for beverages that are natural and healthy with good tastes and quality, such as RTD soft beverages added with natural juice for refreshing flavors, and natural antioxidant and dietary fiber added to soft beverage for additional health benefits.

Low-calorie and low-sugar beverage: this segment is growing significantly faster than the overall soft beverage market. Beverage companies are researching new ingredients to lower the calorie and/or sugar level and alternative ingredients like sweeteners to replace sugar in their products. Tea beverage, considering its distinctive tastes and being a popular beverage in China and Hong Kong among all age groups, will continue to be a major growth driver in the low-calorie and low-sugar natural, healthy and functional soft beverage market and represent a substantial market share.

Product innovations: the demands and preferences of consumers become more and more diversified. Beverage companies are investing more resources in research and development, production facility upgrades, and new technologies to meet consumers’ needs for natural ingredients, product tastes, colors, aromas, functions and packages. The constant product innovation and launch of new beverage products further drives the development of China and Hong Kong’s natural, healthy and functional soft beverage market.

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ENTRY BARRIER ANALYSIS

. Brand building and marketing capabilities. The beverage market is competitive in China and Hong Kong. Deep knowledge and insight about consumer behaviors and market trends are important in building successful and popular beverage brands. It requires a significant amount of investments to establish consumer recognition and brand awareness supported by effective marketing efforts to achieve leadership in the beverage market.

. Sales and distribution network. The ability to sell and distribute beverage products to consumer market in China and Hong Kong is essential to the success of a beverage company. A comprehensive sales and distribution network consists of both online and offline channels to on- tradeandoff-tradecustomersofawidegeographical presence. An effective and efficient sales and distribution network requires a deep understanding of and collaboration with channel partners and customers and an extensive management system of various operations and transactions between the parties involved.

. Product and production capabilities. Research and development, raw material sourcing and production management are core capabilities of and critical to beverage companies in offering quality products that are able to consistently meet the taste and food safety requirements and at the same time achieve production and logistical efficiency. The ability to continue to improve existing and create new products that can meet market demand and consumption trends are important to achieve sustainable growth and profitability in the beverage industry.

RAW MATERIAL ANALYSIS

Tea leaves are an essential raw material used in the production of natural-brew tea beverages. According to the National Bureau of Statistics of China, the price index of tea leaves stayed at a relatively stable level during the period from 2015 to 2020. It is forecasted that the price of tea leaves will maintain at a relatively stable level in the next several years.

Sugar is one of the key raw materials used in our production of postmix. According to the National Bureau of Statistics of China, the price index of sugar grew slightly during the period from 2015 to 2020. It is forecasted that the price of sugar will grow slightly in the next several years.

2014-Based Price Index of Tea Leaves and Sugar (China), 2020

Dec 2014 = 100 130 Tea Leaves Sugar 120 111.9 110.5 111.3 105.2 108.0 110 98.8 100 103.6 104.1 100.7 101.7 98.7 90 98.7 80 70 60 2015 2016 2017 2018 2019 2020

Source: National Bureau of Statistics of China

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The following is a brief summary of the laws and regulations in the PRC and Hong Kong that currently may materially affect us and our operations. The principal objective of this summary is to provide potential investors with an overview of the key laws and regulations applicable to us.

This summary does not purport to be a comprehensive description of all the laws and regulations applicable to our business and operations and/or which may be important to potential investors. Investors should note that the following summary is based on the laws and regulations in force as of the Latest Practicable Date, which may be subject to change.

THE PRC

Laws and Regulations Related to Foreign Investment

PRC Company Law

The establishment, operation and management of companies in China is governed by the PRC Company Law《 ( 中華人民共和國公司法》), as recently amended in 2018. According to the PRC Company Law, companies established in the PRC are either limited liability companies or joint stock limited liability companies. The PRC Company Law applies to both PRC domestic companies and foreign investment companies.

Foreign Investment Law

On March 15, 2019, the National People’s Congress (the ‘‘NPC’’) approved the Foreign Investment Law《 ( 中華人民共和國外商投資法》)(the‘‘FIL’’). The establishment procedures, verification and approval procedures, registered capital requirements, foreign exchange control, accounting practices, taxation, labor matters and all other relevant matters of a wholly foreign-owned enterprise were subject to the FIL. On December 26, 2019, the State Council of the National People’sCongress(the‘‘SCNPC’’) promulgated the Implementing Rules of the Foreign Investment Law, or the Implementing Rules《中華人民共和國外商投資法實施條例》(或《實施條例》), to further clarify and elaborate the relevant provisions of the FIL. The FIL and its Implementing Rules both took effect on January 1, 2020 and replaced three previous major laws on foreign investments in China, namely, the Sino-foreign Equity Joint Venture Law《 ( 中華人民共和國中外合資經營企業法》), the Sino-foreign Cooperative Joint Venture Law《 ( 中華人民共和國中外合作經營企業法》) and the Wholly Foreign-owned Enterprise Law 《( 中華人民共和國外資企業法》), together with their respective implementing rules. Pursuant to the FIL, ‘‘foreign investments’’ (外商投資) refer to investment activities conducted by foreign investors (including foreign natural persons, foreign enterprises or other foreign organizations) directly or indirectly in the PRC, which include any of the following circumstances: (i) foreign investors setting up foreign-invested enterprises in the PRC solely or jointly with other investors; (ii) foreign investors obtaining shares, equity interests, property portions or other similar rights and interests of enterprises within the PRC; (iii) foreign investors investing in new projects in the PRC solely or jointly with other investors; and (iv) investment of other methods as specified in laws, administrative regulations, or as stipulated by the State Council. The Implementing Rules introduce a see-through principle and further provide that foreign-invested enterprises that invest in the PRC shall also be governed by the FIL and its Implementing Rules.

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On December 30, 2019, the MOFCOM and the State Administration for Market Regulation (國家市場監督管理總局)(the‘‘SAMR’’) issued the Measures for the Reporting of Foreign Investment Information《 ( 外商投資信息報告辦法》), which came into effect on January 1, 2020, repealed the Provisional Measures for Filing Administration of Establishment and Changes of Foreign-invested Enterprise《 ( 外商投資企業設立及變更備案管理暫行辦法》) (promulgated by MOFCOM and became effective on October 8, 2016, lastly amended on June 29, 2018). Since January 1, 2020, for carrying out investment activities directly or indirectly in the PRC, the foreign investors or foreign-invested enterprises shall report investment information by submitting initial report, changing report, deregistration report, annual report and etc., to the commerce authorities pursuant to these measures.

The Catalogue of Industries for Guiding Foreign Investment

The Special Administrative Measures for Access of Foreign Investment (Negative List) (2020 Edition)《 ( 外商投資准入特別管理措施(負面清單) (2020年版)》)(the‘‘2020 Negative List’’)were jointly issued by the National Development and Reform Commission and MOFCOM on June 23, 2020, and came into force on July 23, 2020. Foreign investors shall not invest in any of the prohibited sectors specified in the 2020 Negative List and shall obtain the permit for access to foreign investments and comply with the administrative measures before investing in other sectors in the 2020 Negative List. Any industry not falling into the 2020 Negative List is generally open to foreign investors unless specifically restricted by other PRC regulations or rules. The Company’s PRC subsidiaries are operating in the international spirits and wines and natural, healthy and functional beverages industries which are not prohibited or restricted by or subject to any administrative measures stipulated in the 2020 Negative List.

Laws and Regulations Related to Food Safety and Licensing Requirement for Food/Liquor Operation

Food Safety Law and Implementation Rules

In accordance with the Food Safety Law of the PRC《 ( 中華人民共和國食品安全法》), or the Food Safety Law, as effective on June 1, 2009 and most recently amended on April 29, 2021, the State Council implemented a licensing system for food production and trading activities. A person or entity who engages in food production, food selling or catering services shall obtain the license in accordance with the Food Safety Law.

The Food Safety Law sets out, as penalties for violation, various legal liabilities in the form of warnings, orders to rectify, confiscations of illegal gains, confiscations of tools, equipment, etc. The Implementation Rules of the Food Safety Law《 ( 中華人民共和國食品安全法實施條例》), as effective on July 20, 2009 and last amended on March 26, 2019, further specify the detailed measures to be taken for food producers and business operators and the penalties that will be imposed in the event of non- compliance.

Under the Food Safety Law and its Implementation Rules, food production enterprises are required to establish a record system for the inspection of these items, and record information, including the names, specifications, quantities, production date or batch number, shelf life and purchase date, names, address and contact information of suppliers, and dates of purchase of these items. The imported pre- packed food and food additives shall be accompanied with labels and instructions written in Chinese. The labels and instructions shall be consistent with the provisions of the Food Safety Law as well as the

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Implementing Rules on the Food Safety Law and other relevant laws and administrative regulations of the PRC and the requirements of the national food safety standards, and indicate the origin of food and name, address and contact methods of the domestic agent.

Food Recall System

In March 11, 2015, China Food and Drug Administration (國家食品藥品監督管理總局)(now merged into the SAMR) has promulgated the Administrative Measures for Food Recall《 ( 食品召回管理辦法》), effective on September 1, 2015, amended on October 23, 2020). According to the Administrative Measures for Food Recall, food producers and operators shall be the primary persons legally liable for food safety by establishing sound and relevant management system, collecting, analyzing food safety information and being legally liable to the obligations of ceasing to produce, operate, recall and dispose of unsafe foods. Where food business operators find that the food under selling is unsafe, they must immediately suspend the operations, inform related food producers and operators to stop producing and operating, urging consumers to stop consumption by way of notices or announcements and take necessary measures to prevent food safety risks.

Food Operation Licensing

On March 4, 2010, the Ministry of Health promulgated the Administrative Measures on Food and Beverage Service Licensing and Administrative Measures on Food Safety Supervision in Food and Beverage Services《 ( 餐飲服務許可管理辦法及餐飲服務食品安全監督管理辦法》)(the‘‘Administrative Measures on Service’’). Pursuant to the Administrative Measures on Service, the Local Food and Drug Administrations at various levels are responsible for the administration of food and beverage service licensing. Catering service providers are required to obtain a catering service license and are responsible for safety in catering services in accordance with the laws. A service provider providing catering services at different locations or venues must obtain separate catering service licenses for each venue. In the event of any change in the operation locations, a new application for catering service license is required.

On August 31, 2015, China Food and Drug Administration promulgated the Administrative Measures for Food Operation Licensing《 ( 食品經營許可管理辦法》)(the‘‘Administrative Measures on Operation’’), which was amended on November 17, 2017. According to the Administrative Measures on Operation, a person or entity that engages in food/liquor selling and catering services within PRC (herein after referred as ‘‘food/liquor operator’’) shall obtain a food operation license in accordance with the law. Food operators engaging at different location or venues must obtain separate food operation licenses for each venue under the principle of one license for one site. On September 30, 2015, China Food and Drug Administration promulgated the Announcement on Using the Food Operation Licenses《 ( 關於啟用《食品經營許可證》的公告》). Pursuant to the Announcement on Using the Food Operation Licenses, the catering service license was replaced by the food operation license which is valid for five years upon its issuance.

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Liquor Circulation

The Guidance of Ministry of Commerce on Promoting Healthy Development of Liquor Circulation for the ‘‘13th Five-Year’’ Period《 ( 商務部關於「十三五」時期促進酒類流通健康發展的指導意見》), which was promulgated by MOFCOM on February 13, 2017 stipulates to eliminate the regional alcohol ban, to clean up and abolish the relevant regulations and practices that hinder the free circulation of alcohol,andtopromotethemarketformation and circulation of alcohol.

However, liquor operators may be required by local governments to obtain local licenses for the distribution of alcoholic products. For example, pursuant to the Administrative Measures of Shanghai Municipality for Production and Sales of Alcohol Commodities《 ( 上海市酒類商品產銷管理條例》), which was amended by the Standing Committee of Shanghai People’s Congress on September 17, 2010, local enterprises that engage in alcohol wholesaling must apply to the municipal wine monopoly bureau for an alcohol wholesale license, while local enterprises that engage in alcohol retailing must apply to the district (county) wine administrative department for an alcohol retail/wholesale license.

According to the Notice Regarding the Merger of the Permit of Alcohol Wholesaling into the Permit of Circulation of Foodstuffs, which was promulgated by the Food and Drug Administration of Shenzhen Municipality on May 28, 2015, the permit of Alcohol wholesaling is merged into the permit of circulation of foodstuffs. The entity only needs to apply for addition of ‘‘alcohol wholesaling’’ item into the license of circulation of foodstuffs when it wants to engage in the wholesale business of alcohol commodities.

Laws and Regulations Related to Online Retail Business

Pursuant to the Notice of the General Office of the Ministry of Commerce on the Relevant Issues Concerning the Examination, Approval and Administration of Projects of Foreign Investment in Internet and Vending Machine Sales promulgated by the MOFCOM《 ( 商務部辦公廳關於外商投資互聯網、自動售貨機方式銷售項目審批管理有關問題的通知》), a foreign-invested enterprise may engage in online direct sales, but must display its business license and approval certificate at an eye-catching spot on the operating website.

According to the Administrative Measures for Online Trading promulgated by the State Administration for Industry and Commerce《 ( 網絡交易管理辦法》)(1), dealers engaging in the online trading of commodities and provision of relevant services must undergo industrial and commercial registration formalities in accordance. In August 2018, the SCNPC promulgated the E-commerce Law 《( 中華人民共和國電子商務法》), which took effect on January 1, 2019. The E-commerce Law stipulates that in case of any claim from end customers requesting the e-commerce platform operator to bear any compensation liability, the e-commerce platform operator may seek recourse from the merchants using the platform.

Registration Requirements for the Import and Export of Goods

Pursuant to the Foreign Trade Law of the PRC《 ( 中華人民共和國對外貿易法》), which was promulgated by the SCNPC on May 12, 1994, and was last amended on November 7, 2016 with effect from the same day, foreign trade dealers engaged in the import and export of goods or technologies shall

(1) The Administrative Measure for the Supervision of Online Trading (網絡交易監督管理辦法) is promulgated by the SAMR and was effective on May 1, 2021.

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The importer shall establish a food and food additives import and sale record system to truthfully record the names, specifications, quantities, dates of production, batch numbers of production or import, shelf life, names, address and contact methods of exporters and purchasers, dates of delivery, etc. Such import and sale records shall be true and shall be kept for at least six months after the expiration of the shelf life; if there is no explicit shelf life, the records shall be kept for at least two years.

Laws and Regulations Related to Protection of Consumer Rights

The Consumer Protection Law

The Law of the PRC on the Protection of Rights and Interests of Consumers《 ( 中華人民共和國消費者權益保護法》)(the‘‘Consumer Protection Law’’) which promulgated by the SCNPC on October 25, 2013 and became effective on March 15, 2014 is to protects consumers’ rights when they purchase or use goods and accept services. All business operators must comply with Consumer Protection Law when they sell goods and/or provide services to consumers. Pursuant to the Consumer Protection Law, consumers shall enjoy a series of rights, including the right not to be harmed in respect of personal and property safety, the right to know the true situation of goods purchased or used or services accepted, the right to choose goods or services, the right to fair trading, the right to obtain damages and compensation legally, the right to establish society or organization to sustain and protect personal legal interests legally, the right to obtain knowledge relating to consumption and consumer rights protection, the right to have personal dignity, customs and practices being respected and the right to supervise goods and services and safeguard consumer rights.

Information Security and Privacy Protection

Pursuant to the Civil Code of the PRC《 ( 中華人民共和國民法典》), which was promulgated by NPC on May 28, 2020 and came into effect on January 1, 2021, the personal information of a natural person shall be protected. Any organization or individual shall legally obtain the personal information of others when necessary and ensure the safety of such personal information, and shall not illegally collect, use, process or transmit the personal information of others, or illegally buy or sell, provide or make public the personal information of others.

Product Quality

The principal legal provisions governing product liability are set out in the Product Quality Law of the PRC《 ( 中華人民共和國產品質量法》)(the‘‘Product Quality Law’’), which was promulgated by the SCNPC on February 22, 1993 and last amended on December 29, 2018 with effect from the same day. The Product Quality Law is applicable to all activities of production and sale of any product within the territory of the PRC, and the producers and sellers shall be liable for product quality in accordance with the Product Quality Law. Consumers or other victims who suffer personal injury or property losses due to product defects may demand compensation from the producer as well as the seller. Where the responsibility for product defects lies with the producer, the seller has the right to recover such compensation from the producer if they take the responsibility and make a compensation, and vice versa.

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Laws and Regulations Related to Food/Liquor Advertisement

The Advertising Law of the PRC《 ( 中華人民共和國廣告法》) which was promulgated by the SCNPC on October 27, 1994 and most recently revised on April 29, 2021, is formulated to protect the legitimate rights and interests of consumers. According to the Advertising Law of the PRC, advertisements shall not contain false or misleading contents, and shall not deceive or mislead consumers. Advertisers shall be responsible for the veracity of their advertisement contents. According to the Article 26, Chapter 2 of the Advertising Law of the PRC, alcohol beverage advertisements may not (i) induce or encourage excessive alcohol consumption or promote uncontrolled drinking (ii) show drinking actions (iii) show the activity of operating a car, boat, airplane or other transport or (iv) give an explicit or implicit expression that alcohol consumption has the effect of eliminating tension and anxiety, enhancing physical stamina or similar effects. Moreover, alcohol beverage advertisements may not be published in mass media that targets minors.

Laws and Regulations Related to Intellectual Property

Trademark

The Trademark Law of the PRC (Revised in 2019)《 ( 中華人民共和國商標法(2019修訂)》)andthe Implementation Regulations for the Trademark Law of the PRC (Revised in 2014)《 ( 中華人民共和國商標法實施條例(2014修訂)》) provide the basic legal framework for the regulation of trademarks in the PRC. The trademark office is responsible for the registration and administration of trademarks throughout the country. In China, registered trademarks include commodity trademarks, service trademarks, collective marks and certification marks. A foreign trademark can be protected by law after it was approved to be registered by the trademark office. The period of validity of a registered trademark is ten years from the date of registration. The renewal is allowed thereafter and the period of validity of each renewal is ten years.

Domain names

The Ministry of Industry and Information Technology of the PRC (the ‘‘MIIT’’)promulgatedthe Administrative Measures on Internet Domain Names《 ( 互聯網域名管理辦法》)(the‘‘Domain Name Measures’’) on August 24, 2017. According to the Domain Name Measures, the MIIT is in charge of the administration of the PRC internet domain names. The domain name registration services follow a ‘‘first come, first file’’ principle. Applicants for registration of domain names shall provide their true, accurate and complete information of such domain names to domain name registration service institutions.

Regulations Related to Pricing

AccordingtothePricingLawofthePRC(《中華人民共和國價格法》), which was promulgated by SCNPC on December 29, 1997 and took effect on May 1, 1998, business operators must, as required by the government departments in charge of pricing, mark the prices explicitly and indicate the name, production origin, specifications, and other related particulars clearly. Business operators may not sell products at a premium or charge any fees that are not explicitly indicated. Business operators must not commit the specified unlawful pricing activities, such as colluding with others to manipulate the market price, providing fraudulent discounted price information, using false or misleading prices to deceive customers to transact, or conducting price discrimination against other business operators.

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Laws and Regulations Related to Tax

Enterprise income tax

According to the Enterprise Income Tax Law of the PRC《 ( 中華人民共和國企業所得稅法》), which was promulgated by the National People’s Congress on March 16, 2007 and was last amended on December 29, 2018, and the Implementation Regulations of the Enterprise Income Tax Law of the PRC 《( 中華人民共和國企業所得稅法實施條例》), which was promulgated by the State Council on December 6, 2007 and amended on April 23, 2019, enterprises are classified into resident enterprises and non- resident enterprises. A resident enterprise shall pay enterprise income tax on its income deriving from both inside and outside China at the rate of enterprise income tax of 25%. A non-resident enterprise that has an establishment or place of business in the PRC shall pay enterprise income tax on its income derived from inside China and obtained by such establishment or place of business, and on its income derived from outside China but has actual relationship with such establishment or place of business, at the rate of enterprise income tax of 25%.

Value-added tax

The Interim Regulations on Value-added Tax of the PRC《 ( 中華人民共和國增值稅暫行條例》), which was promulgated by the State Council on December 13, 1993, and was recently amended on November 19, 2017 and the Implementation Rules of the Interim Regulations on Value-added Tax《 ( 中華人民共和國增值稅暫行條例實施細則》), which was promulgated by the Ministry of Finance of the PRC (the ‘‘MOF’’) and became effective on December 25, 1993, and was recently amended on October 28, 2011, set out that entities or individuals engaging in sale of goods, provision of processing services, repairs and replacement services or importation of goods within the territory of the PRC shall pay value- added tax (the ‘‘VAT’’). For the sales of goods, services or importation of goods by the taxpayer, the rate of VAT is 17%; for the sales of services and intangible assets by the tax payer, the rate of VAT is 6%. Pursuant to the Circular on Adjusting Value-added Tax Rates《 ( 關於調整增值稅稅率的通知》), which was promulgated by the MOF and the State Administration of Tax of the PRC on April 4, 2018 and came into effect on May 1, 2018, a VAT taxpayer engages in taxable sales activity for the VAT purpose or imports goods, the previous applicable 17% tax rate shall be adjusted to be 16% and 10%.

According to the Announcement on Policies for Deepening the VAT Reform which was promulgated by the MOF on March 20, 2019, the tax rate of 16% applicable to the VAT taxable sale or import of goods by a general VAT taxpayer shall be adjusted to 13%; and the tax rate of 10% applicable thereto shall be adjusted to 9%.

Excise Tax

Pursuant to Interim Regulations of the PRC on Excise Tax (as amended)《 ( 中華人民共和國消費稅暫行條例(經修訂)》), entities and individuals engaged in producing, commissioned processing or importing consumer goods as specified in the regulations, within the territory of the PRC, and all other entities and individuals determined by the State Council to sell such consumer goods specified in the regulations will be the taxpayers of excise tax and must pay such excise tax in accordance with the regulations. The taxable items and tax rates of excise tax will be subject to the ‘‘Schedule of Items and Rates of Excise Tax’’ attached to the regulations and alcohol drinks are clarified as excise tax items subject to excise tax on the manufacturer.

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Laws and Regulations Related to Foreign Exchange and Dividend Distribution

Foreign Currency Exchange

The principal regulation governing foreign currency exchange in the PRC is the Regulations on the Foreign Exchange Control of the PRC《 ( 中華人民共和國外匯管理條例》)(the‘‘Foreign Exchange Control Regulations’’), which was promulgated by the State Council of the PRC (中華人民共和國國務院) on January 29, 1996, took effect from April 1, 1996 and was most recently amended on August 5, 2008. Under the Foreign Exchange Control Regulations, RMB is generally freely convertible for payments of current account items, such as trade and service-related foreign exchange transactions and dividend payments, but not freely convertible for capital account items, such as capital transfer, direct investment, investment in securities, derivative products or loans unless prior approval by the competent authorities for the administration of foreign exchange is obtained.

SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign Invested Enterprises, or the SAFE Circular 19《 ( 國家外匯管理局關於改革外商投資企業外匯資本金結匯管理方式的通知(或國家外匯管理局19號文)》), in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises《 ( 國家外匯管理局綜合司關於完善外商投資企業外匯資本金支付結匯管理有關業務操作問題的通知》). SAFE further promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or the SAFE Circular 16《 ( 國家外匯管理局關於改革和規範資本項目結匯管理政策的通知(或國家外匯管理局16號文)》), as effective on June 9, 2016, which, among other things, amended certain provisions of SAFE Circular 19. According to SAFE Circular 19 and SAFE Circular 16, the flow and use of the RMB capital converted from foreign currency denominated registered capital of a foreign investment company is regulated such that RMB capital may not be used for business beyond its business scope or to provide loans to persons other than affiliates unless otherwise permitted under its business scope. Violations of SAFE Circular 19 or SAFE Circular 16 could result in administrative penalties.

On January 18, 2017, SAFE issued the Circular on Further Advancing Foreign Exchange Administration Reform to Enhance Authenticity and Compliance Reviews《 ( 國家外匯管理局關於進一步推進外匯管理改革完善真實合規性審核的通知》), which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities.

Dividend Distribution

According to the Enterprise Income Tax Law of the PRC and its Implementation Regulations, generally a withholding tax rate of 10% will be imposed on dividends paid to non-PRC resident investors.

Pursuant to the Protocol V of the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income which valid on December 6, 2019《 ( 內地和香港特別行政區關於對所得稅避免雙重徵稅和防止偷漏稅的安排第五議定書》), if a Hong Kong resident enterprise is determined by the competent tax authority in China to have satisfied the relevant conditions and requirement under the arrangement and other applicable laws, the 10% withholding tax on the dividends

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Laws and Regulations Related to Employment and Social Welfare

The Labor Contract Law

The Labor Law of the PRC《 ( 中華人民共和國勞動法》) which came into effect on January 1, 1995 and lastly amended on December 29, 2018 stipulates general provisions with regard to labor contracts, working hours, wages, occupational safety and health, special protection for female staff and juvenile workers, vocational training, social insurance and welfare, and settlement of labor disputes.

The Labor Contract Law of the PRC《 ( 中華人民共和國勞動合同法》) which was promulgated on June 29, 2007 and amended on December 28, 2012 and the Implementation Regulations on the Labor Contract Law of the PRC《 ( 中華人民共和國勞動合同法實施條例》) which was promulgated and implemented on September 18, 2008 by the State Council, provide that a written labor contract shall be concluded for the establishment of a labor relationship. Labor contracts concluded pursuant to the law shall be legally binding and the employers and the workers shall perform the obligations stipulated in the labor contracts. When recruiting a worker, the employer shall truthfully notify the worker of the job duties, working conditions, work premises, occupational hazards, work safety and health conditions, labor remuneration and any other information in which the worker is interested to know. Employers shall promptly pay labor remuneration to workers in full amount pursuant to the stipulations of the labor contract and the provisions of the State.

Social Insurance

According to the Social Insurance Law of the PRC《 ( 中華人民共和國社會保險法》)implemented on July 1, 2011 and amended on December 29, 2018, employers are obliged to provide their employees in the PRC with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, labor injury insurance and medical insurance in accordance with the rates provided under the relevant regulations.

Housing Provident Funds

Under the Administrative Regulations on Housing Provident Funds《 ( 住房公積金管理條例》), promulgated by the State Council on April 3, 1999, amended on March 24, 2002 and March 24, 2019, employers must register with applicable housing provident fund management centers and establish a special housing provident fund account in an entrusted bank. Both employers and their employees are required to contribute to the housing funds. The enterprise shall pay the full amount of the housing provident fund on time and shall not be overdue in the payment or underpay the housing provident fund.

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Laws and Regulations Related to Property Leasing

Pursuant to Administrative Measures on the Lease of Commodity Housing《 ( 商品房屋租賃管理辦法》) issued by Ministry of Housing and Urban-Rural Development on December 1, 2010, parties to a lease agreement shall complete the lease registration and filing process with the competent construction (real-estate) departments of the municipalities directly under the PRC governments of cities and counties where the housing is located within 30 days after the lease agreement is signed. For those who fail to comply with the above regulations, such competent departments may impose a fine ranging from RMB1,000 to RMB10,000 per lease.

Laws and Regulations Related to Anti-Unfair Competition and Anti-Monopoly Law

Anti-Unfair Competition Law

Competitions among business operators are generally governed by the Law of the PRC for Anti- Unfair Competition《 ( 中華人民共和國反不正當競爭法》)(the‘‘Anti-Unfair Competition Law’’), which was promulgated by the SCNPC on September 2, 1993, took effect from December 1, 1993 and was lastly amended on April 23, 2019. According to the Anti-Unfair Competition Law, operators should abide by the principles of involuntariness, equality, fairness, honesty, and credibility, and abide by laws and recognized business ethics. An operator, in violation of the Anti-Unfair Competition Law, disrupting the competition order, and infringing the legitimate rights and interests of other operators or consumers, constitutes unfair competition. When the legitimate rights and interests of an operator are damaged by unfair competition, it may start a lawsuit in the people’s court. In contrast, if an operator violates the provisions of the Anti-Unfair Competition Law, engages in unfair competition and causes damage to another operator, it shall be liable for damages.

Anti-Monopoly Law

Pursuant to the Anti-Monopoly Law of the PRC《 ( 中華人民共和國反壟斷法》)(the‘‘Anti- Monopoly Law’’) which took effect on August 1, 2008, ‘‘dominant market position’’ (市場支配地位) refers to a position where an operator may manipulate the price, volume and other trade conditions of a commodity on its relevant market, or may obstruct or otherwise affect the entrance of other operators into relevant markets. Operators who hold a dominant market position are prohibited from engaging in practices that may be classified as an abuse of said position, such as: (a) selling products at unfairly high or unfairly low prices; (b) selling products at a price lower than cost without legitimate grounds; (c) refusing to trade with the other trading party without legitimate grounds; (d) forcing another trading party to trade only with said operator or other operators specified by said operator without legitimate grounds; (e) conducting tie-in sales or adding other unreasonable conditions on a deal without legitimate grounds; (f) discriminating among trading parties of the same qualifications with regards to trade price or other terms without legitimate grounds; or (g) other practices recognized by the anti-monopoly law enforcement authorities as abuse of dominant market position. Where an operator abuses a dominant market position, the anti-monopoly law enforcement authorities will order a halt to the offending behavior, confiscate the illegal earnings and impose a fine from 1% to 10% of the previous year’s sales revenue.

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HONG KONG

Laws and Regulations Relating to our Business Operations

Import and Export Ordinance (Chapter 60 of the Laws of Hong Kong) (the ‘‘IEO’’)

The IEO provides for the regulation and control of the import and export of articles into and from Hong Kong, along with the handling and carriage of such articles. The IEO is relevant as our business operations involve the import and export of alcoholic beverages and other food items.

Under Section 6C of the IEO, no person shall import any article prescribed in Schedule 1 of the Import and Export (General) Regulations (Chapter 60A of the Laws of Hong Kong) (the ‘‘IER’’)except under and in accordance with an import licence. Under Section 6D of the IEO, no person shall export any article specified in the second column of Schedule 2 of the IER except under and in accordance with an export licence issued by the Director-General of Trade and Industry. Such import and export licences are issued under Section 3 of the IEO.

Under Regulations 4 and 5 of the Import and Export (Registration) Regulations (Chapter 60E of the Laws of Hong Kong), any person who imports or exports any article other than an exempted article shall lodge an accurate and complete import or export declaration relating to such article using services provided by a specified body with the Commissioner of Customs and Excise (the ‘‘Commissioner’’). The exempted articles largely concern articles for personal use or gifts and are inapplicable to our business operations. The declaration must follow the requirements that the Commissioner may specify and be lodged within 14 days of such import or export. Any person required to lodge an import or export declaration who fails to do so without reasonable excuse shall be liable on summary conviction to a fine of HK$1,000, and, commencing on the day following the date of conviction, to a fine of HK$100 in respect of every day the declaration is still not lodged.

Food Business Regulation (Chapter 132X of the Laws of Hong Kong) (the ‘‘FBR’’)

The FBR governs the running and licensing of food factory businesses. As we operate a production site in Yuen Long, Hong Kong for postmix production, the FBR is applicable to us. Section 31(1) of the FBR prohibits the running of a food factory business (any food business which involves the preparation of food for sale for human consumption off the premises) without a licence. Under Section 31(1), no person shall carry on or cause, permit or suffer to be carried on any food factory business except with a food factory licence. A provisional food factory licence shall be valid for six months and renewable on one occasion for another six months, while a full food factory licence is valid for 12 months and renewable annually. Under Section 35, any person in contravention of regulation 31(1) shall be guilty of an offence and be liable to a maximum fine of HK$50,000, with an additional fine of HK$900 per day for a continuing offence, and imprisonment for six months.

Weights and Measures Ordinance (Chapter 68 of the Laws of Hong Kong) (the ‘‘WMO’’)

The WMO regulates trade transactions regarding goods supplied by weight of measure, creating offences in the case of contraventions.

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Under Section 16, no person shall supply any goods by weight or measure otherwise than by net weight or measure; and no person shall supply any pre-packed goods by weight or measure unless the net weight or measure in an authorized unit is legibly marked upon the outside of the container, or upon a firmly attached label firmly attached thereto. Under Section 18, no person who supplies goods shall make any statement, whether orally or in writing or otherwise, which he knows to be false or misleading as to a material particular regarding the quantity of the goods supplied. Under Section 19, no person shall supply, or cause to be supplied, any goods by weight, measure or number short of the quantity purported to be supplied or less than that which corresponds to the price of the goods. Under Section 21, any person who sells goods and gives the purchaser a false warranty commits an offence (unless he took all reasonable steps to ensure the warranty was and would continue to be accurate).

The penalties for violating the abovementioned provisions are found in Section 32 of the WMO. A person who commits an offence under Section 16 of the WMO is liable to a fine of HK$5,000. A person who commits an offence under Section 19 is liable to a fine of HK$10,000. A person who commits an offence under Sections 18(1) or 21 is liable to a fine of HK$20,000.

Laws and Regulations Relating to Food Safety

Public Health and Municipal Services Ordinance (Chapter 132 of the Laws of Hong Kong) (the ‘‘PHMSO’’)

The PHMSO requires the manufacturers and sellers of food to ensure that their products are fit for human consumption and comply with the requirements in respect of food safety, food standards and labelling. As we sell and distribute beverage products and food items in Hong Kong, we are subject to the regulation of the PHMSO. Sections 50 to 54 of the PHMSO regulate and provide for penalties in relation to the provision of food to purchasers.

Under Section 50(1) of the PHMSO, any person who adds any substance to food, uses any substance as an ingredient in the preparation of food, abstracts any constituent from food or subjects food to any other process or treatment such that the food is injurious to health, intending the food to be sold for human consumption in that state, shall be guilty of an offence. Under Section 52(1) of the PHMSO, subject to the defences in section 53 of PHMSO, any person who sells any food which is not of the nature, substance, or quality demanded by the purchaser shall be guilty of an offence. The consequences of this contravention are stated in Schedule 9 of the PHMSO. Under Schedule 9, any person who contravenes Sections 50(1) or 52(1) shall be liable to a fine of HK$10,000 and sentenced to three months of imprisonment.

Section 54 of the PHMSO provides that any person who sells or offers or exposes for sale, or has in his possession, deposits with, or consigns to, any person for the purpose of sale or preparation for sale, any food intended for, but unfit for, human consumption shall be guilty of an offence. Section 61 of the PHMSO further creates an offence for the false labelling and advertisement of food. Under Section 61(1), any person who gives or displays with any food sold or exposed for sale by him, a label which falsely describes the food, or is calculated to mislead as to its nature, substance or quality, shall be guilty of an offence. Similarly, any person who publishes, or is a party to the publication of an advertisement falsely describes any food, or is likely to mislead as to the nature, shall be guilty of an offence. This includes misleading the nutritional or dietary value of any food. Under Schedule 9, any person who contravenes Sections 54(1) or 61 shall be liable to a fine of HK$50,000 and sentenced to six months of imprisonment.

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Food and Drugs (Composition and Labelling) (Amendment) Regulations (Chapter 132W of the Laws of Hong Kong) (the ‘‘FDR’’)

The FDR regulate the information which must be stated on the packaging of pre-packed foods.

Under Regulation 3 of the FDR, the manufacturing of foods and drugs shall be up to the standards as specified under schedule 1 of the FDR. Further, under Regulation 4A of the FDR, unless exempted under Schedule 4, prepackaged food shall be marked or labelled in accordance with Schedule 3 of the FDR. Under Schedule 3, all pre-packed foods must legibly state on their packaging: (a) the food name or designation; (b) the list of ingredients; (c) the durability (i.e. ‘‘best before’’ or ‘‘use by’’ date) indication; (d) statement of special conditions for storage or instruction for use; (e) name and address of the manufacturer or packer; and (f) count, weight or volume.

Under Regulation 4B of the FDR, unless exempted under Schedule 6, prepackaged food shall be labelled with its energy value and nutrient content following Part 1 of Schedule 5 of the FDR. The contents of nutrient labels are set out in Schedule 5, and nutrition claims in food labels, if any, made on the label of, or in any advertisement for, a prepackaged food shall conform to Part 2 of Schedule 5. Part 2 of Schedule 5 regulates three types of nutrition claims: nutrient content claims, nutrient comparative claimsandnutrientfunctionclaims.

Nutrient content claims are regulated under Section 6 of Part 2, Schedule 5 of the FDR. The requirements for such claims are stated in detail in Schedule 8. For instance, in relation to sugar, the words, ‘‘low’’ or ‘‘little’’ or ‘‘low source’’ or ‘‘contains a small amount of’’ canonlybeusedforliquid foods containing not more than 5g of sugars per 100 mL. The words ‘‘free,’’ ‘‘zero,’’ ‘‘no’’ or ‘‘without’’ can only be used for liquid foods containing no more than 0.5g of sugars per 100 mL. In relation to energy, the words, ‘‘low’’ or ‘‘little’’ or ‘‘low source’’ or ‘‘contains a small amount of’’ can only be used for liquid foods containing not more than 20 kcal (80kJ) of energy per 100 mL. The words ‘‘free,’’ ‘‘zero,’’ ‘‘no’’ or ‘‘without’’ can only be used for liquid foods containing no more than 4 kcal (17kJ) of energy per 100 mL.

Nutrient function claims are regulated under Section 8 of Part 2, Schedule 5 of the FDR. Such claims (a) can only be made for nutrients specified in Schedule 8, (b) must be based on scientific substantiation and scientific consensus, and (c) must contain information on the physiological role of the nutrient concerned.

Under Schedules 4 and 6 of the FDR, the abovementioned labelling requirements are exempt for wines and other drinks with an alcoholic strength by volume of 10% or above. As for drinks with an alcoholic strength by volume of more than 1.2% but less than 10%, the durability period must be stated on the packaging. However, if the ingredients for any exempt alcoholic beverages are nonetheless labelled on the packaging, under Schedule 4 Section 3 of the FDR, such labelling must still follow the requirements in Schedule 4 Section 2.

Under Section 5, subject to defences, any person who advertises for sale, sells or manufactures for sale any food which does not conform with the abovementioned regulations is liable to a maximum fine of HK$50,000 and imprisonment for six months.

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There are current proposed amendments to the FDR, requiring prepackaged foods (including edible fats and oils), if containing hydrogenated oils, to indicate accordingly (e.g. ‘‘hydrogenated oils’’ or the name of the oil qualified by the word ‘‘hydrogenated’’) in the list of ingredients.

Food Safety Ordinance (Chapter 612 of the Laws of Hong Kong) (the ‘‘FSO’’)

The FSO establishes a registration scheme for food importers and distributors, governs the keeping of records, and imposes food import controls.

The regulations concerning food importation and food distribution are set out in Sections 4 and 5 of the FSO respectively. Under Sections 4 and 5, a person must not import food or conduct food distribution unless he is registered as a food importer or food distributor respectively with the Director of Food and Environmental Hygiene. Under Sections 4(2) and 5(2), any person conducting an unregistered food importation or food distribution business commits an offence and is liable to a maximum fine of HK$50,000 and imprisonment for six months. Under Section 9 of the FSO, the registration is valid for three years and may be renewed upon payment of the renewal fee, as specified in Section 13.

Harmful Substances in Food Regulations (Chapter 132AF of the Laws of Hong Kong) (the ‘‘HSFR’’)

The HSFR prohibits the import or sale of specified food containing prohibited substances or specified harmful substances in excessive concentrations. Under Section 3 of the HSFR, a person must not import, consign, deliver, manufacture or sell, for human consumption, any food of a description specified in Column D of Schedule 1 which contains any substance specified opposite thereto in Column B, or the description of such substance in Column C, in greater concentration than is specified opposite thereto in Column E. There are current proposed amendments to the HSFR. These amendments include strengthening the regulation on aflatoxins, deoxynivalenol and patulin, three types of mycotoxins; setting standards for Benzo[a]pyrene, glycidylfatty acid esters, melamine, -3-monochloropropane-1,2-dioland erucic acid, harmful substances in edible fats and oils, condiments or formula products intended for infants; and prohibiting the sale of any food (including edible fats and oils) containing partially hydrogenated oils (‘‘PHOs’’), and prohibiting the import of any edible fats and oils containing PHOs, including trans fatty acids.

Laws and Regulations Relating to Environmental Protection

Water Pollution Control Ordinance (Chapter 358 of the Laws of Hong Kong) (the ‘‘WPCO’’)

The WPCO regulates and controls the discharge of waste or polluting matter into the waters of Hong Kong.

Under Section 8, a person commits an offence if they discharge any waste or polluting matter into the waters of Hong Kong in a water control zone, or any such matter into any inland waters in a water control zone which tends to impede the proper flow of the water in a manner leading or likely to lead to a substantial aggravation of pollution, or any poisonous or noxious matter into the waters of Hong Kong. Under Section 9, a person who discharges any matter into a communal sewer or communal drain in a water control zone other than a discharge of domestic sewage or unpolluted water for the carriage of surface drainage water commits an offence. Under Section 9(3), ‘‘unpolluted water’’ is defined as (a) rain water from any part of a building, including any area appurtenant to a building, or (b) water which

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Under Section 11, a person who commits an offence under Sections 8 or 9 (other than by discharging any poisonous or noxious matter) is liable to imprisonment for six months and a fine of HK$200,000 for a first offence, and a fine of HK$400,000 for a second or subsequent offence, and a fine of HK$10,000 for each day if the offence is a continuing offence. A person who commits an offence under Sections 8 or 9 by discharging any poisonous or noxious matter is liable to a fine of HK$400,000 and imprisonment for one year for a first offence, and a fine of HK$1,000,000 and imprisonment for two years for a second or subsequent offence, and a fine of HK$40,000 for each day if the offence is a continuing offence.

Waste Disposal Ordinance (Chapter 354 of the Laws of Hong Kong) (the ‘‘WDO’’)andWaste Disposal (Chemical Waste) (General) Regulation (Chapter 354C of the Laws of Hong Kong) (the ‘‘WDR’’)

The WDO controls and regulates the production, storage, collection and disposal of waste, and the licensing and registration of places and persons in relation to waste disposal. Companies shall comply with the WDO and its subsidiary regulations, particularly the WDR.

Under Section 16 of the WDO, a person shall not use, or permit to be used, any land or premises for the disposal of waste unless he has a licence from the Director of Environmental Protection Department. The waste disposal licence is renewable and once a licence is granted, under Section 22 of the WDO, the collection or removal of chemical waste and the use of land or premises for the disposal of waste shall be authorized. Chemical waste is defined under Sections 2 and 3 of the WDR, ‘‘chemical waste’’ means any substance or thing being (a) scrap material, (b) effluent, or (c) an unwanted substance arising from any process or trade activity, and any substance or chemical specified in Schedule 1 if such substance or chemical occurs in such form so as to cause pollution or constitute a danger to health or risk of pollution to the environment. Schedule 1 specifies a list of chemicals which would be regarded as chemical waste. Under Section 18 of the WDO, any person who commits an offence under Section 16 is liable for the first offence, to a fine of HK$200,000 and to imprisonment for six months; for a second or subsequent offence, to a fine of HK$500,000 and to imprisonment for six months; and to a fine of HK$10,000 each day if the offence continues.

Under Regulation 6 of the WDR, producers of chemical waste must be registered with the Director of Environmental Protection Department. Under Regulation 8, a producer of chemical waste must dispose of chemical waste at a reception point or at such site or premises with an appropriate waste disposal licence. Any person who contravenes Regulations 6 and 8 commits an offence and is liable on conviction to a fine of HK$200,000 and imprisonment for six months. Under Regulation 38, if the offence is continuing, there will be an additional fine of HK$10,000 for each day on which the offence continues.

Our Directors confirmed that the only chemical waste produced in the course of our business operations is sodium hydroxide solution with a concentration of less than 1% sodium hydroxide by weight. Such waste does not fall within the definition of ‘‘chemical waste’’ stipulated in the WDR. Therefore, we are not required to obtain a waste disposal licence prior to the discharge of waste under the WDO and WDR.

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Guidelines to the Trade on Reducing Level of Ethyl Carbamate (EC) in Alcoholic Beverages during Storage and Transport (the ‘‘Guidelines on Reducing EC’’)

The Guidelines on Reducing EC provide non-binding recommendations to help minimize the level of EC in alcoholic beverages during storage and transportation. Under the Guidelines on Reducing EC, importers of wines/distilled spirits should adopt measures which includes obtaining products form reliable suppliers, and considering importing products that meet the relevant EC standards of the exporting countries, if applicable; taking measures to prevent products from light exposure from production through shipment to storage and retail; taking special care to minimize heat exposure by maintaining the correct cold chain from production through shipment to storage and retail; and keeping stock according to the first-in-first-out principle.

Recent Development on the Producer Responsibility Scheme on Plastic Beverage Containers

The Product Eco-responsibility Ordinance (Chapter 603 of the Laws of Hong Kong) (the ‘‘PEO’’) provides the shared core elements of all producer responsibility schemes and the fundamental regulatory requirements in respect of individual types of products. As of the Latest Practicable Date, the PEO only covered plastic bags and electrical equipment and did not cover plastic beverage containers.

On February 22, 2021, the government of Hong Kong launched a three-month public consultation on the introduction of a producer responsibility scheme on plastic beverage containers. The proposed scheme includes mandatory requirements, amongst other matters, for certain retailers selling beverages carried in plastic containers to provide take-back and rebate redemption services, and also for beverage manufacturers and importers to be registered and pay recycling levy based on amount of plastic-bottled beverage products distributed on time. Based on the preliminary estimates of the Hong Kong government, the recycling levy will be around 50–65 Hong Kong cents per 500 mL container. The consultation ended on May 21, 2021 and the government of Hong Kong will further map out the regulatory framework and way forward for the proposed scheme.

Laws and Regulations Relating to Dutiable Commodities and Sale of Goods

Dutiable Commodities Ordinance (Chapter 109 of the Laws of Hong Kong) (the ‘‘DCO’’) and Dutiable Commodities Regulations (Chapter 109A of the Laws of Hong Kong) (the ‘‘DCR’’)

The DCO governs the control of liquors and provides for the licensing of certain dealings in liquors. As specified in Section 3, the DCO applies to alcoholic liquors.

Under Section 17, an import and export licence is required to import or export alcohol and a permit is required to remove, deliver or send out alcohol. Section 17 of the DCO sets out certain restrictions on dealings with and possession of liquor. Section 17(1) prohibits any person from importing or exporting or have in his possession, custody or control, or in any way deal with or dispose of, inter alia, liquor except in accordance with the provisions of the DCO or unless he has discharged all the obligations with respect other goods imposed upon him by or under the DCO. Under Section 17(3), a person shall not import, inter alia, liquor except under and in accordance with a licence or an exemption from a licence. Under Section 17(3B), where regulations prohibit the sale or supply of any liquor except on the authority of a prescribed licence or permit, no person shall sell, or advertise or expose for sale, or supply, or possess for sale or supply, such liquor except on the authority of such a licence or permit. Under Section 17(5), no person shall sell, advertise, or expose for sale, or supply, or possess for sale or

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The DCR regulates the import, packaging and payment of duty concerning dutiable commodities. Regulation 67A of the DCR requires every container containing liquor imported into Hong Kong for local consumption to bear a label on which is printed the alcoholic strength, or the range of alcoholic strength, of the liquor. Importing or manufacturing liquor without this label or with a false label is an offence, rendering the importer or manufacturer liable to a fine of HK$50,000, unless the person did not know, had no reason to suspect, and could not with reasonable diligence have ascertained that the container did not bear a label or the label was false.

Sale of Goods Ordinance (Chapter 26 of the Laws of Hong Kong) (the ‘‘SOGO’’)

The SOGO governs contracts related to the sale of goods. Various terms are implied into such contracts under Sections 15 to 17. Under Sections 15 to 17, there are implied conditions that (a) where there is a contract for sale of goods by description, the goods shall correspond with the description, (b) the goods supplied are of merchantable quality, and (c) where there is a contract for sale by sample, the bulk of the goods shall correspond with the sample in quality, the buyer shall also have a reasonable opportunity of comparing the bulk with the sample and the goods shall be free from any defect which would not be apparent on reasonable examination of the sample. Otherwise, a buyer has the right to reject defective goods unless he or she has a reasonable opportunity to examine the goods. A breach of the implied terms may give rise to a civil action for breach of contract by customers. However, no criminal liability arises from a breach of the implied terms.

Trade Descriptions Ordinance (Chapter 362 of the Laws of Hong Kong) (the ‘‘TDO’’)

The TDO prohibits and regulates false, misleading or incomplete trade descriptions for goods and services. Under Section 2, a trade description (in relation to goods) (including fitness for purpose, performance and manufacturing details) which is false to a material degree or a trade description which, though not false, is misleading and likely to be taken for a trade description that is false to a material degree, is regarded as a false trade description. Under Section 6 of the TDO, a trade description is applied if a person affixes, annexes, marks or incorporates it with the goods or anything in, on or with which the goods are supplied, uses the trade description in any manner likely to be taken as referring to the goods; or makes in any affidavit, declaration or writing any statement to the effect that a trade description is applicable to the goods.

The application of or supply of goods with a false trade description is an offence under Section 7 of the TDO. The import and export of goods with a false trade description is prohibited under Section 12. The penalties for contravening Sections 7 and 12 are set out in Section 18. A person shall be subject, on conviction on indictment, to a fine of HK$500,000 and to imprisonment for five years, and on summary conviction, to a fine of HK$100,000 and to imprisonment for two years.

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Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong) (the ‘‘IRO’’)

The IRO is an ordinance enacted for the purposes of imposing taxes on property, earnings and profits in Hong Kong. The IRO provides, among other things, that profits tax shall be charged on every person carrying on a trade, profession or business in Hong Kong in respect of his or her assessable profits arising in or derived from Hong Kong, at the rate of 8.25% on any part of assessable profits up to HK$2,000,000, and that of 16.5% on any part of assessable profits over HK$2,000,000 for corporate taxpayers. The IRO also contains detailed provisions relating to, among other things, permissible deductions for outgoings and expenses, set-offs for losses and allowances for depreciations of capital assets.

Laws and Regulations Relating to Competition — Competition Ordinance (Chapter 619 of the Laws of Hong Kong) (the ‘‘CO’’)

The CO is to, amongst others, prohibit conduct that prevents, restricts or distorts competition in Hong Kong, and prohibit mergers that substantially lessen competition in Hong Kong. There are three competition rules under the CO, namely, the First Conduct Rule, the Second Conduct Rule and the Merger Rule.

The First Conduct Rule prohibits making or giving effect to agreements or decisions of associations, or engaging in concerted practices, that have as their object or effect the prevention, restriction or distortion of competition in Hong Kong. The Second Conduct Rule prohibits abuse of substantial market power if the object or effect of the conduct is to prevent, restrict or distort competition in Hong Kong. The Merger Rule prohibits mergers that have or are likely to have the effect of substantially lessening competition in Hong Kong.

Upon breach, the Competition Tribunal may impose penalties including pecuniary penalty, disqualification orders, prohibition orders, award of damages, and other orders on offenders. If a pecuniary penalty is to be imposed, the maximum amount of such pecuniary penalty imposed is 10% of the turnover of the company concerned for up to three years in which the contravention occurs.

Laws and Regulations Relating to Labor, Health and Safety

Occupational Safety and Health Ordinance (Chapter 509 of the Laws of Hong Kong) (the ‘‘OSHO’’)

The OSHO provides for the safety and health protection to employees in workplaces, both industrial and non-industrial. Employers must, as far as reasonably practicable, ensure safe and healthy conditions in their workplaces by providing and maintaining plant and work systems that do not endanger safety or health; making arrangement for ensuring safety and health in connection with the use, handling, storage or transport of plant or substances; providing all necessary information, instruction, training, and supervision for ensuring safety and health; providing and maintaining safe access to and egress from the workplaces; and providing and maintaining a safe and healthy work environment.

Factories and Industrial Undertakings Ordinance (Chapter 59 of the Laws of Hong Kong) (the ‘‘FIUO’’)

The FIUO governs the operation and regulation of factories and industrial undertakings. Under Section 6A, every proprietor of an industrial undertaking has a duty to ensure, so far as is reasonably practicable, the health and safety at work of all persons employed by him at the industrial undertaking.

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This duty includes, in particular, the provision and maintenance of plant and systems of work that are, so far as is reasonably practicable, safe and without risks to health; arrangements for ensuring, so far as is reasonably practicable, safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances; the provision of such information, instruction, training and supervision as is necessary to ensure, so far as is reasonably practicable, the health and safety at work of all persons employed by him at the industrial undertaking; so far as is reasonably practicable as regards any part of the industrial undertaking under the proprietor’s control, the maintenance of it in a condition that is safe and without risks to health and the provision and maintenance of means of access to and egress from it that are safe and without such risks; and the provision and maintenance of a working environment for all persons employed by him at the industrial undertaking that is, so far as is reasonably practicable, safe, and without risks to health. A proprietor of an industrial undertaking who contravenes Section 6A commits an offence and is liable to a fine of HK$500,000, if such proprietor contravenes wilfully and without reasonable excuse, he is liable to a fine of HK$500,000 and to imprisonment for six months.

Occupiers Liability Ordinance (Chapter 314 of the Laws of Hong Kong) (the ‘‘OLO’’)

The OLO imposes a common duty of care on an occupier of a premise to take reasonable care of the premise in all circumstances so as to ensure that his visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.

Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong) (the ‘‘MWO’’)

The current MWO provides for a prescribed minimum hourly wage rate (currently set at HK$37.5 per hour) during the wage period for every employee engaged under a contract of employment under the Employment Ordinance (Chapter 57 of the Laws of Hong Kong) (the ‘‘EO’’). Any provision of the employment contract which purports to extinguish or reduce the right, benefit or protection conferred on the employee by the MWO is void.

Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong) (the ‘‘MPFSO’’)

Under the MPFSO, the employers shall participate in a Mandatory Provident Fund (‘‘MPF’’) Scheme for employees employed under the jurisdiction of the EO. The MPF Scheme is a defined contribution retirement plan administered by independent trustees. Under the MPF Scheme, the employer and its employees are each required to make contributions to the plan at 5% of the employees’ relevant income, subject to a cap of monthly relevant income of HK$30,000. Contributions to the plan vest immediately.

Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) (the ‘‘ECO’’)

Under the ECO, all employers (including contractors and subcontractors) are required to take out insurance policies to cover their liabilities both under the ECO and at common law for injuries at work in respect of all their employees (comprising full-time and part-time employees).

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HISTORY AND DEVELOPMENT OF OUR GROUP

Our history can be traced back to 1982 when our founding members, Mr. C. Y. Fong (who is also a Controlling Shareholder) and his sister, Ms. FONG Lai Lai (方麗麗), established Telford International as a distributor of beverages to meet the growing demand for beverage products in Hong Kong.

Through the operation and development of our Group of nearly 40 years, our business expanded from being a local distributor to becoming a leading beverage company in Hong Kong and China. Under the leadership of Mr. Kenneth Fong, our chairman, chief executive officer, executive Director and Controlling Shareholder, and Ms. Lucia Fong, our vice chairlady, chief financial officer, executive Director and Controlling Shareholder, we expanded our distribution network into China in 2002 when Telford Shenzhen was established, and soon after we set up our mainland headquarter in Shanghai in 2007 when Telford Wine & Spirits (S) was established, and a branch in Beijing in 2008. With the joining of Mr. Vincent Fong, our vice chairman, chief executive officer (China), executive Director and Controlling Shareholder in March 2009, our business in China had rapidly developed and had even surpassed our revenue generated from Hong Kong in 2020 by contributing to approximately 53.1% of our total revenue for the year. For further information on the background of and relationship between our executive Directors and our Controlling Shareholders, see ‘‘Directors and Senior Management’’ and ‘‘Relationship with Our Controlling Shareholders.’’

We have also developed our own In-house Brands for sale in the market. We were the first to market Tao Ti natural-brew ready-to-drink beverages in Hong Kong in 1996. Through our effort and expertise, the Tao Ti brand became a popular natural tea brand in Hong Kong. Leveraging on our success in building the Tao Ti brand, we started to market products under the brand Meko since 1998 to offer soft beverages in addition to tea beverages.

In addition to offering products for sale, we also developed our own brand building, in-house product R&D, and in-house production capability. We have been appointed as the exclusive bottler of a global carbonated soft drinks company since 2013 to produce postmix in our production site in Yuen Long, Hong Kong, which commenced operation in the same year.

We have grown from distributing a handful of brands of beverage products in Hong Kong to becoming a leading beverage company in Hong Kong and China offering over 100 brands of international spirits and wines and natural, healthy and functional beverages with a unique mix of In- house Brands as well as Third-party Brands as of the Latest Practicable Date.

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Key Milestones of Our Group

The following table sets forth the major milestones of our Group’s development:

Year Event

1982 . Telford International was established

1996 . We first marketed Tao Ti natural-brew ready-to-drink beverages

1997 . Commenced operation of Fong’s Logistics

1998 . We first marketed Meko beverages

2002 . Telford Shenzhen was established

2003 . Commenced business relationship with Brown-Forman Hong Kong Limited, the current brand owner of Jack Daniel’s, Woodford Reserve, Finlandia and GlenDronach, in Hong Kong

2004 . Commenced business relationship with Casella Wines Pty Ltd, the brand owner of Yellowtail, in Hong Kong

2006 . Telford Wine & Spirits (C) was established

. Commenced business relationship with Mast-Jägermeister SE, the current brand owner of Jägermeister, in Hong Kong and Macau

2007 . Telford Wine & Spirits (S) was established in Shanghai as our PRC headquarters

. Commenced business relationship with Whyte & Mackay Limited, the current brand owner of Claymore and Dalmore, in Hong Kong and Macau

2008 . Commenced business relationship with a conglomerate owning an established brand of cranberries juice and cranberries related products, in Hong Kong and Macau

. Commenced business relationship with Red Bull Asia FZE, the current brand owner of Red Bull, in Hong Kong and Macau

2009 . Telford Macau was established and we invested into 25% of its capital

. Commenced business relationship with Casella Wines Pty Ltd, the current brand owner of Yellowtail, in the PRC

2011 . Commenced business relationship with Boonrawd Trading International Co., Ltd., the current brand owner of Singha Beer, in Hong Kong and Macau

. Commenced business relationship with Whyte & Mackay Limited, the current brand owner of Claymore and Dalmore, in the PRC

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Year Event

2013 . Appointed as exclusive bottler of and commenced business relationship with a global carbonated soft drinks company in Hong Kong and Macau

. Commenced operation of our production site in Yuen Long, Hong Kong

2014 . Commenced business relationship with William Grant & Sons Brands Limited, the current brand owner of Balvenie and Glenfiddich, in Hong Kong

2015 . Commenced business relationship with Jägermeister in the PRC

2016 . Commenced business relationship with a renowned Japanese beer brand owner in Hong Kong and Macau

. Commenced business relationship with Kitagawa Hanbei Tea Mfg, Co., the current brand owner of Kitagawahanbee Syouten, in Hong Kong and Macau

2017 . Commenced business relationship with Gekkeikan Sake Company Ltd., the current brand owner of Gekkeikan Sake and Gekkeikan Liqueur, in Hong Kong and Macau

. Commenced business relationship with Matsui Shuzo An Unlimited Partnership, the current brand owner of Kurayoshi, in Hong Kong and the PRC

2018 . Commenced business relationship with Oatly Hong Kong Holding Limited, the current brand owner of Oatly, in Hong Kong and Macau

. Commenced business relationship with Tradall S.A., the current brand owner of Grey Goose, Bombay Sapphire, Bacardi and Dewar’s, in Hong Kong and Macau

2021 . Commenced business relationship with a conglomerate owning a well-known British tea brand, and an established brand of malted nutritional drinks in Hong Kong and Macau

. Commenced business relationship with an Italian brand specializing in the spirits industry globally, for the distribution, marketing and sale of its brands in the PRC

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OUR CORPORATE HISTORY

Telford International

Telford International was established on June 4, 1982 in Hong Kong under its former name Telford International Marketing Limited (匯泉國際有限公司) with a share capital of HK$2.00 by Mr. C. Y. Fong and Ms. FONG Lai Lai, each holding 50% of the then issued shares. On July 27, 1982, Telford International increased its share capital to HK$500,000.00 comprising 500,000 shares of HK$1.00 each with Mr. C. Y. Fong and Ms. FONG Lai Lai holding 50% each.

On August 16, 1989, Ms. FONG Lai Lai transferred all her shares in Telford International to Ms. Kay for cash at par. On December 1, 1999, Mr. C. Y. Fong and Ms. Kay each transferred their shares in Telford International to Eminent Dragon and Eminent Leader respectively for cash at par.

On April 26, 2000, Telford International changed its name to its current name Telford International Company Limited (匯泉國際有限公司).

On April 23, 2003, Eminent Leader transferred 249,999 shares and one share in Telford International respectively for nil consideration to Eminent Dragon and Mr. C. Y. Fong (as nominee for Eminent Dragon) and Telford International became 100% beneficially owned by Eminent Dragon. On June 11, 2021, Mr. C. Y. Fong transferred his legal title in the one share in Telford International to Eminent Dragon for nil consideration, and the trust arrangement was canceled on the same day.

Fong’sLogistics

Fong’s Logistics (formerly known as Kai Hung Limited and Fong’s International (Hong Kong) Limited) was established as a shelf company on February 13, 1992 and the two initial subscribers of the company transferred each of their shares to Mr. Kenneth Fong and Mr. FANG Yung Hui (方永惠)(‘‘Mr. Fang’’), respectively on June 10, 1992. On July 14, 1992, Fong’s Logistics changed its name to Fong’s International (Hong Kong) Limited (方氏國際(香港)有限公司).

On July 16, 1992, Fong’s Logistics allotted and issued 5,499 shares and 3,499 shares to Mr. Kenneth Fong and Mr. Fang respectively, thereby increasing the share capital of the company to HK$9,000.00 with 9,000 shares. On May 19, 1994, Mr. Fang transferred all his 3,500 shares in Fong’s Logistics to Ms. Lucia Fong for cash at par. On June 21, 1996, Mr. Kenneth Fong and Ms. Lucia Fong transferred 5,500 shares and 3,499 shares in Fong’s Logistics to Telford International respectively for cash at par.

On August 2, 1996, Ms. Lucia Fong transferred one share in Fong’s Logistics to Ms. Kay for cash at par and Telford International transferred 4,500 shares and 4,449 shares to Mr. C. Y. Fong and Ms. Kay respectively for cash at par. On December 1, 1999, Mr. C. Y. Fong and Ms. Kay transferred all their shares in Fong’s Logistics to Eminent Dragon and Eminent Leader respectively for cash at par.

On February 16, 2000, Fong’s Logistics changed its name to its current name Fong’s Logistics Limited (方氏物流有限公司).

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On April 23, 2003, Eminent Leader transferred 4,499 shares and one share in Fong’s Logistics respectively to Eminent Dragon and Mr. C. Y. Fong (as nominee for Eminent Dragon) for nil consideration and Fong’s Logistics became 100% beneficially owned by Eminent Dragon. On June 11, 2021, Mr. C. Y. Fong transferred his legal title in the one share in Fong’s Logistics to Eminent Dragon for nil consideration, and the trust arrangement was canceled on the same day.

Telford Shenzhen

Telford Shenzhen was established on January 7, 2002 in the PRC under its former name 深圳市匯泉貿易有限公司 with a registered capital of RMB500,000.00, which was owned as to 79% by Ms. FANG Yan Juan (方燕娟) (a niece to Mr. C. Y. Fong and a cousin to Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong) and 21% by Mr. QIAN Li Qi (錢立琦), an Independent Third Party, respectively. On April 7, 2006, Telford Shenzhen changed its name to its current name 深圳匯泉貿易有限公司.

On April 7, 2006, Ms. FANG Yan Juan and Mr. QIAN Li Qi transferred all of their respective equity interest in Telford Shenzhen to Telford (China) for an aggregate consideration of HK$500,000.00, and Telford Shenzhen became wholly-owned by Telford (China). On July 26, 2006, the applicable currency of the registered capital of Telford Shenzhen was changed from RMB to HK$ and its registered capital was increased to HK$1,000,000.00. The additional registered capital was fully contributed by Telford (China).

On September 25, 2010 and January 4, 2015, Telford Shenzhen increased its registered capital to HK$2,000,000.00 and HK$13,000,000.00, respectively. The additional registered capital was fully contributed by Telford (China). As of the Latest Practicable Date, the registered capital of Telford Shenzhen had been fully paid up.

Wing Tai

Wing Tai was established as a shelf company on December 20, 2002 in Hong Kong and the two initial subscribers transferred each of their one share in Wing Tai to Eminent Leader and Mr. C. Y. Fong respectively on January 17, 2003 for HK$1.00 each.

On January 28, 2016, Eminent Leader and Mr. C. Y. Fong transferred all their shares in Wing Tai to Eminent Dragon for HK$1.00 each, and Eminent Dragon became the sole shareholder of Wing Tai.

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Telford Wine & Spirits (S)

Telford Wine & Spirits (S) was established on May 24, 2007 in the PRC under its former name 卉泉(上海)洋酒貿易有限公司 with a registered capital of US$1,000,000.00 fully contributed by Telford Wine & Spirits (C). On January 21, 2008 Telford Wine & Spirits (S) established a branch in Beijing, the PRC. On March 30, 2009, Telford Wine & Spirits (S) established a branch in Shanghai, which had been deregistered on February 28, 2013.

On May 7, 2008, Telford Wine & Spirit (S) increased its registered capital to US$1,400,000.00, and the additional registered capital was fully contributed by Telford Wine & Spirits (C). On November 3, 2008, Telford Wine & Spirits (S) changed its name to its current name 匯泉(上海)洋酒貿易有限公司. As of the Latest Practicable Date, the registered capital of Telford Wine & Spirits (S) had been fully paid up.

Telford Industries

Telford Industries (formerly known as Winberg Industries Limited) was established as a shelf company on May 22, 2008 and the initial subscriber transferred its sole share to Mr. C. Y. Fong on June 19, 2008 for HK$1.00. On June 20, 2008, Telford Industries allotted and issued 99 shares to Eminent Leader for HK$99.00.

On January 18, 2016, Eminent Leader and Mr. C. Y. Fong transferred all their shares to Eminent Dragon for cash at par, and Eminent Dragon became the sole shareholder of Telford Industries.

Our Company

Our Company was incorporated in the Cayman Islands under the Companies Act as an exempted company with limited liability on March 30, 2021 and became the holding company and [REDACTED] vehicle of our Group upon completion of the Reorganization. For further details, see ‘‘— Reorganization.’’

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OUR MAJOR SUBSIDIARIES AND OPERATING ENTITIES

The principal business activities and the dates of the incorporation of the major subsidiaries of our Group that made a material contribution to our results during the Track Record Period are shown below:

Name of Place of Date of Registered/Issued company incorporation incorporation share capital Principal business activities

Telford Hong Kong June 4, HK$500,000 with sale of international spirits International 1982 500,000 shares and wines and soft beverages

Fong’s Logistics Hong Kong February 13, HK$9,000 with provision of logistics services 1992 9,000 shares

Telford Shenzhen PRC January 7, HK$13,000,000 sale of international spirits 2002 and wines and soft beverages

Wing Tai Hong Kong December 20, HK$2 with sale of alcoholic and soft 2002 2shares beverages and other products

Telford Wine & PRC May 24, US$1,400,000 sale of international spirits Spirits (S) 2007 and wines and soft beverages

Telford Industries Hong Kong May 22, HK$100 with production of postmix 2008 100 shares products

MAJOR ACQUISITIONS, DISPOSALS AND MERGERS

On June 11, 2021, Telford Enterprise (as assignor) and Telford Beverage Brands (as assignee) entered into two deeds of assignment of trademarks. Pursuant to the deeds of assignment of trademarks, Telford Enterprise assigned, respectively, (i) all of its right, title and interest in relation to 61 Tao Ti trademarks registered or being applied for registration in Hong Kong, the PRC and other jurisdictions, together with the goodwill; and (ii) all of its right, title and interest in relation to 25 Meko trademarks registered in Hong Kong, the PRC and other jurisdictions, together with the goodwill, to Telford Beverage Brands for a respective consideration of HK$212,500,000 and HK$17,500,000. Such considerations were determined with reference to the fair value of the trademarks as of December 31, 2020 according to a valuation conducted by an Independent Third Party valuer, which will be financed by our internal resources and fully settled prior to the [REDACTED]. As of the Latest Practicable Date, we were in the process of completing the relevant registration procedures of the assignment of trademarks.

Save as disclosed in this section, we did not conduct any other major business acquisitions, disposals or mergers during the Track Record Period and up to the Latest Practicable Date.

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REORGANIZATION

In anticipation of our [REDACTED], we underwent the Reorganization pursuant to which our Company became the holding company and [REDACTED] vehicle of our Group. No companies/ businesses which are in the same or ancillary businesses as our Group have been excluded from our Group as part of the Reorganization.

Corporate Chart Immediately before the Reorganization

The following chart sets out the shareholding and corporate structure of our Group immediately before the Reorganization.

Ms. Lucia Mr. Kenneth Ms. Emily Mr. Vincent Mr. C.Y. Fong Fong Fong Fong Fong 99.96% 0.01% 0.01% 0.01% 0.01%

Eminent Leader (BVI) 100% Eminent Dragon (BVI)

100% 100% 100% 100% 100% 100% Telford Fong’s Telford Telford Migo Wing Tai International(1) Logistics(2) Industries (China) (HK) (HK) (HK) (HK) (HK) (HK)

25% 100% 100% Telford Telford Telford Wine Macau(3) Shenzhen & Spirits (C) (Macau) (PRC) (HK) 100% Telford Wine & Spirits (S) (PRC)

(1) One ordinary share in Telford International was held by Mr. C. Y. Fong on trust for the benefit of Eminent Dragon.

(2) One ordinary share in Fong’s Logistics was held by Mr. C. Y. Fong on trust for the benefit of Eminent Dragon.

(3) We have a 25% investment interest in Telford Macau and therefore it is our associated company. The remaining 75% equity interest in Telford Macau is held by Ms. Carolina Sam, an Independent Third Party. Telford Macau is engaged in the business of wholesale and distribution of spirits, wines, beers, sakes and soft beverages in Macau. Telford Macau is our customer which distributes both our In-house Brands and Third-party Brand Products in Macau. As Telford Macau is an associated company of our Company and the remaining interest therein is held by an Independent Third Party, transactions between our Group and Telford Macau are not regarded as connected transactions under the Listing Rules.

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The Reorganization involved the following steps:

1. Disposal of Migo

On January 26, 2021, our Group disposed of Migo to Eminent Leader for the consideration of HK$2.0 in order to streamline our operations. The consideration was determined with reference to the paid-up share capital of Migo as of the date of the disposal. Immediately prior to the disposal, Migo was principally engaged in the leasing of vending machines for the sale of beverage products. As of the Latest Practicable Date, Migo did not carry on any business.

2. Incorporation of Our Company

Our Company was incorporated in the Cayman Islands on March 30, 2021. Upon our incorporation, our Company has an authorized share capital of HK$380,000 divided into 38,000,000 Shares and one nil-paid initial Share (the ‘‘Subscriber Share’’) was allotted and issued to the nominee of Conyers Trust Company (Cayman) Limited. On the same day, the Subscriber Share was transferred to Eminent Leader. As a result, our Company became a wholly- owned subsidiary of Eminent Leader. Our Company was registered as a non-Hong Kong company under Part 16 of the Companies Ordinance on May 21, 2021.

3. Cancelation of the Trust Arrangements

Mr.C.Y.FongheldoneshareineachofTelfordInternationalandFong’s Logistics on trust for the benefit of Eminent Dragon. On June 11, 2021, Mr. C. Y. Fong transferred his legal title in the said shares to Eminent Dragon for nil consideration, and the trust arrangements have been canceled on the same day. Such trust arrangements were put in place to satisfy the then requirement that a Hong Kong incorporated company must have at least two members under the former Companies Ordinance (Chapter 32 of the Laws of Hong Kong), which was in force in April 2003.

4. Share Swap Between Eminent Leader and Our Company

On June 21, 2021, Eminent Leader and our Company entered into a sale and purchase agreement, pursuant to which Eminent Leader agreed to transfer its entire shareholding interest in Eminent Dragon to our Company. The consideration is settled by our Company allotting and issuing nine Shares to Eminent Leader credited as fully paid and crediting as fully paid the Subscriber Share. The transfer and issue of shares were completed on thesameday,asaresultof which our Company became the holding company of our Group.

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5. Increase of the authorized share capital of Our Company

On [.], our Company increased our authorized share capital from HK$380,000 divided into 38,000,000 Shares to HK$[REDACTED] comprising [REDACTED] Shares by the creation of an additional [REDACTED] Shares which rank pari passu in all respects with the existing Shares.

Our Directors have been advised by our Hong Kong, PRC, Cayman Islands and BVI legal advisors that (i) each of the Reorganization steps is properly and legally completed and settled under the applicable laws and regulations, and (ii) the Reorganization does not require any regulatory approval. Further, as advised by our PRC Legal Advisor, the Circular 37 of the SAFE on Issues Concerning Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicle《 ( 國家外匯管理局關於境內居民通過特殊目的公司境外投融資及返程投資外匯管理有關問題的通知》) is not applicable to any step of the Reorganization.

Subsequent to the completion of the Reorganization, in June 2021, our Company declared a conditional special interim dividend to our then sole Shareholder, Eminent Leader, in the amount of HK$929.0 million in respect of our retained earnings for the period up to June 30, 2021. For further details, see ‘‘Financial Information — Dividend and Dividend Policy.’’

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Corporate Chart Immediately after the Reorganization

The following chart sets out the shareholding and corporate structure of our Group immediately after the Reorganization but before the completion of the [REDACTED] and the [REDACTED] and without taking into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme.

Ms. Lucia Mr. Kenneth Ms. Emily Mr. Vincent Mr. C.Y. Fong Fong Fong Fong Fong 99.96% 0.01% 0.01% 0.01% 0.01%

Eminent Leader (BVI) 100% Our Company (Cayman Islands) 100% Eminent Dragon (BVI)

100% 100% 100% 100% 100% 100% 100% Telford Telford Telford Fong’s Telford Telford Wing Tai Beverage Spirits International Logistics Industries (China) (HK) Brands(2) Brands(3) (HK) (HK) (HK) (HK) (HK) (HK)

25%100% 100% Telford Telford Telford Wine Macau Shenzhen & Spirits (C) (Macau) (PRC) (HK) 100% Telford Wine & Spirits (S) (PRC) 100% Xihai (Shanghai)(1) (PRC)

(1) Xihai (Shanghai) was established in the PRC on January 29, 2021. See ‘‘Appendix IV — Statutory and General Information — A. Further Information About Our Company — 3. Changes in the Share Capital of Our Subsidiaries’’ for further details.

(2) Telford Beverage Brands was incorporated in Hong Kong on May 13, 2021. See ‘‘Appendix IV — Statutory and General Information — A. Further Information About Our Company — 3. Changes in the Share Capital of Our Subsidiaries’’ for further details.

(3) Telford Spirits Brands was incorporated in Hong Kong on May 13, 2021. See ‘‘Appendix IV — Statutory and General Information — A. Further Information About Our Company — 3. Changes in the Share Capital of Our Subsidiaries’’ for further details.

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THE[REDACTED]ANDTHE[REDACTED]

[REDACTED]

CORPORATEANDSHAREHOLDINGSTRUCTURE

The following chart illustrates our corporate and shareholding structure immediately after the completion of the [REDACTED] and the [REDACTED] (without taking into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme).

Ms. Lucia Mr. Kenneth Ms. Emily Mr. Vincent Mr. C.Y. Fong Fong Fong Fong Fong 99.96% 0.01% 0.01% 0.01% 0.01%

Eminent Leader (BVI) Public [REDACTED]% Our Company [REDACTED] % (Cayman Islands) 100% Eminent Dragon (BVI)

100% 100% 100% 100% 100% 100% 100% Telford Telford Telford Fong’s Telford Telford Wing Tai Beverage Spirits International Logistics Industries (China) (HK) Brands Brands (HK) (HK) (HK) (HK) (HK) (HK)

25% 100% 100% Telford Telford Telford Wine Macau Shenzhen & Spirits (C) (Macau) (PRC) (HK) 100% Telford Wine & Spirits (S) (PRC) 100% Xihai (Shanghai) (PRC)

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OVERVIEW

We sell In-house Brand Products under our In-house Brands, primarily Tao Ti and Meko, as well as well-recognized international Third-party Brand Products through our sales network in Hong Kong and China. Our product portfolio covers a broad range of products ranging from international spirits and wines, natural, healthy and functional beverages, to other consumer drinks and food.

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O S N N E - O S T T I O P L U S S O A L E S I N G F A N D M A R K E T un N ct at io ura na l, H l l S ea ona es of lthy nati in t B and Inter d W ever s an ages Spirit

During the Track Record Period, our revenue grew from HK$1,355.5 million to HK$1,857.6 million at a CAGR of 17.1%, and our gross profit grew from HK$458.3 million to HK$618.1 million at a CAGR of 16.1% from 2018 to 2020.

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COMPETITIVE STRENGTHS

We are a leading beverage company in Hong Kong and China with vertically integrated platform capabilities to achieve sustainable growth and profitability

We are a leading beverage company in Hong Kong and China. We ranked 2nd in the natural, healthy and functional soft beverage market in Hong Kong, and 3rd and 4th in import international spirits market in Hong Kong and China, respectively, by retail sales value in 2020, according to the F&S Report. Among the top five market players in China’s import international spirits market in 2020, we were the only independent player that is capable of selecting and offering multiple brands and products to meet market demand and trends without being limited or affiliated to any specific brand and product portfolio owned or operated by a single beverage group.

We have end-to-end platform capabilities covering research and development, raw material sourcing, production management, brand building, sales and marketing, and distribution and logistics for both In-house Brands and Third-party Brands and products. Such platform capabilities enable us to meet market demands and achieve continuous growth and profitability during the Track Record Period. We believe these core platform capabilities differentiate us from other market players.

Our integrated platform capabilities enable us to enhance our operational efficiency and profitability for our In-house Brand Products, and to offer our international Third-party Brand Partners an integrated sales and marketing solution optimized for the Hong Kong and China market to promote their brand awareness and sales. We connect the brands, suppliers, wholesalers and retailers, share our expertise and experiences leveraging our platform capabilities at each process and to orchestrate the efforts from the market participants to maximize our sales and marketing efficiency along the value chain.

We focus on natural, healthy and functional beverages and international spirits and wines in China. According to the F&S Report, the retail sales value of the natural, healthy and functional soft beverage market in China amounted to approximately RMB539.1 billion in 2020, representing 62.6% of the total retail sales value of the soft beverage market. According to same source, in terms of retail sales value, the natural, healthy and functional soft beverages market is projected to grow at a CAGR of 7.2% between 2020 and 2025, reaching RMB762.9 billion in 2025. Particularly, retail sales value of natural, healthy and functional packaged RTD soft beverages featuring low-calorie and low-sugar is expected to grow significantly faster at a CAGR of 18.6% between 2020 and 2025. According to the F&S Report, in terms of retail sales value, the import international spirits and wines market in China is projected to grow at a CAGR of 10.4% between 2020 and 2025, reaching RMB164.9 billion in 2025, which is expected to significantly outperform the growth rate of the overall alcoholic beverage market in China at a CAGR of 3.9% between 2020 and 2025.

We are well-positioned to benefit from the high growth of the natural, healthy and functional soft beverage market and import international spirits and wines market in China. We have a wide range of ready-to-drink natural, healthy and functional beverages, such as sugar-free and low-calorie natural green tea, functional diet tea, and natural flavored fruit-based beverages. We also offer international spirits, wines and other alcohol products from our Third-party Brand Partners, primarily targeting the consumer groups with increasing purchase power and more willingness to navigate more wine culture and diversified drinking style in China for both in-home and out-of-home consumption.

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We have successfully developed one of the largest natural tea beverage brands ‘‘Tao Ti’’ in Hong Kong and we have one of the largest natural, healthy and functional beverage brand portfolio in Hong Kong

We were the first to market Tao Ti natural-brew ready-to-drink beverages in Hong Kong in 1996, which became one of the most popular natural tea brands in Hong Kong.

We are a pioneer in introducing ready-to-drink tea beverages which are mainly made of 100% natural ingredients and offer healthy and fresh tastes to consumers. We continued to innovate and introduce new tea series featuring additional healthy elements, such as sugar free, detoxification and antioxidant. We successfully developed and expanded our product portfolio, and have one of the largest natural, healthy and functional beverages portfolios in Hong Kong. As of December 31, 2020, we had over 144 SKUs with different tastes and functional features, including the following main series:

. Tao Ti Tea Series (茶品系列): this is our best-selling series. It is produced with 100% natural tea leaves as its main ingredient, with low sugar honey or fruit juice.

. Tao Ti Supreme Tea Series (極品系列): this series addresses increasing demands for healthy drinking by consumers. It mainly uses carefully selected 100% natural ingredients and traditional brewing techniques to give its distinct freshness and natural sugar free taste. It also contains dietary fiber in its Supreme Tea products for detoxification and antioxidant functions.

. Tao Ti Pak Gor Yuen Series (百果園系列): It is made with natural fruit juice and different seasonal flavors. Our mandarin lemon juice was inspired by a distinctive and popular Hong Kong-style signature drink and became very popular as soon as it was launched.

We differentiate ourselves and strive to continuously offer the fresh and high quality natural, healthy and functional beverages to consumers starting from the source of ingredients, proprietary product formula and production method to packaging designs with an aim to maintain the most original natural flavors and freshness at consumption. We have beverage specialists who work with tea farms on tea leaves selection and blending, and design of our proprietary beverage formulas optimized for production and consumer needs. We have a joint task force consisting of our management team, marketing personnel and beverage specialists who develop new products that meet the consumer trends for healthy soft beverages with natural ingredients and fresh tastes. We adopted an end-to-end production management system together with our long-term suppliers and production partners to ensure product safety and consumer satisfaction.

We highly value ‘‘green and healthy,’’ which is our underlying brand philosophy. We implemented various marketing campaigns together with celebrities who we believe share the same philosophy with us to promote our In-house Brands and products. We selectively partner with those celebrities and artists we believe whose healthy and energetic images perfectly fit in with our healthy product profile. We have effective and targeted online-offline engagements with consumers of different social and age groups through social media, KOLs, event sponsorships and charities. We also established a ‘‘Tao Ti Green Holiday’’ program to organize tours for our consumers to visit tea farms and other natural sights that resonate with our brand philosophy.

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We have achieved significant revenue growth through our exclusive partnerships with leading international spirits and wines brands, offering them localized and bespoke sales and marketing solutions in China

Our revenue from sales of international spirits and wines grew significantly from HK$669.1 million to HK$1,216.7 million between 2018 and 2020 at a CAGR of 34.8% amidst the COVID-19 outbreak since the end of 2019. Leveraging our extensive experience in international spirits and wines, and knowledge of China’s consumer market, we partner with international spirits and wines brands on an exclusive basis and offer them end-to-end sales and marketing solutions to penetrate China’sconsumer market. Our bespoke end-to-end sales and marketing solutions are tailored to the brand images and identities, and connect the brands with the consumers through our services throughout the process of brand positioning, consumer targeting, online and offline marketing, sales channel management, and distribution and logistics.

We work closely with our international spirits and wines brand partners to formulate their respective product debut or market expansion plan. We advise them on the right product mix that fits the culture, consumption behavior and market trends in China and formulate bespoke marketing strategies to educate consumers about the brand and product history, such as recommending pairing and mixing with food and other drinks based on our in-house research and house-blend recipe. We regularly conduct in- house pairing and mixing seminars, capitalizing on the vast product portfolio we carry, and create our house-blend recipe. As part of our marketing campaign, we promote various campaigns evolving around the concept of fun mix and match and create cross-selling effect across our product portfolio.

We have a strong and deep-rooted online and offline sales and distribution network. Through tasting and experience sharing events, and on-trade and off-trade promotions in our sales network according to different product features and respective targeted consumers and consumption scenarios, we are able to closely connect to the consumers and the market and obtain first-hand and most relevant market insight.

We have made significant efforts to strengthen our partnership with brands and expand our solution capabilities to enhance sales performance. For example, between 2018 and 2020, sales of Jägermeister, one of our key Third-party Brands, increased at a CAGR of 113.1%.

We differentiate ourselves by having the ability to proactively select our brand partners and optimize our spirits and wines portfolio to best suit our strategies and consumer trends in China and formulate bespoke sales and marketing strategies and solutions jointly with the brand partners, and maximize our sales and marketing efficiency through cross-selling our brand and product portfolio in our nationwide sales network. As a result, we have been able to maintain our profit margins and achieve high growth at the same time.

We have established a nationwide sales network that deeply penetrates on-trade, off-trade and online channels supported by a comprehensive management system for optimized efficiency

We have established a comprehensive sales network in Hong Kong and China with a geographical focus on regions with higher disposable income and demand for international spirits and wines. Our natural, healthy and functional beverages are positioned for the premium mass market. We have an extensive customer base in Hong Kong, covering 3,293 on-trade customers and 2,343 off-trade

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Our direct selling capability is one of our core assets. We have built our own direct sales force to develop and manage our key on-trade, off-trade and online customers with higher economic and strategic values. We have direct access to these customers and provide them with responsive and tailored service to enable synergies from cross selling and marketing of different brands and products in our portfolio. We have an extensive sales and distribution network in China with 80 regional wholesalers and 139 dealers to extend our geographic coverage of, and deepen our penetration into, on-trade and off-trade customers across the country. Particularly, we rely on these regional wholesalers and dealers to better service our on-trade and off-trade customers. In 2020, our offline sales amounted to HK$1,734.7 million which represented 93.4% of our total revenue, of which 49.4% and 44.0% of our total revenue were achieved through our direct sales and wholesalers, respectively.

We have been actively developing our online sales network to cover major e-commerce platforms and other online retailers, particularly specialty retailers in spirits and wines, through our direct sales and wholesalers under our direct management for effectiveness and efficiency. We grew our online sales substantially from 5.7% in 2018 to 6.6% in 2020 of our total revenue.

We have established a comprehensive and digitalized management system for our sales network management, product ordering and tracking, sales performance monitoring, sales and shipment reporting, inventory management, purchasing and financing functions. Key business process checkpoints will have to be carried out through our system for better control and improved efficiency. Our comprehensive data system helps us to monitor our business operations on a timely basis, enables us to obtain sufficient information for market analysis and facilitates sales promotion. In 2021, we launched our proprietary application ‘‘Full House’’ designed for our on-trade customers in China to enhance customer interaction and promote our sales. Registered on-trade customers can easily access our promotional events, product launch information and credit reward program. Our digitalized management system enables us to manage our sales, marketing and distribution functions efficiently and facilitates our online and offline sales management efforts through data analytics.

We have a unique brand and product portfolio covering high-growth beverage categories and are well positioned to capture the fast-growing consumer market trends in China

Our international spirits and wines and natural, healthy and functional beverages segments represented 65.5% and 23.6% of our total revenue in 2020, respectively. Our in-house flagship brands of Tao Ti and Meko, together with our comprehensive brand portfolio consisting of some widely recognized international brands with long history of success such as Jägermeister and Dalmore, and some other popular brands such as Matsui and Red Bull in the Japanese whisky and energy drink categories, give us a unique competitive advantage to capture the high growth from consumer trends in China.

According to the F&S Report, in terms of retail sales value, the natural, healthy and functional soft beverages market in China is projected to grow at a CAGR of 7.2% between 2020 and 2025, reaching RMB762.9 billion in 2025. Particularly, retail sales value of natural, healthy and functional packaged RTD soft beverages featuring low-calorie and low-sugar is expected to grow significantly faster at a CAGR of 18.6% between 2020 and 2025. According to the F&S Report, in terms of retail sales value,

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Consumers in China are increasingly more receptive to international spirits and wines under a more diversified dining and drinking culture and different consumption scenarios. The versatility of international spirits and different pairing and mixing of drinks are becoming increasingly popular among consumers in casual occasions. Furthermore, as consumers are more conscious for health and fitness, sugar-free, low-calorie, natural and healthy soft beverages of different flavors have been a prominent trend in the beverage market. In addition, the increasing per capita disposable income of urban households in China stimulates consumption upgrade in China. Against this backdrop, we are well-positioned to capture these growth opportunities as we have been focusing on these markets and offer a diversified product portfolio that perfectly falls within these categories.

We are well-positioned to further enhance our brand and product portfolio in high-growth beverage categories, leveraging on our well-established platform capabilities in China and to significantly benefit from these long-term market trends.

We have a visionary management team who has demonstrated continuous and sustainable success in the industry and commitment to our customers and partners

We have a long history of nearly 40 years, initially as a family business focusing on the international spirits and wines industry in Hong Kong. With our accumulated experience and market insights, we have become a leading beverage company in Hong Kong and China and a trusted partner to international beverage brands since our inception and have grown with our customers for nearly 40 years. Our long history of experience and commitment to our partners and customers have been the foundations of our success.

Our visionary management team carries on the family heritage and continues to achieve greater business success with systematic and refined management and operational philosophy. Our management team’s in-depth market knowledge and experience and precise insight on brand values, supported by various professional and dedicated teams and departments, contributed to the success of our flagship Tao Ti and Meko brands and our leading position in the natural, healthy and functional soft beverage market. Under their leadership, we made investments in our digitalized management system starting from the source of raw materials to sales and distribution management. These have resulted in our remarkable performance in the past and paved the way for our future growth and profitability.

BUSINESS STRATEGIES

Further strengthen our leading market position in the international spirits and wines market in China

We believe we are well-positioned to capture the growth potential in the international spirits and wines market in China, and plan to strengthen our cooperation relationships with existing key international spirits and wines brands, to further increase penetration of their product portfolios. We also plan to further expand and diversify our Third-party Brands portfolio by cooperating with selected international spirits and wines brands, whose products have great potential in the PRC market and are

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We will continue to provide end-to-end sales and marketing solutions for international spirits and wines brands, aiming to be the partner of choice for more global Third-party Brands and increase their product penetration in China.

Further develop our In-house Brand portfolio andexpandtheproductofferingofourIn-house Brands

We have a strong track record of developing In-house Brands and introducing new products under our In-house Brands. With our well-established capabilities in China and the favorable long-term market trend, we believe we are well-positioned to deliver sustainable growth in sales of In-house Brand Products.

Enhancing brand recognition of in-house natural, healthy and functional beverages. To meet market demand and capture growth momentum, we will continue to invest in the Tao Ti and Meko brands by establishing our in-house production capabilities. We plan to place more focus on online marketing seizing the related rapid growth opportunities. To this end, we plan to leverage our partnerships with mainstream e-commerce platforms and enhance our online marketing and promotion efforts. We will implement various online marketing campaigns together with celebrities and KOLs to promote brand image and increase sales.

Launching new in-house international spirit brands. International spirit products are becoming increasingly popular among consumers in China, especially the young generations under a more diversified dining and drinking culture. According to the F&S Report, the retail sales value of import international spirits and wines market in China is expected to increase from RMB100.5 billion in 2020 to RMB164.9 billion in 2025, representing a CAGR of 10.4%. We plan to launch new in-house international spirit brands in China with in-house production capability, catering specifically to Chinese consumers to seize the tailwinds in the PRC spirit market. Our in-house international spirit brands will target different consumer groups compared with our international Third-party Brands, and will complement our existing international spirits and wines portfolio.

Further enhance our omni-channel sales network and increase product penetration

We have established an extensive omni-channel sales network across China with a geographical focus on regions with higher disposable income. We plan to optimize and expand our sales network to increase product penetration through the following measures:

Expanding and strengthen our offline sales network. We aim to expand our offline sales network, elevate product penetration rate, and capitalize on the demand for our products from consumers in China. We plan to first focus on geographical regions with relatively high disposable income and increasing demand for international spirits and wines. We will also reinforce our specialized offline sales network customized for diverse on-trade retailers by providing targeted product mix for multiple consumption scenarios. In addition, we aim to strengthen our communication with on-trade and off-trade customers and to improve our support to channel customers through better management of promotion activities and product display.

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Enhancing our online sales channels. We aim to strengthen our partnership with major e- commerce platforms and explore opportunities from emerging e-commerce platforms such as social e- commerce and livestream e-commerce, with an aim to enhance direct consumer interactions and to drive online sales growth.

Further build production capabilities across China to facilitate more a widespread geographical coverage

To enhance our production capabilities and for better quality and production control, we plan to strategically upgrade our production capabilities to meet the increasing market demand in China for our In-house Brand Products. We plan to develop in-house production capabilities for Tao Ti and Meko branded products in China to achieve broader geographical coverage. Localized production facilities will enable us to maintain our profit margins when expanding coverage across China. Meanwhile, along with the development of our in-house production facilities, we aim to enhance our R&D capabilities as well.

In this regard, we intend to use a portion of our [REDACTED] from the [REDACTED] to improve our production capabilities, including building a production facility in China and a new production line in Hong Kong. As of the Latest Practicable Date, we have not entered into any agreements in relation to such production facilities’ construction and expansion.

Strengthen our data analytics capabilities to enhance our sales, marketing and operation

We are dedicated to strengthening our data analytics capabilities to maximize and optimize the use of data collected from our established digitalized management system.

Data analytic capabilities in sales improvement. We intend to build our capability in collecting and analyzing sales data. Through our own direct sales force, we are well-positioned to collect first-hand consumer feedback, to obtain real-time sales data, and to evaluate consumer demand shifts in a timely manner. We plan to leverage consumer data we collect from our sales process to have a better understanding of consumer preferences. By responding to changing consumer tastes and preferences, we will further strengthen our R&D capabilities and product innovation.

Data analytic capabilities in targeted marketing. We plan to continue to analyze consumer data to identify the appropriate marketing approaches and increase marketing effectiveness. Through sales data analysis, we are well-positioned to get a better understanding of consumer behavior and formulate targeted marketing campaigns to attract consumers. We intend to strengthen our data analysis to expand consumer touchpoints and improve interaction with end consumers.

Data analytic capabilities in operation. We intend to further analyze data collected from our digitalized supply chain and inventory management system to improve the accuracy of our forecasts of production, sales and costs, and to achieve higher operating efficiency in our supply chain management. At the same time, we will enhance our logistics data analysis capabilities, to further improve the efficiency of our infrastructure and expedite delivery with lower logistics expenses.

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Pursue appropriate strategic acquisitions and business opportunities

We plan to continue to grow our business by exploring attractive acquisitions and collaboration opportunities that are compatible with our business. While we currently do not have any acquisition targets, we plan to identify suitable acquisitions and business opportunities in potential spirits brands based on factors such as brand recognition, development potential, complementary effect with our existing portfolio, distribution coverage, management, product positioning and pricing. We believe suitable acquisitions and business opportunities will further strengthen our value proposition. It will also help us gain experience and enhance expertise in developing new products, gather market intelligence on the latest consumer trends and provide us with the appropriate platform to expand into different product categories in the future. We believe that, as we have extensive experience in managing multiple brands, we can continue to grow our business through acquisitions and collaboration opportunities.

BUSINESS MODEL

We are a leading beverage company in Hong Kong and China, selling natural, healthy and functional beverages, international spirits and wines and other products, with vertically integrated platform capabilities to achieve continuous growth and profitability. We have end-to-end platform capabilities covering product R&D, raw material sourcing, production management, brand building, sales and marketing, and distribution and logistics of our In-house and Third-party Brand Products depending on market needs. We believe that this vertically integrated business model differentiates us from other players in the market. It enables us to develop In-house Brand Products while servicing international Third-party Brand Partners with our one-stop sales and marketing solutions.

Research & Development

We pursue excellence and are determined not to compromise product quality. We possess in-house product R&D capability for soft beverage products. Specifically, we have a joint task force consisting of our management team, marketing personnel and beverage specialists to develop new products that lead the consumer trends for healthy and functional soft beverages with natural ingredients and fresh taste.

In 2018, 2019 and 2020, we launched 28, 24 and 24 new beverage products, respectively, to cater to evolving consumer needs. In particular, in recent years, we have been focusing more on the natural, healthy and functional beverages that suit increasing consumer demand.

Raw Material Sourcing

We believe that quality raw materials are essential to maintain the product taste and uphold our product quality and value proposition for a ‘‘green and healthy’’ lifestyle. We strive to control the supply of key raw materials for our In-house Brand Products, from sourcing raw material suppliers, negotiating prices to placing orders for delivery. For example, for tea leaves, we directly source from tea plantations and actively manage the supply chain to meet our taste, freshness and order quality requirements.

Production Management

We endeavor to maintain control of product quality in soft beverage production. For our In-house Brand Products, we primarily rely on our production partners for production. We actively participate in every step of the production process of our production partners, from raw material supplies to product

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R&D and quality control. We implement comprehensive quality control measures to ensure our product quality. As of the Latest Practicable Date, we had four major production partners for our In-house Brand Products production.

Additionally, we possess in-house production capability in Hong Kong, and have been producing postmix for several world-renowned soft drink brands since 2013, utilizing their proprietary recipe, and offering them in fast food restaurants and convenience stores. During the Track Record Period, revenue from production and sales of postmix only accounted for approximately 2.3%, 2.1% and 2.1% of our total revenue, respectively.

Brand Building

Brand building is one of our core platform capabilities that we take pride in. With a history of nearly 40 years, having evolved with the developing market and supported by a well-trained and experienced team, we are able to identify the uniqueness of a brand to build, formulate and execute bespoke and localized solutions to enhance brand awareness for our In-house Brands and Third-party Brands.

Other than our In-house Brands, we also utilize our capabilities and provide differentiated brand strategies for the Third-party Brands that we work with. We discuss with our international brand partners at the outset in detail and recommend product portfolioandmarketingstrategiestailoredtothe PRC market. Our international brand partners will then engage us to be responsible for their brand promotion and sales expansion in Hong Kong and/or China. We have collaborated with some of our brand partners for over 10 years, which we believe demonstrates our brand partners’ appreciation of the value that we bring to them and their trust in us. During the Track Record Period, we have partnered with all of our international Third-party Brand Partners on an exclusive and/or sole basis in Hong Kong and China. Among these international brands, some continued to partner with us when they move their market focus from Hong Kong to China, which demonstrates our extensive and strong relationship with our international brand partners.

Sales and Marketing

Together with our brand building capability, we have built a sales and marketing capability to precisely execute our brand building strategies. Our sales and marketing team has created numerous successful marketing campaigns over the years and serviced a large network of our on-trade, off-trade and online customers.

Our knowledge in sales and marketing strategies stem from our experience in beverage distribution and close cooperation with market players in the industry. We also obtain first-hand information from our customers and incorporate such information into our know-how of the beverage industry.

One of the key components of our extensive sales network is our on-trade and off-trade customers, with whom we have established direct selling relationships. We have been focusing on the development of long-lasting and deep-rooted relationships with the local on-trade and off-trade customers, which we believe are essential to our beverage business. We are able to directly reach these customers, instead of going through the wholesaler distribution chain. This enables us to obtain and develop valuable insights on market trends and consumer preferences.

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Distribution and Logistics

To ensure timely fulfillment of our commitment, we maintain an in-house distribution and logistics team in Hong Kong, which can directly reach our on-trade, off-trade and online customers throughout Hong Kong. In addition, in China, we adopt a wholesalers system which consists of regional wholesalers and dealers to service our customers. We also engage various distribution and logistics service providers to provide flexible and ready-to-use warehouses and logistics services.

BRANDS AND PRODUCTS

We believe that our vertically integrated platform capabilities enable us to identify, choose and optimize the brand and product portfolio that we offer in China and Hong Kong.

By Product Type

We are deeply rooted in the spirits and wines industry and have been focusing on the natural, healthy and functional soft beverage market.

The table below sets forth a breakdown of revenue contribution by product category for the periods indicated.

Year Ended December 31, 2018 2019 2020 % of total %oftotal % of total Amount revenue Amount revenue Amount revenue (HK$ in millions except for percentages)

Natural, healthy and functional beverages...... 449.1 33.1 480.1 26.1 438.7 23.6 International spirits and wines . 669.1 49.4 1,121.7 61.0 1,216.7 65.5 Others(1) ...... 237.3 17.5 237.0 12.9 202.2 10.9

Total ...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0

Note:

(1) During the Track Record Period, products under ‘‘Others’’ category included primarily beers, sakes, other soft beverages, postmix and packaged food and snacks.

International spirits and wines

Our international spirits and wines category consists primarily of red wines, white wines, champagne, whisky, vodka, rum, gin and liqueur. During the Track Record Period, revenue from this segment contributed to approximately 49.4%, 61.0% and 65.5%, respectively, of our total revenue from thesameyear.Weofferawidearrayofspiritsandwines,acrossthepricerangessuitablefordifferent

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We set out below some of the international spirits and wines brands that we cooperate with during the Track Record Period:

(in alphabetical order)

Natural, Healthy and Functional Beverages

We value the importance of a green and healthy lifestyle, which has been embedded in our business strategies and development. Green tea has been hailed for its health benefits in Asian countries for a long time. We were the first to market Tao Ti natural-brew ready-to-drink beverages in Hong Kong in 1996, which became a popular natural tea brand in Hong Kong. The ready-to-drink natural tea beverages helped to change the tea drinking habit in Hong Kong as it increased accessibility to quality tea beverages. We continue our product innovation to expand the Tao Ti green tea series, featuring additional healthy variants, such as low calorie and low sugar, to continue to lead the market.

Over the years, we have expanded our offering of natural, healthy and functional beverages products to also include natural fruit juice, oat milk, and energy drinks. During the Track Record Period, revenue from sales of natural, healthy and functional beverages amounted to HK$449.1 million, HK$480.1 million and HK$438.7 million, respectively, contributing approximately 33.1%, 26.1% and 23.6%, respectively, of our total revenue from the same year. In particular, in 2020, revenue from sales of natural, healthy and functional beverages featuring low calories and low sugar amounted to HK$195.7 million, contributing to approximately 43.6% of revenue from our natural, healthy and functional beverages in the same year. As of December 31, 2020, our natural, healthy and functional beverages category comprised 252 SKUs under nine brands.

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We set out below product details of our representative natural, healthy and functional beverages products during the Track Record Period:

Tea Series (茶品系列): Tao Ti honey green tea was the first product line we introduced to Hong Kong. It is suited to those tea lovers who want to have easy access to quality tea while not compromising on taste and quality. Our Tao Ti tea series features brewing from natural tea leaves, and we strive to preserve the tea’s color, smell and taste as much as possible. We do not add preservatives or artificial colors. Our various ready-to-drink packaging made drinking premium tea on the go possible.

In addition to the Tao Ti honey green tea which is one of our bestsellers, we also launched new flavors such as apple green tea and lemon green tea. We may launch some seasonal flavors as well, such as grapefruit plum, pineapple grapefruit and mango guava.

Supreme tea (極品系列): In 1997, consistent with our continuous emphasis and promotion of ‘‘green and healthy’’ drinking, we launched our supreme tea series, which features additional healthy variants, such as sugar-free, detoxification and antioxidant. We have expanded our tea beverage product portfolio to include green tea, black tea, Oolong tea, barley tea and genmaicha. We developed our house-blend recipe to mix tea base with additional ingredients, such as buck wheat and cassia seeds, to offer additional healthy elements.

Pak Gor Yuen (百果園): Our Pak Gor Yuen series is our juice beverage product line. We select quality fruits from all around the world to make our products. We constantly experiment on different mixes of flavors to produce tasty fruit-based beverages. We do not add preservatives or artificial colors.

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Our mandarin lemon juice (‘‘柑桔檸檬’’) was inspired by a unique and well-known Hong Kong- style juice mix and became one of our most popular juice flavored beverages soon after it was launched. Our muscat grape fruit juice uses natural grape juice as the base with an aim to preserving the unique floral perfume smell of the muscat grape as much as possible.

Balancy (巴崙氏): The Balancy series is under our Meko In-house Brands. It features various herbal and functional drinks, including herbal green tea, herbal cool lemon and herbal detoxification. This series was inspired by the ‘‘leung cha (涼茶)’’ culture, which has a long history in Hong Kong and Guangdong province. Such beverages are believed to cool ‘‘internal heat’’ and are used to treat a range of health problems. Our R&D specialists innovatively mixed our tea products with natural and healthy herbal extracts, such as cassia seeds, honeysuckle, chrysanthemum, momordica grosvenori and dendrobe.

Others

During the Track Record Period, our other products included primarily beers, sakes, other soft beverages, postmix and packaged food and snacks. We maintain an optimized and a diversified product portfolio so that we can quickly adapt to the evolving market needs and satisfy consumer needs. During the Track Record Period, revenue from sales of other products contributed approximately 17.5%, 12.9% and 10.9%, respectively, of our total revenue from the same year. As of December 31, 2020, our other products category comprised 293 SKUs under 36 brands.

We set out below product details of some of our representative other products, including Meko snacks and Tao Ti ice cream, during the Track Record Period:

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By Brand

We operate and grow our In-house Brands of Tao Ti and Meko. In addition, we are able to provide integrated sales and marketing solutions to Third-party Brand owners.

The table below sets forth revenue breakdown between In-house Brand Products and Third-party Brand Products during the Track Record Period: 2018 2019 2020 %oftotal %oftotal % of total amount revenue amount revenue amount revenue (in HK$ million, except percentages)

In-house Brand Products . . . 335.7 24.8 343.1 18.7 307.2 16.5 Third-party Brand Products(1) 1,019.8 75.2 1,495.7 81.3 1,550.3 83.5

Total ...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0

Note:

(1) during the Track Record Period, approximately HK$59.6 million, HK$62.2 million and HK$63.5 million was generatedbyWingTai.

In-house Brand Products

Our In-house Brand Products carry the brands of Tao Ti and Meko. Consistent with our corporate focus on the ‘‘green and healthy’’ lifestyle, our In-house Brand Products generally feature natural ingredients plus additional healthy elements, such as sugar-free, detoxification and antioxidant.

We were the first to market Tao Ti natural-brew ready-to-drink beverages in Hong Kong in 1996 and Telford Enterprise acquired Tao Ti brand in 2006. Pursuant to a deed of assignment between Telford Enterprise and Telford Beverage Brands, we are entitled to all right, title and interest in relation to 61 Tao Ti trademarks registered or being applied for registration in Hong Kong, the PRC and other jurisdictions, together with the goodwill. We identify the opportunity and precisely marketed the Tao Ti brand, targeting the RTD tea beverage market. Meanwhile, consistent with our long-term philosophy of a ‘‘green and healthy’’ lifestyle, we empower this brand with product research, refinement and diversification and continuous introduction of more natural, healthy and functional elements in the Tao Ti product series.

We first marketed beverages under the Meko brand in 1998. Pursuant to a deed of assignment between Telford Enterprise and Telford Beverage Brands, we are entitled to all of its right, title and interest in relation to 25 Meko trademarks registered in Hong Kong, the PRC and other jurisdictions, together with the goodwill. Our Meko brand aims to be a young, trendy, stylish and functional soft beverage brand. We offer frequently seasonal flavors to address consumers’ demand for new beverage tastes and to increase brand awareness.

We maintain a diversified In-house Brand portfolio and continue to grow our In-house Brands, which distinguishes us from other market players in the natural, healthy and functional soft beverage market in Hong Kong.

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The table below sets forth details of our representative In-house Brand Products:

Recommended unit retail Launch Standard individual container price range Product Image/logo time volume (HKD)*

TaoTiTeaSeries...... 1997 1500ml/500ml*/bottle $8–$11 340ml/can 250ml/soft pack

Tao Ti Supreme Tea Series. . . . . 2006 1500ml/900ml/500ml*/ $8–$11 bottle 310ml/340ml/can 250ml/soft pack

TaoTiPakGorYuenSeries.... 2002 1500ml/500ml*/430ml/ $8–$11 bottle 250ml/soft pack

TaoTiNataDeCocoDrinks... 2007 500ml/bottle $7–$8 340ml*/can

Tao Ti Taiwan Drinks Series. . . . 2012 340ml*/310ml*/can $7–$8

BalancySeries...... 2011 430ml*/bottle $7–$9 310ml/can

MekoSmileyTeaSeries...... 2018 430ml*/bottle $7–$9 250ml/soft pack

Meko 100% Pure Coconut Water . 2012 1L/soft pack $8–$10 310ml*/can

MekoPureWater...... 2001 570ml*/bottle $5–$8

* The recommended unit retail price range identified in the table above is based on the standard individual container volume marked with a ‘‘*’’ sign.

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In addition, we have benefited from a large portfolio of brands and trademarks of which we have the exclusive right to use, comprising 21 various registered brands of spirits, soft beverages and packaged food as of the Latest Practicable Date, such as a trademark for our Legend tea (‘‘ ’’), and a trademark for red wine (‘‘ ’’). Such products supplement our product portfolio and allow us to address differentiated market needs.

Third-party Brand Products

We cooperate with owners of the Third-party Brands, and offer our end-to-end sales and marketing solutions. Leveraging our integrated capabilities from brand building to sales and marketing, direct selling and distribution and logistics, we are able to effectively promote and increase sales of the Third- party Brand Products in China and Hong Kong. We periodically review the market trend and sales performance of our Third-party Brand Products, and actively adjust and optimize our Third-party Brand Products portfolio. During the Track Record Period, we procurred Third-party Brand Products mainly from the United States, Europe, Japan, South East Asia and Chile. Our Third-party Brand portfolio focuses on spirits and wines industry, and covers other alcoholic beverages such as beers and sakes, as well as packaged food and snacks.

Our representative Third-party Brands for international spirits and wines are listed above. See ‘‘— Brands and Products — By Product Type.’’ We set out below some of the Third-party Brands during the Track Record Period:

BEVERAGE BEER & SAKE

During Track Record Period, Wing Tai, a subsidiary within our Group upon completion of the Reorganization, carries on the business of the sale of alcoholic and soft beverages and other products from various suppliers.

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OUR BRAND PARTNERS

We constantly explore opportunities with new suitable international brand owners or brands and introduce them to Hong Kong and China. To the brand owners, we believe that we are unique in their sales model and are able to expand their revenue sources. Leveraging our end-to-end platform capabilities and successful track record in Hong Kong and China with a diversified product portfolio, we believe that we have established our competitive advantage in attracting and securing a diversified high quality brand portfolio. We have cooperated with all of our international Third-party Brand Partners on an exclusive and/or sole basis for their product sales and distribution in Hong Kong and China.

In addition, we also actively seek new business opportunities with those international brand owners that fit in our brand and product portfolio and sales strategies. To enable us to obtain more information on new brands and products, we obtain regular updates from our existing brand partners regarding the launch of new products, and intelligence on potential new brand partners by attending international food and beverage trade shows.

Our senior management team, supported by our designated brand team, is actively involved in the identification and development process. We may selectively partner with those established international brands for their debut or expansion in the Hong Kong and PRC market. We may also selectively choose those relatively niche international brands with good growth potential based on our market research and experience, and introduce them to the vast market in Hong Kong and PRC market.

We believe we strengthen our engagement with the brand partners over the course of our collaboration with them and provide services to accommodate their needs and develop new business opportunities.

Identification and Assessment

Our senior management team has accumulated valuable insight and experience in, and is widely connected to, the beverage industry, particularly the spirits and wines industry. They are actively involved in the brand partner identification, assessment and development process. When choosing brand partners to cooperate with, we focus on factors such as: the popularity of the target products in their home countries and sales potential of such products in Hong Kong and China, as well as the corporate background, reputation and trading history of the potential brand partners.

Market Analysis

Our marketing team analyzes the market demand for the target products, as well as price differentiation and market positioning of similar products. In this process, we actively involve our selected regional wholesalers or retailers and seek their feedback.

Engagement of Third-party Brand Partners

Our management team makes the decision if we should cooperate with the new brand partners. Typically, it will take approximately six to 18 months to complete a brand partner engagement. Afterwards, our marketing team, led by our general managers, conducts post-engagement review on sales performance of, relationships with and operations of our brand partners and products.

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We do not generally set targets on new brand engagements each year. Instead, we typically review our brand portfolios and make adjustments from time to time to fit the evolving consumer demand.

As of December 31, 2020, we had 138 brand partners covering diverse product categories, including primarily natural, healthy and functional drinks, spirits and wines, sakes, beers, and packaged food and snacks. We maintain strong business relationships with our brand partners. A large number of our brand partners have cooperated with us for over 10 years. We have developed and maintained long- term business relationships with most of our brand partners, even though we do not enter into any long- term agreements with them.

Agreements with the Brand Partners

We enter into framework distribution agreements with our brand partners for each brand, and place orders under the respective agreements. Such framework agreements are typically renewed every year, which is consistent with market practice. We strive to provide superior marketing, sales and value-added services to our brand partners and typically will only accept exclusive arrangements for our services. During Track Record Period, a number of framework distribution agreements between us and certain beer brand partners do not grant us the distribution rights. However, to our knowledge, we act as the sole distributor for these beer brand partners. Our framework distribution agreements with brand partners typically have the following terms:

. Duration: Typically one year.

. Geographic coverage: Typically covers Hong Kong, China and Macau.

. Minimum purchase amount: We are usually not subject to minimum purchase amount requirement.

. Annual sales targets: For some alcoholic products, we will set annual sales targets with our brand partners.

. Marketing expenses: Brand partners will share marketing expenses. We will provide marketing strategies and proposals with a budget plan, which will be approved by the brand partners, and regularly reviewed by us.

. Pricing: For Third-party Brand Products, we would recommend to and agree with the relevant brand partners their respective retail price ranges in Hong Kong and the PRC market.

. Payment: We are usually required to pay the brand partners within 60 to 90 days of invoice through bank transfer.

. Product liabilities: The brand partners are responsible for ensuring that the products meet the quality and safety standards as prescribed by the relevant governmental authorities. They also agree to take full responsibility, including indemnifying us, in the event that the products have to be recalled due to quality issues.

. Delivery: We will order from the designated suppliers of the brand partners and such suppliers will arrange delivery of products to our designated warehouses.

. After-sales: We are usually not responsible for the after-sales services of the Third-Party Brand Products. Such matters will be handled by the Third-Party Brand partners if we receive requests or complaints from our customers.

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. Renewal and termination: Each party may unilaterally terminate the agreement by providing a 30-day advanced written notice, upon the occurrence of a number of stipulated events, including: (i) the other party breaching its material obligation under the agreement and failing to rectify within 10 days of notice; (ii) the other party submitting documentation that is materially inaccurate and failing to rectify within 10 days of notice; (iii) the other party being subject to insolvency, bankruptcy or litigation; or (iv) the other party failing to maintain the licenses and permits necessary to perform its obligations under the agreement.

. Product recall: The brand partners shall indemnify us against any product recall costs which we may suffer or incur as a result of or in connection with any defect of a relevant Third- party Brand Product.

. Storage conditions: We are required to maintain proper shelf and cold storage conditions.

SALES AND DISTRIBUTION NETWORK

Overview

As a leading beverage company in Hong Kong and China, we have established differentiated channel strategies and a robust omni-channel sales and distribution network that are tailored to, and deep-rooted in, the respective local markets. Our sales and distribution network enables us to rapidly and efficiently expand our market reach and increase our sales in China.

In Hong Kong, we sell our products directly to online and offline retailers, consisting of on-trade and off-trade customers. In China, we sell our products primarily through a wholesaler system comprising regional wholesalers and dealers to establish an extensive and effective sales network and to service our offline retailers of both on-trade and off-trade channels. To a lesser extent, we also sell directly to online and certain offline key account retailers, in order to maintain a full-spectrum coverage in the PRC market.

As of December 31, 2020, we had 5,636 and 13 offline retailers, respectively, in Hong Kong and China, serviced by our direct sales force. As of the same date, our wholesaler system consisted of 80 regional wholesalers and 139 dealers to service our offline retailers in China. For our online sales, we had nine online direct sales customers and 10 online stores operated by e-commerce service providers. Sales of our products cover 31 provinces, municipalities and autonomous regions in China and Hong Kong.

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The table below sets forth a breakdown of revenue contribution by principal operation for the period indicated:

2018 2019 2020 %oftotal %oftotal % of total amount revenue amount revenue amount revenue (in HK$ million, except percentages)

HongKong...... 958.7 70.7 982.4 53.4 873.3 47.0 China...... 396.8 29.3 856.4 46.6 984.3 53.0

Total ...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0

The table below sets forth our revenue breakdown by sales channel for the periods indicated:

2018 2019 2020 %oftotal %oftotal % of total amount revenue amount revenue amount revenue (in HK$ millions, except percentages)

Offline...... 1,277.8 94.3 1,721.5 93.6 1,734.7 93.4 Wholesalers...... 257.0 19.0 651.7 35.4 818.0 44.0 Directsales...... 1,020.8 75.3 1,069.8 58.2 916.7 49.4 Online...... 77.7 5.7 117.4 6.4 122.9 6.6

Total ...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0

Revenue from these sales channels is recognized upon the transfer of control of the products.

Offline Hong Kong Market

We sell our products directly primarily to retailers in Hong Kong. Through our direct and close relationships with our retailers, we keep ourselves well abreast of the latest market developments and consumer trends, with first-hand information.

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The table below sets forth the total number of our retailers in Hong Kong and their movements for the periods indicated:

2018 2019 2020

Atthebeginningoftheperiod...... 5,631 5,689 5,690 Newly gained(1) ...... 1,352 1,275 1,243 Inactive(2) ...... 1,294 1,274 1,297 Attheendoftheperiod...... 5,689 5,690 5,636

Notes:

(1) ‘‘newly gained’’ retailers refer to retailers who did not have transactions with us in the prior year but purchased from us in the current year.

(2) ‘‘inactive’’ retailers refer to retailers who did not have transactions with us in the current year.

During the Track Record Period, we have maintained good working relationships with our retailers, and the total number of our retailers in Hong Kong remained stable. The inactive retailers refer to retailers who did not purchase from us or to whom we did not sell products within the relevant year, which was primarily due to the following reasons: (i) closure of business; and (ii) consistent late payments to us. Meanwhile, we were generally able to secure new retailer customers in approximately the same amount, usually those new retailers opening their businesses at the same premises subsequent to the closure of business of the previous retailers. As a result, we maintained the stability of our total number of retailers during the Track Record Period. During the Track Record Period and up to the Latest Practicable Date, there were no material unsettled disputes or litigations with such inactive retailers.

Our in-house sales team is dedicated to connecting with our retailers directly. Our retailers can be categorized as (i) off-trade customers, whose sale of beverages is for consumption off their premises, including primarily hypermarkets, supermarkets, convenience stores and specialty retailers in spirits and wines, and (ii) on-trade customers, on whose premises the consumption of beverages usually takes place, including primarily restaurants, clubs, bars and hotels.

Off-trade Market

Sale strategies and tactics in the off-trade market focus on in-store promotions such as discount promotions and free sample tastings for selective products. The off-trade outlets are generally regarded as mass retail outlets, and therefore it is easier to conduct product sampling especially when launching new brands or products. In addition, we believe direct selling to the off-trade outlets can achieve a high volume of sales and increase brand awareness.

We highly value our deep-rooted business relationships with our off-trade customers which have been established over time. Establishing and maintaining relationships with off-trade customers require strong relationship building and management skills, including experience in market segmentation, channel management and development. Particularly, for off-trade customers, they require more of our key account management skills and strong sales and distribution network.

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As of December 31, 2020, we had 2,343 off-trade customers. During the Track Record Period, a majority of our revenue from off-trade customers was generated by sales to major supermarket chains and convenience store chains. In 2018, 2019 and 2020, revenue generated from our off-trade sales was HK$697.8 million, HK$730.3 million and HK$698.0 million, respectively, accounting for 51.5%, 39.7% and 37.6% of our total revenue, respectively.

We have a seller-buyer relationship with our off-trade customers and retain no ownership over the products that we sell to them.

During the Track Record Period, one of such off-trade customers, Ming Tai, is a connected person of our Company. Its transaction amounts with us were approximately HK$254,000, HK$38,000 and HK$73,000 in 2018, 2019 and 2020, respectively. In addition, another off-trade customer, Venmart is also a connected person of our Company. Its transaction amounts with us were nil, nil and approximately HK$72,000, in 2018, 2019 and 2020, respectively. See ‘‘Connected Transactions — Fully Exempt Continuing Connected Transactions’’ for further details. Save for Ming Tai and Venmart, to the best knowledge and belief of our Directors, none of our Directors or their respective close associates or any of our Shareholder (who to the knowledge of our Directors, owns more than 5% of the issued share capital) had any interest in our off-trade customers.

On-trade Market

We adopt differentiated sales strategies for our on-trade market to suit different occasions, consumption habits and behaviors, such as sample tastings, gifts offerings and discounts. Compared to the off-trade outlets, we believe that it is easier to create a sense of prestige for the products at on-trade outlets, and therefore direct selling into these outlets may help our efforts for product positioning and penetration, particularly for our spirits and wines products. In addition, we tend to conduct more consumer market education for the spirits and wines we offer in the on-trade market. Over the years, we have partnered with our on-trade customers to launch numerous innovative and trend-setting product campaigns, such as some tasting events and workshops, popular drinking games, alcohol fun pairing and mixing and brands crossover.

We highly value our deep-rooted business relationships with our on-trade customers which have been established over time. Establishing and maintaining relationships with on-trade customers also require strong relationship building and management skills. Particularly, the on-trade customers require more of our interpersonal skills and direct sales experiences.

As of December 31, 2020, we had 3,293 on-trade customers. In 2018, 2019 and 2020, revenue generated from our on-trade sales was HK$248.5 million, HK$239.1 million and HK$151.6 million, respectively, accounting for 18.3%, 13.0% and 8.2% of our total revenue, respectively.

We have a seller-buyer relationship with our on-trade customers and retain no ownership over the products that we sell to them.

During the Track Record Period, one of such group of on-trade customers, Sino Administration Services Limited and other members of the Sino Group are connected persons of our Company. Their transaction amounts with us were approximately HK$1,498,000, HK$1,663,000 and HK$682,000 in 2018, 2019 and 2020, respectively. See ‘‘Connected Transactions — Fully Exempt Continuing Connected Transactions’’ for further details. Save for Sino Administration Services Limited and other

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Key Terms of Agreement with our Off-trade and On-trade Customers

We generally enter into annual trading agreements with our off-trade and on-trade customers. These agreements specify a variety of terms, including the payment method, pricing policies and delivery arrangements. We set forth below the key terms of the trading agreements:

Off-trade Customers On-trade Customers

Duration ...... Generallyoneyear Generallyoneyear

Credit term ...... Typically60–90 days Typically 30–60 days

Delivery of products . . . Generally our in-house delivery team makes Generally our in-house delivery team delivery to our off-trade customers makes delivery to our on-trade customers

Product return ...... Weusuallydonotallowproductreturns We usually do not allow product except for quality issues. In limited cases, returns except for quality issue. we allow major hypermarket and According to the F&S Report, our supermarket chains to make product returns return policy is consistent with the for expired or slow-moving products, market practice considering our long-term business relationship with these customers and their extensive consumer reach. During the Track Record Period, there were certain product returns from such major hypermarket and supermarket chains, representing less than 0.5% of our total revenue in the relevant year during the Track Record Period. According to the F&S Report, our return policy is consistent with the market practice

Sales target and We generally do not set a sales target for our We generally do not set a sales target incentives...... off-trade customers. We may provide sales for our on-trade customers. We incentives, such as sales rebates, if a sales may provide sales incentive, such target is stipulated in the agreement and as sales rebates, if a sales target is the off-trade customers reach such sales stipulated in the agreement and the target on-trade customers reach such sales target

Minimum purchase We generally do not set any minimum Wegenerallydonotsetany requirement...... purchase requirements for our off-trade minimum purchase requirements customers for our on-trade customers

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Off-trade Customers On-trade Customers

Pricing policy ...... Weproviderecommendedretailpricetoour We provide recommended retail price off-trade customers to our on-trade customers

Termination...... Generally,each party may unilaterally Typically, each party may unilaterally terminate, supersede or amend the terminate the agreement without agreement upon mutual agreement notice in the event of: (i) the other party failing to perform its contractual obligations due to force majeure for a specified period of time,or(ii)theotherparty becoming bankrupt, insolvent, or unable to repay its debts

Offline PRC Market

We adopt a wholesaler system consisting of (i) regional wholesalers to efficiently manage our sales and distribution network, and (ii) dealers to expand our product category and customer reach. Capitalizing on a strong in-house sales and marketing team, we also directly sell to certain key accounts in China.

Our Wholesaler System

Our wholesaler system in China consisting of regional wholesalers and dealers evolved over time to fit in, among other things, our business strategies, development stages and market conditions. Our regional wholesalers are dedicated to and responsible for a specific brand portfolio in a predetermined regional market. Meanwhile, our dealers are engaged to service our on-trade and off-trade customers who are not covered by our regional wholesalers.

As of December 31, 2020, our wholesaler system comprised of 80 regional wholesalers and 139 dealers.

Regional wholesalers

Our regional wholesalers are usually well-established spirits and wines distributors with extensive local sales network and resources, who are able to purchase from us in large quantities. In addition to evaluation a regional wholesaler’s purchasing power, we also evaluate a regional wholesaler’sbusiness qualifications and distribution capabilities. The distribution capabilities we consider include, among other things, breadth and quality of sales network, scale of operation, creditworthiness and financial condition, and capabilities in personnel, warehousing, logistics and transportation.

We rely on these regional wholesalers to effectively establish our national presence and extensive customer reach. We encourage our regional wholesalers to participate in the promotions and advertising activities that have been pre-approved by us to accelerate product sales. The regional wholesalers are also allowed to further sell our products to their wholesalers and retailers.

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Effective distribution of a large spectrum of spirits and wines requires specialized knowledge and differentiated sales network. We categorize our spirits and wines sold in China into three major categories: brown spirits, white spirits and wines. We may adjust the major categories from time to time to suit our expanding product portfolio in China. For each major category, we may engage one or two regional wholesalers to be responsible for that specific category within a geographical region. China is a vast market and each region has its own characteristics in terms of drinking habits, purchase patterns and sales network. We believe that engaging regional wholesalers responsible for each geographical region helps to adapt to the specific local circumstances and development. To avoid cannibalization, we carefully manage the number of regional wholesalers engaged in each geographical region.

In 2018, 2019 and 2020, revenue generated through our regional wholesalers amounted to nil, HK$377.8 million and HK$670.3 million, respectively, accounting for nil, 20.5% and 36.1% of our total revenue, respectively.

Dealers

To effectively establish our product presence and penetrate into urban or more remote areas, we may engage dealers to distribute some of the products and brands. In addition, we may engage dealers to service the on-trade and off-trade customers in China that are developed by our in-house sales and marketing team. Compared to our regional wholesalers, the dealers typically do not purchase from us in large quantities and therefore do not enjoy the most favorable sale prices offered to the regional wholesalers. We consider that the engagement of dealers supplements the extensive sales network of our regional wholesalers and achieves coordinated development and sales growth of our expanding product portfolio.

In 2018, 2019 and 2020, revenue generated through our dealers amounted to HK$257.0 million, HK$273.9 million and HK$147.7 million, respectively, accounting for 19.0%, 14.9% and 8.0% of our total revenue, respectively.

Movement during the Track Record Period

The table below sets forth the total number of our regional wholesalers and their movements for the periods indicated:

2018 2019 2020

Atthebeginningoftheperiod...... 0 0 14 Newlyadded...... 0 14 69 Non-renewal...... 0 0 3 Attheendoftheperiod...... 0 14 80

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The table below sets forth the total number of our dealers and their movements (including addition and non-renewal) for the periods indicated:

2018 2019 2020

Atthebeginningoftheperiod...... 236 280 430 Newlyadded...... 122 228 42 Non-renewal...... 78 78 333 Attheendoftheperiod...... 280 430 139

During the Track Record Period, we actively explored an optimized wholesaler system to meet the demands of our growing product portfolio in China and seize the market opportunities.

In 2018, we had not established our wholesaler network and grew our sales primarily through dealers to expand our geographical coverage and meet our on-trade and off-trade customers’ demands. Meanwhile, we actively reduced the total number of dealers in preparationforapilottrialforour regional wholesaler network with a selected brand.

In 2019, we established our regional wholesaler network with a selected brand. We have carefully selected 14 regional wholesalers who were able to purchase from us in large quantities and met our other requirements for a regional wholesalers. We empowered these regional wholesalers to focus on this specific brand portfolio and regional market, which we believe has improved operational efficiency and achieved rapid market growth. Meanwhile, we continued to engage dealers to supplement our regional wholesaler network and for market penetration.

In 2020, with the success of our pilot trial with a selected brand, we further expanded our regional wholesaler network to cover more key brands and expanded areas. We believe that this helped to streamline and optimize our wholesalers system and improved management efficiency. Meanwhile, we reduced the number of dealers to coordinate with our efforts in growing our regional wholesaler network.

We have a seller-buyer relationship with our regional wholesalers and dealers and retain no ownership over the products that we sell to them. To the best knowledge and belief of our Directors, none of our Directors or their respective close associates or any of our Shareholder (who to the knowledge of our Directors, owns more than 5% of the issued share capital) had any interest in our regional wholesalers and dealers.

During the Track Record Period, we did not have any material disputes and we were not a party to any legal or arbitration proceedings with any of our regional wholesalers and dealers.

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Key Terms of Agreements with our regional wholesalers and dealers

We set forth below the salient arrangement between us and our regional wholesalers and between us and our dealers:

Regional wholesalers Dealers

Duration ...... Generallyoneyear Generallyoneyear

Distribution geography. . . . Usually by specified May not have a predetermined predetermined distribution distribution geography. Usually, geography municipality. We do the specific on-trade or off-trade not generally allow our regional customers serviced by such wholesalers to distribute our dealers will be specified products outside their predetermined distribution geography

Sub-distribution...... Generallyallowedtosub- Generallyallowedtosub- distribute our products to their distribute wholesalers and retailers. However, the lower-tier wholesalers are required to distribute our products within the same predetermined distribution geography as the regional wholesaler

Minimum procurement Usually not subject to any Usually not subject to any requirement...... minimum procurement minimum procurement requirement. However, to qualify requirement for a regional wholesaler, a wholesaler is expected to reach certain order quantities

Sales target ...... Usuallyaresubjecttoindicative Usually are not subject to sales targets agreed between us indicative sales targets and the regional wholesalers

Pricing ...... Weproviderecommended We provide recommended wholesale price range and wholesale price range and recommended retail price to our recommended retail price to our regional wholesalers dealers

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Regional wholesalers Dealers

Sales rebate ...... Usuallycanberewardedwitha We may not provide sales rebate sales rebate if the regional for dealers. But if there is a sales wholesalers satisfactory perform rebate, usually the dealers can be under the agreement rewarded with a sales rebate if they satisfactory perform under the agreement

Inventory and sales Required to submit inventory May not be required to submit reporting...... report and sales report on a inventory report or sales report. monthly basis Our sales team typically follow up with ultimate on-trade and off- trade customers to check

Credit term...... Usuallynocredittermandare Usually no credit term and are required to pay in full before required to pay in full before product delivery product delivery

Product return ...... We generally do not accept return We generally do not accept return of non-defective unsold or expired of non-defective unsold or expired products. According to the F&S products. According to the F&S Report, our return policy is Report, our return policy is consistent with the market practice consistent with the market practice

Product delivery ...... We arrange delivery services with We arrange delivery services with Independent Third Party logistics Independent Third Party logistics companies and bear the delivery companies and bear the delivery cost cost

Key Accounts

Leveraging our strong in-house sales and marketing team, we established direct connection with, and directly sold to certain key accounts in China, including primarily those multi-national hypermarket chains or PRC leading hypermarket chains). As of December 31, 2018, 2019 and 2020, we had 18, 14 and 13 key accounts customers in China, which contributed approximately 2.2%, 1.9% and 2.1% of our total revenue, respectively.

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Key Terms of Agreement with Key Accounts

We set forth below the salient arrangement between us and our key accounts:

. Duration: Generally one year, subject to renewal.

. Payment and credit terms: We typically grant a credit term of 60 days to our key accounts.

. Delivery of products: We typically arrange delivery services with a third party logistics company at our cost.

. Product returns: In limited cases, we allow our key accounts customers to make product returns for expired or slow-moving products, considering our long-term business relationship with these key accounts customers, their leading positions and broad network and their extensive consumer reach. Such key accounts customers allow us to reach a vast number and broader base of customers. During the Track Record Period, there were only minimal product returns from such key accounts customers, representing less than 0.2% of our total revenue in the relevant financial year during the Track Record Period. According to the F&S Report, our return policy is consistent with the market practice.

. Sales target and incentives: We generally do not set a sales target for our key accounts customers. We may provide sales incentive, such as sales rebates, if a sales target is stipulated in the agreement and the key accounts customers reach such sales target.

. Minimum purchase requirements: We generally do not set any minimum purchase requirements for our key accounts customers.

. Pricing policy: We typically provide recommended retail price to our key accounts customers.

. Termination: Typically, each party may unilaterally terminate the agreement without notice in the event of: (i) the other party failing to perform its contractual obligations by reasons of force majeure, (ii) the other party becoming bankrupt, insolvent, or unable to repay its debts, or (iii) a government authority or agency decision or ruling rendering the agreement unenforceable.

We have a seller-buyer relationship with our key accounts in China and retain no ownership over the products that we sell to them. To the best knowledge and belief of our Directors, none of our Directors or their respective close associates or any of our Shareholder (who to the knowledge of our Directors, owns more than 5% of the issued share capital) had any interest in our key accounts in China.

Online Sales Channels

Leveraging the rapid growth of e-commerce in China, we have been utilizing online sales channels to market and sell our products since 2009. We have an established system for online direct sales and distribution. Our online direct sales customers mainly include third party B2B2C platforms, such as Tmall, JD.com, and HKTVmall.com. Online sales of our products to consumers are also conducted through B2C online stores operated by us or our contracted service providers, such as our flagship stores

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The B2B2C platforms purchase products from us and subsequently sell such products to their customers. We have a seller-buyer relationship with these B2B2C platforms and retain no ownership over the products that we sell to them. To the best knowledge and belief of our Directors, none of our Directors or their respective close associates or any of our Shareholder (who to the knowledge of our Directors, owns more than 5% of the issued share capital) had any interest in the B2B2C platforms to whom we sell our products.

In 2018, 2019 and 2020, revenue generated through online channels represents approximately 5.7%, 6.4% and 6.6% of our total revenue, respectively.

Key Terms of Agreements with B2B2C Platforms

We set forth below the key terms of the merchandise agreements with the B2B2C platforms, to whom we sell our products.

. Duration: Generally one year, subject to renewal.

. Payment and credit terms: E-commerce platforms are generallyrequiredtosettlethe outstanding payment within 30 days after product delivery.

. Delivery of products: We arrange third-party logistics for product delivery at our cost.

. Product returns: Weusuallydonotallowproductreturnsexceptforqualityissues.Inlimited cases, we allow e-commerce platform with predominant market position in China to make product returns for expired or slow-moving products, considering its bargaining power and extensive consumer reach. During the Track Record Period, there were minimal product returns, representing less than 0.4% of our total revenue in the relevant financial year during the Track Record Period. According to the F&S Report, our return policy is consistent with the market practice.

. Sales target and volume discounts: We do not set a sales target.

. Minimum purchase requirements: We do not set any minimum purchase requirements.

. Pricing policy: We provide the recommended retail price to e-commerce platforms.

. Termination: Each party may unilaterally terminate the agreement by providing a 30-day advanced notice, if such terminationwasnotcausedbytheotherparty’s breach of contract.

B2B2C platforms may unilaterally terminate the agreement if we breach the agreement and do not rectify our breach within seven days or upon the occurrence of a number of stipulated events, including we failed to deliver products without reason, increase products offering beyond agreement scope, litigation, or other circumstances rendering us unable to perform our contractual obligations.

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We have a seller-buyer relationship with our B2B2C platforms and retain no ownership over the products that we sell to them. To the best knowledge and belief of our Directors, none of our Directors or their respective close associates or any of our Shareholder (who to the knowledge of our Directors, owns more than 5% of the issued share capital) had any interest in our B2B2C platforms.

Sales to Consumers through B2C Online Stores

Our B2C online sales to consumers are primarily conducted through our own online stores on various online channels, including various e-commerce platforms and WeChat mini program.

In order to provide a seamless shopping experience for increasingly tech-savvy customers, appeal to younger generations, and engage directly with our customers, we launched our first online store on TmallinApril2017.

Consumers who purchase our products through our B2C online sales are ultimate retail customers and we have a buyer-seller relationship with such consumers. Sales to such consumers are based on terms set out online and are commonly adopted by other online stores.

Management of Our Sales and Distribution Network

Our sales and marketing team actively manages our extensive sales and distribution network, and actively creates sales opportunities for our regional wholesalers and dealers, by connecting with various on-trade and off-trade customers and deploying differentiated sales and marketing activities. We constantly seek to optimize our sales strategy to adapt to changing market dynamics based on market information collected by our sales team. Based on the sales strategy, we establish guidance for our sales and distribution network accordingly.

We have a dedicated sales team to actively monitor and manage our sales and distribution network, in particular, the compliance with the nation-wide recommended retail price and our pricing guidance on selected products which we offer promotional discounts. Our team members visit our regional wholesalers and dealers at least once every one to two months so that we can obtain first-hand information about the sales performance of our regional wholesalers and dealers and also collect feedback on our products from the end-customers. In addition, given the direct and close relationship between us and the on-trade and off-trade customers, we also regularly get updated information from the on-trade and off-trade customers serviced by our regional wholesalers and dealers. By paying frequent visits to our regional wholesalers, dealers, and on-trade and off-trade customers, we can also be assured that growth generated from sales of our products are driven by real market demands with a reasonable inventories turnover. We believe that the terms of our standard distribution agreements discourage our regional wholesalers and dealers from stocking up for the following reasons: (i) we require payments in full before product delivery; (ii) we generally do not accept return of products; and (iii) our sales rebates are paid in the form of discount on products in subsequent purchases and will only be paid if the wholesalers and dealers satisfactorily perform the distribution agreements as a means to encourage performance compliance.

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. Enter into agreements: Typically, we enter into distribution agreements with our regional wholesalers and dealers on an annual basis, each using our standardized distribution agreements. We believe that this helps us to manage our wholesalers efficiently in a consistent and systematic manner. For our retailers like big supermarket chains and B2B2C platforms, we also typically enter into sales agreements with them on an annual basis.

. Minimize cannibalization: To minimize the risk of cannibalization among distributors and among various sales channels, we adopt the following measures:

(i) monitoring and managing the number of regional wholesalers for each geographical region. Typically, we will only engage one or two regional wholesalers for each product category in each geographical region;

(ii) monitoring and managing the brands, products and designated geography areas granted to the dealers to avoid potential competition and cannibalization between dealers and regional wholesalers and among dealers;

(iii) analyzing the inventory and sales reports received from our regional wholesalers. Moreover, we generally do not impose minimum purchase requirements on our regional wholesalers; and

(iv) for our sales to B2B2C e-commerce platforms and our sales to consumers through our B2C online stores, we have implemented a number of internal control measures and management measures to prevent cannibalisation, including (a) applying the same recommended price for the same product, (b) providing different multi-item combo packs to the B2B2C e-commerce platforms and our B2C online stores, (c) monitoring and taking into account the intervals between promotional events on the B2B2C e- commerce platforms and those on our B2C online stores, and (d) designing different themes for promotional events on the B2B2C e-commerce platforms and promotional events on our B2C online stores.

. Manage wholesalers: We only have direct contract with our regional wholesalers and dealers. Our regional wholesalers and dealers may further distribute our products to their wholesalers and retailers. We rely on our regional wholesalers and dealers to limit and manage their wholesalers’ activities and to monitor the performance of such wholesalers. We may indirectly monitor the sales by lower-tier wholesalers through inspecting the purchase volumes and inventory information of our regional wholesalers and dealers and the sale prices and sale volume in the end retail market and carrying out on-site visits to the lower- tier wholesalers, communicating with them and collecting feedback and information from them from time to time. We gather this data to monitor the inventory level of lower-tier wholesalers in order to prevent the loading of inventory by our regional wholesalers/dealers to their wholesalers.

If we notice any abnormal performance or non-compliance of a lower-tier wholesaler, we will require the corresponding regional wholesaler or dealers to take necessary action to rectify their wholesaler’s activities.

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. Inventory control: The ownership of our products is transferred to our regional wholesalers and dealers upon delivery and acceptance. Generally, regional wholesalers and dealers do not have the right to return products to us once they have purchased them, except in exceptional circumstances, such as product defects. In such cases, we will correspondingly return the defected products to the brand partners accordingly. We typically require our regional wholesalers and dealers to pay in full before the products are delivered to them to deter our regional wholesalers and dealers from overstocking. However, if there are specific indications and circumstances leading us to believe that our wholesalers and dealers have excessive inventory, we may refuse to sell additional products to them. During the Track Record Period and up to the Latest Practicable Date, we did not buy back any products that had been sold to our regional wholesalers or dealers.

. Prevent channel stuffing: We monitor the inventory levels of our regional wholesalers on a monthly basis by reviewing the inventory report submitted by the regional wholesalers and information we retrieve from random site visits we conduct. We may discuss with our retailers and make estimation of their general unsold inventory levels, depending on their inventory management capability and the size of inventory.

. Training and guidance: We have a dedicated sales and marketing team providing training and guidance to our customers on the product knowledge and how to promote and expedite the sales of products based on our extensive experience in the beverage industry in the PRC.

. Stock tracking: We adopt a code tracking system to detect unauthorized cross-region sales. Each of our product bears a unique code, which demonstrates product authenticity and indicates authorized sale jurisdiction. We are able to detect unauthorized cross-region sales by checking the product code. In addition, we will also conduct regular and random site visits to our regional wholesalers and dealers to check their inventory of our products to ensure that they are not accumulating unreasonably excessive inventory.

Top Five Customers

During the Track Record Period, revenue from our top five customers amounted to HK$404.9 million, HK$487.3 million and HK$488.9 million, respectively, accounting for 29.9%, 26.5% and 26.3% of our total revenue, respectively. During the Track Record Period, revenue from our largest customer accounted for 16.0%, 12.4% and 11.1% of our total revenue at the relevant year, respectively. Our top five customers include our key off-trade customers in Hong Kong and wholesalers in China.

As of December 31, 2020, the business relationships with our five largest customers ranged from one year to 24 years.

None of our Directors or their respective close associates or any of our Shareholder (who to the knowledge of our Directors owned more than 5% of the issued share capital) had any interest in our five largest customers during the Track Record Period.

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BRAND PROFILING AND MARKETING

We have designated teams specializing in different product categories comprising approximately 90 professionals closely working with our brand partners to provide customized brand profiling and marketing solutions.

Brand Positioning

Our knowledge in brand positioning and sales strategies stem from our experience in beverage distribution and close cooperation with market players in the beverage industry. We also obtain first- hand information from our retailers and develop such information into our know-how of the beverage industry and future trends.

Typically, at the initial stage of cooperation with our brand partners, we discuss with them in detail of the brand positioning in China and Hong Kong, leveraging our understanding of the markets. We believe that a precise and well-received brand image can effectively promote sales. We focus on an identity-driven approach that emphasizes the product characteristics of each brand.

Case study: brand positioning for Tao Ti

We were the first to market Tao Ti natural-brew ready-to-drink beverages in Hong Kong in 1996. We developed the Tao Ti brand with a view to capturing the opportunities in the RTD tea beverage market in Hong Kong. We believe that brand philosophy is key when building a successful consumer brand. We promote the concept and idea of ‘‘green and healthy’’ embedded in the Tao Ti products by various means, such as emphasizing the high quality of tea leaves used to make the tea beverage and shooting TV advertisements which showcase the tea farms. We place great importance on a continued commitment to traditions and the place of origin in our marketing campaigns for the Tao Ti products.

Meanwhile, consistent with our long-term philosophy of a ‘‘green and healthy’’ lifestyle, we empower this brand with product research, refinement and diversification and continuous introduction of more natural, healthy and functional elements in the Tao Ti product series.

We implemented various marketing campaigns together with celebrities who we believe share the same philosophy as us to promote our In-house Brands and products. We selectively choose to partner with those celebrities and artists we believe whose healthy and energetic images perfectly fit into our healthy product profile.

We have hosted a yearly ‘‘Tao Ti Green Holiday’’ program for over a decade to organize tours for our consumers to visit tea farms and other natural sceneries that resonate with our brand philosophy.

We creatively design special edition of product labels from time to time to constantly stimulate our brand awareness and promote sales. For example, we have special product labels featuring our Tao Ti Green Holiday. We also have special Christmas product labels in collaboration with our selected charity organizations.

With our branding strategies supported by our systematic marketing activities, Tao Ti became one of the most popular natural tea brands in Hong Kong.

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Case study: brand positioning for spirits and wines brand

Similarly, for spirits and wines, we are familiar with and have knowledge of the international spirits and wines brands and their unique characteristics and features. This is partly contributed by our family heritage of dealing with international wine and spirit brands for nearly 40 years. For many of our international brand partners, we believe that while preserving tradition and building more wide-spread and in-depth understanding of various wine culture is important, differentiated and localized branding strategies tailored to the local markets is also an important factor to consider when expanding overseas.

In addition to our knowledge of these international spirits and wines brands, we are also familiar with and deeply rooted in the PRC market, therefore we are able to adapt these international spirits and wines brands’ global branding strategies to the PRC local market. We also spot the increasing needs in the PRC market, particularly among the young generation with increasing purchase power and stronger willingness for upgraded consumption, and for more unconventional and bespoke products and services. Accordingly, we tailor the branding strategies of our international spirits and wines brand partners.

For example, for Jägermeister, one of our Third-party Brand Partners, as discussed with its brand owner, we aimed to shape it as a fun and young alcohol brand, with creative and spontaneous vibe. To this end, we proactively introduced more modern and diverse elements, such as cross-over and mix-and- match, in the brand building process for Jägermeister. In 2021, we launched a cross-over project in collaboration with a leading retail platform in China to sell Jägermister infused ready-to-eat crayfish, which received extensive market attention and achieved rapid growth.

Marketing and Sales Strategies Development

Our marketing team is responsible for developing marketing and sales strategies to increase brand awareness and execute branding strategies. We have designated sub-teams and experts for different brand partners, to provide professional and bespoke sales and marketing solutions. These experts specialize in various types of spirits and wines, such as red wines and whisky. According to the product specific factors, such as product nature, relevant consumption scenarios, price range and targeted markets, our experts can provide tailor-made and localized sales and marketing advice and proposals to the Third-party Brand Partners, which aim to bridge the potential gap between the international brand’s overall and global brand image and strategies and the local preferences and demand in the PRC market, and to achieve successful sales increases in the PRC market.

In addition, our marketing team actively partners with our sales team to visit the on-trade and off- trade customers, to establish and enhance our business connection, by providing professional advice and marketing insight. Our dedication in marketing contributes to our rapidly increased sales in China during the Track Record Period.

Our marketing team consists of 53 professionals in Hong Kong and 46 professionals in the PRC, headed by our team leaders with an average industry experience of 25 years. In particular, we are experienced in the Hong Kong on-trade market, which brings us advantages in terms of brand education, product positioning and penetration. We believe that the on-trade outlets are better-placed to create a sense of prestige and therefore, greatly help our efforts for product positioning and penetration,

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Every year, we actively bring to each brand partner our sales and marketing plans, and agree with them on the marketing budget plan. The brand partners will share with us the marketing expenses spent on their respective brands and products promotion in the proportion and capped amount agreed between us. Such budget plan is subject to various factors, such as the brand partner’s overall budgeting and marketing strategies in China, the complexity of the marketing campaigns we deploy and the number of brands involved.

Marketing Activities

We conduct marketing activities to promote the beverage products we offer. We believe these marketing activities attract consumers to explore our beverage product portfolio and encourage beverage appreciation. Digital and social media offer new opportunities for communication for brand owners, producers and their stakeholders. We deploy a combination of online and offline efforts to create distinct brand messages and execute marketing and sales strategies.

During the Track Record Period, we incurred advertising and marketing expenses in the aggregate amount of approximately HK$136.6 million, HK$149.9 million and HK$145.2 million, respectively, among which approximately 47.0%, 55.1% and 52.2%, respectively, were borne by our Third-party Brands partners and approximately 53.0%, 44.9% and 47.8%, respectively, were borne by us. Accordingly, during the Track Record Period, we recorded advertising and marketing expenses of HK$72.5 million, HK$67.4 million and HK$69.4 million, respectively.

Omni-channel Market Reach

We promote our products through traditional media channels, such as billboards and LED displays. We also promote these products with the support of celebrity engagements and advertising placements through local television commercials, newspapers, magazines, outdoor advertisements and advertisements on buses, trams and inside MTR stations to attract customers.

As digital media have had significant influence on consumers’ spending behavior in recent years, we leverage the influence of leading online social media platforms, such as TikTok and WeChat, to advertise our products and expand our market reach. We place advertisements in short-form video content on TikTok to educate adult consumers about wines and whisky to increase appreciation of our products, thereby increasing brand awareness and consumers’ stickiness. WeChat allows direct interaction with consumers which we believe will enhance brand awareness and cultivate loyal consumer bases for our products. We also market our products at the headline locations of e-commerce platforms, such as HKTVmall.com, to increase exposure and promote our products during regular periods and sales promotions.

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We place advertisement via social media platforms, such as Facebook, Instagram, Tik Tok and YouTube. We also strategically engage public figures, such as celebrities and KOLs, to promote our products and increase product exposure and brand awareness on social media platforms such as Facebook, Instagram and YouTube. We constantly update our advertisements that fit our products and sales strategies in order to maintain and raise consumer awareness. In order to attract consumers, we also invited KOLs to take creative, playful and fun photos or videos of our products, and post then on their social media accounts.

Promotion Campaigns

We also partner with our business partners from time to time in promotion campaigns to increase product exposure and elevate brand awareness. Our promotion campaigns typically include sample tasting, promotional discount, cross-over merchandise distribution, lucky draw and gifts.

We also leverage our connection with our on-trade customers and host special events for the spirits and wines we offer. For our industry, we believe promotional campaigns, particularly with creative features, can directly benefit our sales. Over the years, we have partnered with our on-trade customers to launch numerous creative product campaigns, such as some popular drinking games, alcohol fun pairing and mixing and brands cross-over.

In 2021, we launched an innovative cross-over project in collaboration with a leading retail platform in China to sell Jägermister infused ready-to-eat crayfish (‘‘野格冰醉小龍蝦’’), which received extensive market attention and achieved rapid sales growth. We promoted the Jägermister infused ready- to-eat crayfish on various short video or social media platforms in collaboration with various KOLs. During the promotion period, virtual and fun content related to the Jägermister infused ready-to-eat crayfish was intensively circulated on popular social media platforms such as TikTok, Xiaohongshu and Kuaishou. We also organized offline promotion gatherings to further promote sales and consumer awareness.

Regular Review of Performance and Adjustment

We review the sales performance of our products regularly, and adjust our marketing and sales strategies and execution as necessary. We collect data from our in-house ordering and sales records, inventory reports from our regional wholesalers, and feedback from our on-trade and off-trade customers. We evaluate the effectiveness of our marketing activities and report to our Third-party Brand Partners regularly as well.

In addition, our sales team maintains close contact with our on-trade and off-trade customers, regional wholesalers and dealers to monitor their sales performance and provide sales advice and support as appropriate.

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PRICING

We adopt roughly the same pricing policy for both In-house Brand Products and Third-party Brand Products. We price our products based on various factors, primarily including product positioning, sales channels involved and competition. For our In-house Brand Products, we additionally take into consideration our production costs, and for Third-party Brand Products, we additionally take into consideration the global pricing strategies of the Third-party Brand Partners. We provide recommended wholesale price range to our regional wholesalers and dealers, and recommended retail price to our retailers. Our regional wholesalers, dealers and retailers shall not take any actions that may materially disrupt the retail prices of our products. We periodically review the implementation of our pricing strategies based on, among other things, our regular visit to various retailers.

PROCUREMENT AND SUPPLIERS

Third-party Brand Products

We purchase Third-party Brand Products from suppliers designated by the Third-Party Brand partners. The delivery of Third-party Brand Products depends on the specific shipping terms agreed between us and the suppliers. The product delivery time varies depending on primarily the origin of products ordered.

In-house Brand Products

For our In-house Brand Products, we primarily rely on our production partners for their production. We actively participate in every step of the production process of our production partners, from raw material supplies to product R&D and quality control. We implement systematic and consistent quality control measures to ensure our product quality. As of the Latest Practicable Date, we had four production partners for our In-house Brand Products production.

Production Partners

We carefully select our production partners based on, among other things, their qualification and experience, reputation, production capacity, quality control measures and our cooperation history. During the Track Record Period, we had two production partners located in Taiwan and two production partners located in China, which have on average cooperated with us for over 10 years. From time to time, we may engage additional production partners to produce seasonal products. We maintain stable business relationships with our production partners.

We enter into production contracts with our production partners. We set forth below the salient terms of our production contracts with production partners:

. Duration: typically three to five years.

. Minimum production volume: we generally set minimum production volume taking into consideration the minimum order quantity of our production partners, our inventory levels and our sales forecast.

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. Quality control: Our production partners possess ISO20002 certification. Our quality assurance team would inspect quality of the products on site.

. Product delivery: We are responsible for the costs of delivering the In-house Brand Products to our warehouses.

. Product return: In the event that there is product quality issue and such issue is attributable to the production partner, we are entitled to product return, refund and compensation.

. Payment: The transaction amounts shall be settled on monthly basis.

. Exclusivity: Our production partners usually do not service us exclusively.

. Confidentiality: Production partners are subject to confidentiality clauses in the production contracts, particularly with respect to the recipe and industry know-how we own.

. Renewal and termination: The production contracts are renewable upon negotiations between parties. Each party may unilaterally terminate the production contracts with written notice upon, among other things, (i) a party committing a material breach of the contractual provisions and failing to remedy the breach within 10 days of the non-breaching party’s request of remedial actions, (ii) during inspection of trial products, we discover the products produced do not comply with quality requirement or the production facilities of production partners are not fit to produce our products, and (iii) one party having undergone, or anticipating to undergo, major change in terms of its business or operation, such as liquidation, or bankruptcy.

Raw Materials

We believe that quality raw materials are essential to maintain product tastes and uphold our product quality and value proposition. Therefore, we strive to directly control every step of the supply of key raw materials from the source to our production partners for better quality control, covering sourcing raw material suppliers, negotiating prices, conducting quality check, and placing orders for delivery.

For In-house Brand Products

We select raw materials used in the production process and negotiate with raw materials suppliers on the terms for the production manufactures. Typically, we source for our production partners. Major raw materials used in our In-house Brand Products, including tea leaves, water and various botanical ingredients. In addition, we also source packaging materials such as labels and cardboard products for our production partners. The designated raw materials suppliers will typically enter into sales agreements with our production partners and deliver the raw materials to our production partners directly.

Tea leaves are the essential raw materials used in our In-house Brand Products. We test and monitor the condition of tea leaves to ensure the quality of our In-house Brand Products. Tea leaves used in our natural, healthy and functional products are from Taiwan and China.

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For In-house Postmix Production

For the production of postmix at our production facilities, the major raw materials used include sugar and beverage concentrate.

Raw Materials Prices

Most of our raw materials are commodities, the prices of which may fluctuate with market conditions. For tea leaves, its price may additionally be subject to the weather of the year. During the Track Record Period, fluctuation of market prices of our raw materials did not materially impact our costs of raw materials. For more information, see ‘‘Industry Overview — Raw Material Analysis.’’

Management of Production Partners

We actively participate in every step of the production process of our production partners, from raw material supplies to product R&D and quality control. We have on-site teams at the production sites of all of our production partners to implement our systematic and consistent quality control measures at every step of the production process.

We generally select raw material suppliers and negotiated the prices for our production partners. Our production partners are required to order raw materials from our designated raw materials suppliers at the price we agree. Raw material suppliers generally deliver the raw materials to the production partners directly.

Our on-site teams will help to inspect the quality of the raw materials, particularly the tea leaves, when they arrive. Further, our on-site teams will monitor the production process and conduct quality checks of the finished products before they are delivered to our designated warehouses.

Capitalizing on our in-house product R&D capability, we provide our proprietary product recipes to the production manufacturers, addressing various tastes and preference of the consumers. The production partners are required to maintain absolute confidentiality of our proprietary product recipes. Quality of our In-house Brand Products, particularly the Tao Ti products, largely depends on the quality of the tea leaves, which is subject to various factors, such as weather.

Top Five Suppliers

During the Track Record Period, our purchases from our top five suppliers amounted to HK$405.6 million, HK$654.8 million and HK$656.0 million, respectively, accounting for 44.7%, 55.7% and 49.0% of our total purchases, respectively. During the same period, our purchases from our largest supplier accounted for 11.2%, 27.6% and 24.2% of our total purchases in the relevant year, respectively. Our top five suppliers during the Track Record Period include our Third-party Brand Partners and a production partner.

As of December 31, 2020, the business relationships with our five largest suppliers ranged from 6 years to 13 years.

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To the best knowledge and belief of our Directors, none of our Directors or their respective close associates or any of our Shareholder (who to the knowledge of our Directors owned more than 5% of the issued share capital) had any interest in our five largest suppliers during the Track Record Period.

RESEARCH AND DEVELOPMENT

We pursue excellent product quality and are determined not to compromise product quality and taste. We possess in-house product R&D capability for soft beverage products. Specifically, we have a joint task force consisting of our management team, marketing personnel and beverage specialists to develop new products that lead the consumer trends for healthy soft beverages with natural ingredients and fresh tastes.

We take pride in our R&D efforts and achievements. In 2018, 2019 and 2020, we launched 31, 29 and 31 new products, respectively, to cater to evolving consumer needs. We have accumulated a large pool of product recipes with proven track records, and we believe that this is essential for our business development. This enables us to launch new products appealing to the consumers within a short period of time.

Our R&D team is primarily responsible for expanding and diversifying our product portfolio by developing and introducing new flavors, preserving the taste of our tea beverages, and enhancing our production techniques. In recent years, we have focused on launching more healthier soft beverages with the additional herbal extracts, to continue to lead the market trend towards a healthier lifestyle. Our R&D team also focuses on the design and packaging of the In-house Brand Products to amplify the appeal of the products and our corporate value and philosophy, as well as to enhance consumers’ experiences.

Further, our R&D team is devoted in making our ‘‘green and healthy’’ concept into commercially viable products and to enhance and upgrade our existing products. A product development cycle typically involves (i) sourcing raw materials for trial production, (ii) product tasting by our R&D specialists and industry experts, (iii) accelerated shelf life testing, (iv) trial production, and (v) mass production.

During the Track Record Period, our R&D expenses amounted to HK$2.1 million, HK$2.3 million and HK$2.4 million, respectively.

PRODUCTION

We also possess in-house production capacity in Hong Kong. During the Track Record Period, we produced postmix for several world-renowned soft drink brands, with their proprietary recipes, to be offered in fast food restaurants and convenience stores. During the Track Record Period, revenue from production and sales of postmix only accounted for approximately 2.3%, 2.1% and 2.1% of our total revenue, respectively.

Production Site and Utilization Rate

We lease one production site in Yuen Long, Hong Kong for postmix production, with an aggregate designed production capacity of 200,000 KEGs per year on the basis of one shift of eight hours per day only. During the Track Record Period, utilization rate, calculated as the actual production volume of the

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INVENTORY MANAGEMENT

During the Track Record Period, our inventory consists of primarily finished goods and to a lesser extent raw materials. The finished goods represent the Third-party Brand Products procured from our brand partners and the In-house Brand Products that we order from the production partners. The raw material represents primarily sugar and beverage concentrate used for our postmix production. We generally maintain our inventory at approximately two-month level, which is the estimated amount of inventories we consider necessary to meet any increase in demand for products, and to ensure that there are no disruptions in supply of products to our customers. We plan our inventory level based on actual and anticipated orders received from our customers. Once the finished products are produced, we endeavor to deliver them to our customers as soon as possible and consume our inventory on a first-in- first-out basis.

We believe that we manage our inventory at a reasonable level based on historical sales and management’s assessment, which minimizes storage space and carrying costs, enhances working capital efficiency and reduces the risk of deterioration of products while in storage, which is especially important for our stringent quality control policy. Therefore, we typically do not maintain substantial inventory levels for finished goods except during periods leading up to festivals and holidays, such as Chinese New Year. During these periods, our customers will begin stocking our products in anticipation of the increased demand from consumers, and therefore place larger purchase orders with us.

In order to maintain accurate inventory records, for special SKUs or SKUs with high value, we may conduct regular inventory counts with an aim to addressing any problems immediately. We also conduct full inventory counts and assess the effectiveness of our historical inventory levels on a regular basis.

To reduce the risk of obsolete inventories, we keep track of the inventories consumption level capitalizing on our ERP system, and strive to accelerate the sales and consumption by, among other measures, sales promotion.

LOGISTICS AND WAREHOUSING

Logistics

In Hong Kong, we have a dedicated logistics team consisting of 70 staffs and 25 trucks in Hong Kong, responsible for delivery of our products to our customers throughout Hong Kong.

In China, for our Third-party Brand Products, delivery of the Third-party Brand Products may be arranged by the supplier or us, depending on the specific shipping terms agreed. For In-house Brand Products, our production partners typically will arrange delivery of products to our designated warehouses in China. We will then arrange third party logistics and warehousing services providers to deliver our products to our customers in China at our cost.

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Warehousing

We lease and operate our production site and warehouse in Yuen Long, Hong Kong with the GFA of approximately 15,321 square meters. We lease another warehouse with the GFA of approximately 1,740 square meters in Yuen Long, Hong Kong, which is operated by a third party warehousing service provider.

In addition to the warehouse in Hong Kong, we also have access to the warehouses operated by third party logistics and warehousing services providers in China and pay the relevant fees by usage. As of the Latest Practicable Date, we have access to four warehouses in Shanghai, one warehouse in Dongguan and one warehouse in Beijing, with an aggregate GFA of approximately 34,710 square meters. We consider this approach minimizes our capital expenditure on logistics and warehouses and can cost-effectively absorb any sudden surge in demands.

QUALITY CONTROL

We maintain a quality control program to ensure that we produce high quality products on a consistent basis, which complies with all applicable legal requirements, covering the raw material and packaging material supply chain, product manufacture, storage, logistics and sales. We strive to maintain our product image and consumer confidence in our products. We carefully select our raw materials suppliers and production partners. We monitor the quality of beverages we produce, packaging materials and production partners. We implement policies to manage our raw materials and packaging materials regarding their regular assessment and elimination based on assessment results, in order to strictly control the quality of the materials supply. We strictly implement product safety and quality control standards, we take corresponding control measures and monitor the quality of the beverage we produce and the beverage produced by production partners, including conducting extensive testing and checking, to ensure the overall product quality. We adopt ISO22000 in our quality control operation.

We have set up a systematic and consistent quality assurance system to ensure the quality of our products. As of December 31, 2020, we had seven quality specialists responsible for the quality assurance. We obtained the certification of ISO22000 Food Safety Management System in our quality control operation. During the Track Record Period and up to the Latest Practicable Date, we did not receive (i) any fines, product recall orders or other penalties from the relevant competent authorizes regarding material product quality issues, (ii) any material products returns from our customers, or (iii) any material complaints from the consumers.

Product Safety

In order to maintain quality standards for our In-house Brand Products, we identify reliable raw materials suppliers and require our production partners to source raw materials from them. All of the raw materials used in production by our production partners are subject to our inspection, and we randomly sample and inspect our supply of raw materials in accordance with relevant standards on food safety. We dispatch our quality control personnel to be stationed on site to monitor the production process at the production facilities of our production partners. We conduct sample checks for every batch of finished products to ensure that they meet relevant standards on visual appearance, product quality and food safety.

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For Third-party Brand Products, we require our brand partners to provide us with the relevant certifications or qualifications of the products before purchasing from them. Our specialist will also examine the content of ingredients of the Third-party Brand Products provided by our brand partner to ensure they comply with the relevant food safety requirements.

Product Shelf Life

We set forth below the average product shelf life for each of our main product categories. In Hong Kong, we adopt a ‘‘best before’’ labeling as required by local laws and regulations, which relates to the food quality. If a product is stored properly, it can reasonably be expected to retain its specific properties up to and including the specified date on the ‘‘best before’’ label.

. Spirits and Wines: generally does not have any specific product shelf life

. Beers: generally from 4 to 24 months

. Soft beverage products: generally from 11 to 24 months

. Packaged food and snacks: generally from 6 to 12 months

Product Recall

During the Track Record Period, we were not subject to any product recall. For the Third-party Branded Products, our brand partners will take full responsibilities, including indemnifying us, in the event that the products have to be recalled due to quality issues.

LICENSES, PERMITS AND APPROVALS

We are required to maintain various approvals, licenses and permits in order to operate our business. We have obtained all material licenses, permits and approvals necessary in order to operate our business. We continually monitor our compliance with relevant requirements in order to ensure that we have all such licenses, permits and approvals as are necessary to operate our business.

SEASONALITY

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INFORMATION TECHNOLOGY SYSTEMS

We have comprehensive information technology systems, in particular the ERP and CRM systems, which integrate internal and external management information across various aspects of our business operations. These systems enable us to manage our procurement, sales and distribution, quality control, inventory and logistics, financial reporting and human resources functions.

We have set up our own internal systems and platforms to enable the efficient management of all of our software and network resources. We utilize various computer systems and platforms to assist us in areas such as financial management, supply chain management, order management, warehouse management and accounting and human resource, to support the operations of our platforms. From time to time, we may develop or procure new or upgrade existing information technology systems based on our business needs. During the Track Record Period, we did not encounter any material failure in our information technology system. However, we still face risks arising from the improper performance or malfunction of our information technology systems.

In the future, we plan to continue to invest in our information technology systems to support our business needs.

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AWARDS AND RECOGNITIONS

We have received numerous awards and recognitions since our establishment in recognition of our brand and products. The table below sets forth a summary of significant awards and recognitions that we have received during the Track Record Period:

Year Awards/Certifications Awarding Body

2020...... TopBrandsAward— Favorite Convenience Stores Brand 7Eleven Award — Tao Ti

Outstanding Brands Award — The Most Popular New PARKnSHOP Product — Tao Ti Orange Black Tea

Outstanding Brands Award — Star Supermarket Brand PARKnSHOP (Beverage Products) — Tao Ti

2019 ...... Outstanding Brands Award — Most Popular New Product PARKnSHOP — Tao Ti Supreme Meta Slim Tea

Outstanding Brands Award — Star Supermarket Brand PARKnSHOP (Beverage Products) — Tao Ti

Top Brands Award — Favorite Convenience Stores Brand 7Eleven Award — Tao Ti

2018 ...... 19th Favorite Brands Awards — Top Ten Favorite Brands Wellcome — Tao Ti

Top Brands Award — Favorite Convenience Stores Brand 7Eleven Award — Tao Ti

Outstanding Brands Award — Star Supermarket Brand PARKnSHOP (Beverage Products) — Tao Ti

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EMPLOYEES

As of December 31, 2020, we had a total of 589 employees, among which 299 were in Hong Kong and 290 were in China. The table below sets forth number of our employees by function and location as of December 31, 2020:

Function Total

Accounting...... 40 HR&Administration...... 39 IT...... 8 Logistics&Shipping...... 96 Sales&Marketing...... 363 Customerservice...... 15 R&DandQualityassurance...... 28

Total...... 589

Remuneration and Incentive

We enter into individual employment agreements with our employees in accordance with the relevant laws and regulations. Our employment agreements specify terms including, among other things, salaries, hours, overtime, leave, and termination provisions. The remuneration package of our employees mainly includes salaries, commissions and discretionary bonuses.

Training

We believe that our long-term growth depends on the expertise, experience and development of our employees. To enhance team building and collaborations between our employees, we implemented a Team Building Program. Through conducting different activities, individual’s engagement within the company, we believe that individual’s capabilities and synergy among colleagues are enhanced. We invest in building a team of talents and provide training for employees at all levels.

Recruitment

We generally recruit our employees from open job markets through advertising on professional job search website. We provide induction training to every new employee.

We have no labor union established for our employees. Our Directors confirm that we had not experienced any material dispute with our employees or disruption to our operations due to labor dispute and we had not experienced any difficulty in the recruitment and retention of employees during the Track Record Period and up to the Latest Practicable Date.

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HEALTH, WORK SAFETY, SOCIAL AND ENVIRONMENTAL MATTERS

We have established procedures to provide our staff with a safe and healthy working environment by providing health and safety training, with separate training for production staff.

We are subject to different environmental legislation and controls in Hong Kong. These environmental laws mostly relate to the conformity of our operating procedures with environmental standards regarding, among other things, the discharge of liquid effluents. See ‘‘Regulatory Overview — Hong Kong — Laws and Regulations Relating to Environmental Protection’’ for more details. We believe that the regulatory climate in Hong Kong is becoming increasingly strict with respect to environmental issues and expect this trend to continue in the future. Achieving compliance with applicable environmental standards and legislation may require capital expenditures. Laws and regulations may also limit the disposal of waste, as well as impose waste treatment and disposal requirements.

We do not operate in a highly pollutive industry and our production process of postmix does not involve material emission of noise, general solid waste, exhaust gas or wastewater. The sewage of our production site in Yuen Long is connected to Yuen Long Sewage Treatment Works, which is a communal sewer maintained by the government of Hong Kong. We have adopted specific environmental protection measures to make our operations more energy efficient and environmentally friendly and to responsibly manage the environmental impact of our operations.

In addition, as part of our energy saving and environmentally friendly initiative, we have installed solar panels at our production facility in Hong Kong to generate electricity for use in our production process. The surplus electricity generated from such solar panels will be sold to an Independent Third Party, and generate additional income for us.

Our Directors expect that our Group will not directly incur significant costs for compliance with applicable environmental protection rules and regulations in the future. Our Directors further confirm that our Group had not been involved in any material non-compliance issues in respect of any applicable laws and regulations on environmental protection during the Track Record Period and up to the Latest Practicable Date.

During the Track Record Period and up to the Latest Practicable Date, our Group had not experienced any significant incidents or accidents in relation to workers’ safety. Furthermore, our Directors confirm that we had not been subject to any material claim, whether for personal or property damage, or penalty in relation to health, work safety, social and environmentalprotectionandhadnot been involved in any accident or fatality and had been in compliance with the applicable laws and regulations in all material aspects during the Track Record Period and up to the Latest Practicable Date.

We plan to adopt and implement additional policies on environment, social and governance consistent with industry standards and in compliance with the requirements of the Listing Rules within a period of 12 months from the [REDACTED]. For example, we plan to establish additional internal training programs on environment, social and governance compliance requirements, regulatory updates and practicable points to our employees within a period of 12 months from the [REDACTED].

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CORPORATE SOCIAL RESPONSIBILITIES

We are committed to the development of corporate social responsibility. We believe that, it has a positive impact on the communities in which we do our business. Our core values are the foundation upon which we have built and will continue to build a better society.

No drinking and driving: we offer alcohol, yet the first lesson we give our employees in their welcome training pack and employee manual is no drinking and driving. We promote among our employees personal responsibility for keeping our shared roadways safe and going home safe.

Christmas label in cooperation with charity organizations: since 2009, to make our special edition of product labels for Christmas more meaningful, we started cooperating with a different charity organization each year by contributing a donation. The below shows our Christmas special edition product labels from 2009 to 2018:

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009

Principal Hong Kong Centre for HK Paws New Life SILENCE Andy Lau Heep Hong Helping Hand Children’s ORBIS Make A Chan Free Alzheimer’s Sign Guardian Psychiatric Charity Society Cancer Wish Tutorial World Disease Linguistics & Rehabilitation Foundation Foundation Association Deaf Studies Association Limited

INSURANCE

We maintain insurance policies which cover, among others, employees, public liability, property, product liability, logistics and certain other risks.

Our Directors consider that our insurance coverage is adequate and consistent with industry norm. Our Directors confirm that we did not make and were not subject to any insurance claims that would have had a material adverse impact on our business, financial condition or results of operations during the Track Record Period and up to the Latest Practicable Date. For details of the risk relating to our insurance coverage, see ‘‘Risk Factors — Our insurance coverage may be insufficient to cover all of our potential losses.’’

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PROPERTIES

Leased Properties

Our corporate headquarters are located in Hong Kong. As of December 31, 2020, we did not own any properties. In Hong Kong, we leased (i) one property with a GFA of approximately 15,321 square meters for production and warehouse purposes, (ii) one property with a GFA of approximately 1,740 square meters for warehouse purpose, and (iii) one property with a GFA of approximately 1,519 square meters for office purpose. In China, we leased eight properties with an aggregate GFA of approximately 3,389 square meters for office and commercial purposes.

[REDACTED]

Non-registration of Lease Agreements in the PRC

We had not registered the lease agreements in respect of five out of eight of our leased properties (accounting for approximately 83.04% of the aggregate GFA of our leased properties in China) with the relevant competent authorities in accordance with applicable PRC regulations. As advised by our PRC Legal Advisor, according to the Civil Code of the PRC《 ( 中華人民共和國民法典》), failure to register such lease agreements would not affect the validity and enforceability of such lease agreements. However, if we and the lessors fail to register such lease agreements as required by the relevant competent authorities, we may be subject to a fine of RMB1,000 to RMB10,000 for each of the unregistered lease agreement. As of the Latest Practicable Date, we had not been subject to any administrative penalties by the relevant competent authorities, and the amount of potential penalties of approximately RMB5,000 to RMB50,000 accounts for a minimal portion of our total revenue during the Track Record Period.

We believe that the reasons behind the failure to register the above lease agreements are beyond our control because, among other things, the lessors’ willingness to cooperate in the registration process and provision relevant documents for registration is necessary. In order to minimize the potential negative impact of the above lack of registration of lease agreements, we have continued to maintain regular communications with such lessors seeking their cooperation to complete a late registration of the relevant leases. In addition, we have established internal guidelines and enhanced our internal control procedures requiring us to seek the landlord’s agreement to register lease agreement before signing in order to ensure compliance with applicable PRC laws and regulations. As advised by our PRC Legal Advisor, the defects of such leased properties would not materially and adversely affect our business.

Our Directors are of the view that the failure to register lease agreements as set out above would not materially and adversely affect our business operations, considering that (i) we would be able to relocate to a different site easily should we be required to do so given the leased properties are not

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INTELLECTUAL PROPERTY RIGHTS

Our intellectual property portfolio consists of trademarks and domain names. Our intellectual property is important to our business, such as trademarks in respect of Tao Ti and Meko. For details of the intellectual property rights which are material to our business, see ‘‘Appendix IV — Statutory and General Information — B. Further Information About Our Business — 2. Intellectual Property Rights.’’

We undertake a proactive approach to manage our intellectual property portfolio. Our business department is responsible for performing regular monitoring of our intellectual rights. We take actions when we are aware of a potential infringement of our intellectual property rights, including among other measures, filing a trademark dispute.

As of the Latest Practicable Date, we were not aware of any material infringement of intellectual property rights owned by us, and our Directors confirm that there were no material disputes or litigation regarding the intellectual property rights owned by us during the Track Record Period and up to the Latest Practicable Date.

Our Directors also confirm that no claim or litigation proceedings had been instituted against us in respect of any alleged infringement of intellectual property rights of any third party during the Track Record Period and up to the Latest Practicable Date. During the Track Record Period and up to the Latest Practicable Date, there had not been any pending or threatened claim made against us, nor had there been any claim made by us against third parties, with respect to the infringement of intellectual property rights owned by us or third parties.

Trademark Assignment

LEGAL PROCEEDINGS AND COMPLIANCE

Legal Proceedings

As of the Latest Practicable Date, we were not engaged in any claims or litigations or arbitration proceedings of material importance and no litigation or claim or arbitration proceeding of material importance is known to our Directors to be pending or threatened against any member of our Group.

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The table below sets forth a summary of incidents of non-compliance with applicable laws and regulations during the Track Record Period. Our Directors believe that the incidents of non-compliance will not have a material adverse impact on our business, financial condition or results of operations.

Reasons for Legal consequences and Rectification and Potential operational Non-compliance incidents the non-compliance incidents potential maximum penalties preventive actions taken and financial impact

1. The use of 2nd Floor, Tower A, By a lease agreement dated September 16, Regarding the non-compliance of the By a letter dated June 21, 2021, Our Directors are of the view that in the event that the Waiver is not Regent Centre, 63 Wo Yi Hop 2008, Telford International first rented the government lease: Cushman & Wakefield Limited has obtained: (i) our operational and financial performance will not be Road, Kwai Chung, New Office Headquarters from an Independent applied to the Lands Department on materially and adversely affected, as (a) Counsel Chong is of the view Territories, Hong Kong (‘‘Office Third Party (the ‘‘Old Landlord’’). The As advised by Mr. Patrick K. C. CHONG, behalf of Richmen for a temporary that enforcement action by the Government, if any, will be taken Headquarters’’) as our Office Headquarters was sold and assigned by Barrister-at-Law in Hong Kong (‘‘Counsel waiver (‘‘Waiver’’) so as to change the against Richmen; and (b) in any event, any costs we may incur as a ’’ ‘‘ headquarters during the period the Old Landlord to Richmen on March 31, Chong ), in the event the government of user of our Office Headquarters from result of theWARNING relocation of our headquarters will be indemnified by our from September 16, 2008 up to 2010 (the current landlord). We have since Hong Kong (the ‘‘Government’’) decides to industrial to office for headquarters or Controlling Shareholders; and (ii) our operations will not be materially the Latest Practicable Date had then continued to occupy the Office take enforcement action, it will be taken back-office operations. As of the Latest and adversely affected even if our headquarters is relocated, as our been in breach of (i) the land Headquarters. Our Group and Richmen were against Richmen (as the landlord) instead of Practicable Date, the Waiver has not headquarters is merely used as our back office and we have business use restriction set out in the not aware of this non-compliance incident as Telford International. However, there will be been granted by the Lands Department continuity plans allowing each department to restore its critical business relevant government lease; and both our Group and Richmen mistakenly a chance for Telford International to be but our Directors were not aware of any processes in short order in the event of a change in work location. ’’ (ii) the user restriction set out believed that our Office Headquarters could ordered by Richmen to stop using our Office indication that such Waiver will be BUSINESS

in the relevant deed of mutual be used for office purposes as it appeared Headquarters for office purposes. When rejected by the Lands Department. DOCUMENT. THIS OF COVER THE ON

– covenant (‘‘DMC’’). The land that most of the units in the Regent Centre necessary, the Government may enforce the use was restricted to industrial were used for office purposes. The entire set government lease including re-entering our We have implemented additional internal 164 or godown purposes or both up as well as the appearance of the main Office Headquarters. Nonetheless, as the control measures (which are set out under the government lease; and lobby of Regent Centre give an impression Government acts in its private capacity as a below) to ensure our ongoing compliance factories or godowns or both that Regent Centre is a commercial building. landlord when dealing with leases conditions, with government leases, deeds of mutual – under the DMC. Accordingly, it was not obvious to us that we non-compliances with the government lease is covenant, occupation permits and other would have committed this non-compliance a civil matter and will not attract any applicable laws and regulations. incident by using our Office Headquarters as criminal sanction. Therefore, our Directors or our headquarters. the directors of Telford International (as the Our Controlling Shareholders have agreed tenant of our Office Headquarters) will not be to indemnify us for all fines, penalties, This non-compliance incident was only subject to any criminal sanction for any non- losses and costs which we may incur, identified and made known to our Directors in compliance of the government lease. suffer or accrue, directly or indirectly the course of the due diligence exercise from or on the basis of or in connection conducted by the professional parties during Regarding the non-compliance of the DMC: with this non-compliance incident. the course of preparation for the [REDACTED]. This non-compliance incident According to Counsel Chong, just like the was not wilful and was due to the reasons government lease, there is no criminal above. sanction in the breach of the DMC. The manager of Regent Centre may apply for an injunction restraining Telford International from using our Office Headquarters for office purposes. HSDCMN SI RF OM NOPEEADSBETT HNEADTA H NOMTO UTB EDIN READ BE MUST INFORMATION THE THAT AND CHANGE TO SUBJECT AND HEADED INCOMPLETE SECTION FORM, THE WITH DRAFT CONJUNCTION IN IS DOCUMENT THIS

2. During the Track Record Period, This is mainly due to the needs and requests AccordingtoInterimRegulationonthe The relevant employees who requested Our Directors are of the view that our operational and financial Telford Shenzhen and Telford of the relevant employees, as all of them Collection and Payment of Social Insurance theuseoftheRemotePayment performance will not be materially and adversely affected, as the Wine & Spirits (S) have were not residing at the place of registration PremiumsandRegulationonthe Arrangement have signed the relevant Social Insurance and Housing Provident Fund Authorities instructed third-party human of our relevant PRC subsidiaries. They can Administration of Housing Provident Funds, if confirmation letters confirming that they normally accept the Remote Payment Arrangement, and would only resources agencies to pay social enjoy the social security and housing funds an entity fails to pay the social insurance would not file any complaint or instigate instigate investigation against our relevant PRC subsidiaries if the insurance premiums and housing entitlements only if such social insurance premiums or housing provident funds in its any labor arbitration in respect of this relevant employees file a complaint to the relevant Social Insurance provident funds for certain premiums or housing provident funds are paid place of registration, the competent authorities non-compliance incident (the and Housing Provident Fund Authorities. employees in cities where they in the cities where the employees are shall order the entity to make payments ‘‘Confirmations’’). physically resided and worked physically located. within the prescribed time limit. The lookback On the basis of (i) we have fully paid the amount of social insurance instead of the place of period for any underpayment is two years, so Further, based on the interviews premiums and housing provident funds for the employees but through a registration of our relevant PRC in the case of our relevant PRC subsidiaries, conducted by our PRC Legal Advisor third party other than by ourselves, which shows that we have no subsidiaries (being the the amount which may be payable in respect with the relevant authorities of social intention to avoid our duty to pay the social insurance premiums and employer), which was in breach of the past two years is approximately insurance and housing provident funds housing provident funds; (ii) as of the Latest Practicable Date, we have of Interim Regulation on the RMB1.8 million for the housing provident (‘‘Social Insurance and Housing not received any notification from relevant Social Insurance and Collection and Payment of funds and approximately RMB3.2 million for Provident Funds Authorities’’), the Housing Provident Funds Authorities requiring us to rectify the Remote Social Insurance Premiums (社 the social insurance premiums, respectively. Social Insurance and Housing Provident Payment Arrangement; (iii) during the Track Record Period and up to 會保險費徵繳暫行條例)and Furthermore, in the case of social insurance Fund Authorities normally accept the the Latest Practicable Date, we had not been subject to any Regulation on the payment, if the entity fails to pay within the Remote Payment Arrangement and would administrative penalties, material litigations and legal proceedings, nor Administration of Housing prescribed time limit, it shall, in addition to only instigate an investigation against our were we aware of any employee complaints nor been involved in any Provident Funds (住房公積金管 paying the sum it owes or underpays, pay a relevant PRC subsidiaries if the relevant labor disputes with our employees with respect to the Remote Payment 理條例 ‘‘ ‘‘ )( Remote Payment late payment fine of 0.2% per day computed employees file a complaint to the Arrangement;WARNING (iv) our relevant PRC subsidiaries have obtained written Arrangement’’). Such Remote from the date when the amount becomes relevant Social Insurance and Housing confirmations from competent local government authorities which Payment Arrangement is not overdue. Provident Fund Authorities. Depending confirmed that no penalties had been imposed on us with respect to permitted under the existing on the outcome of the investigation, the social insurance and housing provident funds during the Track Record PRC regulations. relevant Social Insurance and Housing Period; and (v) we have conducted interviews with the relevant Social Provident Fund Authorities might demand Insurance and Housing Provident Fund Authorities confirming that they ’’ our relevant PRC subsidiaries to make wouldBUSINESS not instigate any investigation against us unless the relevant the payment at the place of their employees DOCUMENT. THIS OF COVER THE ON file a complaint in respect of the Remote Payment

– registration and pay the sums they owe Arrangement; and (vi) all the relevant employees have signed the or underpay in the past two years, while Confirmations confirming they would not file any complaint or instigate 165 a fine will normally not be imposed. any labor arbitration in respect of the Remote Payment Arrangement, our PRC Legal Advisor is of the view that the likelihood of our We have implemented additional internal relevant PRC subsidiaries being required to pay the relevant social – control measures (which are set out insurance and housing provident funds in respect of the employees below) to ensure our ongoing and future opting for the Remote Payment Arrangment at the place of their compliance with social insurance premiums and housing provident funds contribution requirements in full.

Our Controlling Shareholders have also agreed to indemnify us for all fines, penalties, losses, and costs which we may incur, suffer or accrue, directly or indirectly from or on the basis of or in connection with this non-compliance incident.

registration and the sums they owe or underpay in the past two years is remote.

Further, based on the above, our Directors are of the view that the non-compliance incident of our relevant PRC subsidiaries will not have a material adverse impact on our Group’s business, financial condition or results of operations and therefore, no provision has been made. THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. BUSINESS

We [have established] an internal control committee and designated Mr. Kenneth Fong, our chief executive officer, who will be responsible for monitoring our ongoing compliance with the relevant Hong Kong and PRC laws and regulations that govern our business operations and overseeing the implementation of any necessary measures. In addition, we provided the Directors and the senior management of our Company a training session conducted by the Hong Kong legal advisor of our Company on the responsibilities and duties of Directors, and updates regarding the relevant Hong Kong and PRC laws and regulations with a view to proactively identifying any concerns and issues relating to potential non-compliance. Our internal control committee will be responsible for ensuring our overall ongoing compliance.

To ensure our Group’s compliance with the applicable laws and regulations, and to prevent the recurrence of the above non-compliance incidents, we have implemented and/or will continue to implement the following measures:

With respect to the Office Headquarters

. If the initiation of (i) a new leasing arrangement; or (ii) an acquisition of property is agreed by our Board, Mr. Kenneth Fong, our chief executive officer, will be designated as the representative of our Group to negotiate the lease terms or acquisition terms. We will seek external legal advice to ensure our intended use of the properties will comply with the government lease, the occupation permit as well as the DMC (if any) in relation to the property and to advise on the relevant lease agreement or property sale and purchase agreement before it will be signed by a Director. We will also ensure that all agreements entered will (if applicable) be properly registered at the relevant governmental authorities and to ensure the due payment of all applicable registration fees and stamp duties;

. Physical inspection of property will be performed by a professional party (such as an architect or a surveyor who will be an authorized person whose name is on the authorized persons’ register kept under section 3 of the Buildings Ordinance (Chapter 123 of the Laws of Hong Kong)) to check whether there is any illegal structure, as well as whether our intended use of the property is within the permitted use for the property. A member of the senior management team of our Group will be present throughout such physical inspection; and

. Our Group will request the property agent to conduct a land search on the relevant property to ascertain the title and ownership of the relevant property. Alternatively, a land search can be conducted through our retained legal advisors and the relevant documents will be filed together with the relevant lease agreement or property sale and purchase agreement for internal control purposes. We will engage external legal advisors to advise us on all our property transactions and pay special attention to the permitted use of the property before entering into any property transactions.

With respect to the Remote Payment Arrangement

. Our Group will obtain Confirmations from the relevant employees of our relevant PRC subsidiaries who request the use of the Remote Payment Arrangement;

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. The human resources department of our PRC subsidiaries will organize information sessions for our PRC employees and urge them to make contributions/payments in accordance with relevant social security and housing provident fund laws and regulations;

. The manager of the human resources department of our PRC subsidiaries will regularly communicate with our external counsel to understand whether we are at risk of material non- compliance with the relevant social insurance and housing provident fund laws and regulations;

. Regular reports regarding the number of employees using the Remote Payment Arrangement will be provided to Mr. Vincent Fong, our chief executive officer (China), with a view to helping our senior management to manage the number of employees using such arrangement; and

. The manager of the human resources department of our PRC subsidiaries will report to Mr. Vincent Fong, our chief executive officer (China), on the legal and regulatory compliance and provide improvement recommendations as and when appropriate and/or required, and our PRC subsidiaries intend to gradually cease the Remote Payment Arrangement. We intend to implement an internal policy as soon as reasonably practicable after the [REDACTED] which requires our PRC employees to strictly follow the relevant laws and regulations regarding social insurance and housing provident fund payments.

With respect to our ongoing compliance generally, we have implemented and expect to continue to implement the following internal control measures to ensure our compliance with applicable laws and regulations and to enhance our internal control:

. Internal control system manuals on corporate governance, operations, management, legal matters, finance and auditing setting out the internal approval and review procedures pursuant to which our employees are mandated to comply with;

. Supervision and guidance by our Audit Committee, which is empowered to provide an independent view of the effectiveness of the financial reporting process, internal control and risk management systems of our Group and the relevant audit processes;

. Hiring additional personnel to support our continued growth and development including candidates with professional experience and qualifications; and

. Engaging external professional advisors (including our compliance advisor, as well as legal advisors as to Hong Kong laws, PRC laws and laws of the jurisdiction(s) in which we may expand our operations, and tax advisors) to provide professional advice and guidance to our Group to ensure compliance with applicable laws and regulations. We will also arrange our external professional advisors to provide internal trainings to our Directors, senior management and employees from time to time to ensure our Directors, senior management and employees are kept up-to-date with any legal and regulatory developments.

Taking into account the above internal control measures implemented by us, the ongoing monitoring and supervision by our Board with the assistance from professional external advisors where required, and the fact that, as confirmed by our Directors, the above non-compliance incidents did not involve any fraud or dishonesty, our Directors are of the view that (i) our enhanced internal control

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RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS

Our Directors are responsible for formulating, supervising and overseeing the effectiveness of our risk management system and implementation of our internal control systems to ensure our compliance with applicable laws and regulations and to enhance our internal control:

. We have internal control system manuals on corporate governance, operations, management, legal matters, finance and auditing setting out the internal approval and review procedures to which our employees are mandated to comply with;

. We are hiring additional personnel to support our continued growth and development including candidates with professional experience and qualifications;

. Each of the Directors and the senior management of our Company have attended a training session conducted by the Hong Kong legal advisor of our Company on the responsibilities and duties of Directors;

. We have appointed Ms. Ng Kit Ying as our company secretary and most of our Hong Kong subsidiaries’ company secretary to oversee our day-to-day compliance matters of our Group, and have discussed with her the importance of ensuring compliance with applicable legal, regulatory and financial reporting requirements and were assured that she will ensure the ongoing compliance of our Group of the relevant requirements;

. We [have appointed] three independent non-executive Directors who have experience in finance, accounting and management. We will be able to draw on their experience with respect to the compliance with applicable legal, regulatory and financial reporting requirements;

. Our chief financial officer, Ms. Lucia Fong, will be responsible for monitoring the implementation of our new and existing internal control procedures. Ms. Lucia Fong has been responsible for our Group’s financial operations. See ‘‘Directors and Senior Management’’ for details of Ms. Lucia Fong’s relevant skills and experience. In addition, we [have established] our Audit Committee comprising three non-executive Directors, a majority of whom are independent non-executive Directors, which will also review and supervise our internal control procedures;

. We have appointed HeungKong Capital Limited as our compliance advisor upon [REDACTED] to advise our Company on compliance matters in accordance with Rule 3A.19 of the Listing Rules; and

. We [have established] our Audit Committee to oversee and provide an independent view of the effectiveness of the financial reporting process, internal control and risk management systems of our Group and the relevant audit processes to enhance corporate governance and ensure the compliance with statutory requirements.

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OUR CONTROLLING SHAREHOLDERS

As of the date of this document, the issued share capital of our Company is wholly-owned by Eminent Leader.

Immediately following completion of the [REDACTED] and the [REDACTED] (without taking into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme), [REDACTED]% of the issued share capital of our Company will be owned by Eminent Leader, which is a company legally and beneficially owned by Mr. C. Y. Fong, Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong as to 99.96%, 0.01%, 0.01%, 0.01% and 0.01%, respectively. As such, Eminent Leader, Mr. C.Y. Fong, Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong are a group of Controlling Shareholders. For the background of Ms. Lucia Fong, Mr. Kenneth Fong and Mr. Vincent Fong, see ‘‘Directors and Senior Management.’’

For more information relating to our Controlling Shareholders and their respective shareholdings in our Company, see ‘‘History, Reorganization, Development and Corporate Structure’’ and ‘‘Substantial Shareholders.’’

INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS

Eminent Leader was incorporated in the BVI as a private limited liability company on January 8, 1999 and is an investment holding company. Following the Reorganization, Eminent Leader became our Controlling Shareholder. For further details of the Reorganization, see ‘‘History, Reorganization, Development and Corporate Structure — Reorganization.’’

Having considered the following factors, our Directors consider that we are capable of carrying on our business independently from our Controlling Shareholders and their respective close associates (other than the members of our Group) upon the [REDACTED].

Clear Delineation of Business and No Competing Interest

We are a leading beverage company in Hong Kong and China and primarily offer natural, healthy and functional drinks, spirits and wines, sakes, beers, packaged food and snacks.

During the Track Record Period and up to the Latest Practicable Date, in addition to its interest in our Group, our Controlling Shareholders also held equity interest via Star Vision (a wholly-owned subsidiary of Eminent Leader) in, inter alia, Gritus Limited (‘‘Gritus’’), Venmart and Original Taste Workshop Limited (‘‘Original Taste Workshop’’) (collectively, ‘‘Star Vision’s Investments,’’ details of which are set out below).

Given the differences in the business focus, business model and management team between our Group and that of Star Vision’s Investments as further detailed below, our Directors are of the view that there is a clear delineation between our business and Star Vision’s Investments and as a result, none of Star Vision’s Investments would compete, or are expected to compete, directly or indirectly with our business.

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Gritus and Venmart

Gritus is a company incorporated in Hong Kong with limited liability on May 18, 2018. As of the Latest Practicable Date, Gritus was owned as to approximately 80.0% and 20.0% by Gritus Holding Limited (‘‘Gritus Holding’’) and Star Vision, respectively. Gritus Holding is a company incorporated in Hong Kong with limited liability on July 9, 2018, and as of the Latest Practicable Date, owned as to approximately 57.1%, 26.7%, 9.8% and 6.4% by Mr. Li Chin Nung, Mr. Yiu Pak Hin, Mr. Tam Ho Wan and Mr. Tang Chi Wang, respectively, all of whom are Independent Third Parties.

Venmart is a company incorporated in Hong Kong with limited liability on April 26, 2019. As of the Latest Practicable Date, Venmart was owned as to 51% and 49% by Star Vision and Gritus, respectively.

In 2018, 2019 and 2020, our sales to Gritus Technology Limited (‘‘Gritus Technology’’, a wholly- owned subsidiary of Gritus), which included our indirect sales to Venmart through Gritus Technology, were approximately HK$42,000, HK$394,000 and HK$443,000, respectively.

We consider that the businesses operated by Gritus and Venmart are clearly delineated from our business for the following reasons:

(i) Different business focus — During the Track Record Period and up to the Latest Practicable Date, each of Gritus and Venmart operated vending machines that sold food, beverage and other consumer products supplied by us or Independent Third Parties. To the best knowledge and belief of our executive Directors, the revenue of each of Gritus and Venmart was derived solely from their operation of vending machines. So far as our Directors are aware, Gritus and Venmart did not have any present intention as of the Latest Practicable Date to change their business focus which will result in them competing with us. As such, the business focus of our Group on the one hand and that of Gritus and Venmart on the other hand are different. As of the Latest Practicable Date, we also owned 131 vending machines which we lent to our customers free of charge if they met our minimum purchase requirement, only for the sale of beverage products they purchased from us. Our Group did not operate a vending machine business and had no plan to do so as of the Latest Practicable Date. In 2018, 2019 and 2020, our revenue from the supply of beverage products to customers for sale in vending machines were approximately HK$6.0 million, HK$6.0 million and HK$1.7 million, respectively, which only accounted for approximately 0.4%, 0.3% and 0.1% of our total revenue, respectively.

(ii) Different business model — Gritus and Venmart sell products directly to end-customers while our major customer base comprises retailers including hypermarkets, supermarkets, convenience stores, specialty retailers in spirits and wines, restaurants, clubs, bars and hotels, as well as wholesalers and dealers.

(iii) Different management team — Star Vision is a passive investor with a 20% minority investment interest in Gritus. Star Vision has no control over the management of Gritus and our executive Directors and senior management do not participate in the day-to-day operation and management of Gritus. Further, none of our Directors, senior management, Controlling Shareholders or any of their respective associates has any boardrepresentationinGritus. Notwithstanding that Venmart is a subsidiary of Eminent Leader, and that Star Vision and Mr. Kenneth Fong are two out of three directors of Venmart, none of the directors of Star Vision,namely,Mr.C.Y.Fong,Ms.Kay,Mr.KennethFongandMs.LuciaFong

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participates in the day-to-day operation and management of Venmart and as such, Star Vision is essentially a passive investor of Venmart. The businesses of Gritus and Venmart are independently run by Independent Third Parties who do not have any role or interest in our Group.

Original Taste Workshop

Original Taste Workshop is a company incorporated in Hong Kong with limited liability on September 22, 2006. As of the Latest Practicable Date, Original Taste Workshop was owned as to 64%, 20% and 16% by Billion Capital Investments Limited (‘‘Billion Capital’’), Star Vision and Mr. WONG Shui Hin, an Independent Third Party, respectively. Billion Capital is an international company incorporated in Samoa on August 28, 2006. As of the Latest Practicable Date, Billion Capital was wholly-owned by Mr. WONG Fat Mo, Ian, an Independent Third Party. During the Track Record Period, there was no transaction between Original Taste Workshop and our Group.

We consider that the business operated by Original Taste Workshop is clearly delineated from our business for the following reasons:

(i) Different business focus — As of the Latest Practicable Date, Original Taste Workshop operated retail outlets in railway stations, commercial buildings, shopping malls and hospitals in Hong Kong, and sold healthy food and beverages including ‘‘Chinese-style’’ soups, ‘‘home- style’’ rice dishes, snacks and Chinese herbal beverages; Original Taste Workshop also sold its products through retailers such as supermarkets and convenience stores in Hong Kong. Although our Group and Original Taste Workshop both offer soft beverages, Original Taste Workshop primarily offers Chinese herbal beverages under their own brand, while we offer a comprehensive range of products under our In-house Brands and Third-party Brands which include tea, juice, oat milk, herbal and functional drinks, energy drinks, water and coconut water. Further, Original Taste Workshop’s business primarily focuses on the sale of ‘‘Chinese-style’’ soups which we do not offer as part of our business. So far as our Directors are aware, Original Taste Workshop did not have any present intention as of the Latest Practicable Date to change its business focus which will result in it competing with us. As such, the business focus of our Group and that of Original Taste Workshop are largely different.

(ii) Different business model — Original Taste Workshop operated over 20 retail outlets in Hong Kong as of the Latest Practicable Date and directly sold products to end-customers, in addition to maintaining a sales network through retailers such as supermarkets and convenience stores, while our major customer base comprises retailers including hypermarkets, supermarkets, convenience stores, specialty retailers in spirits and wines, restaurants, clubs, bars and hotels, as well as wholesalers and dealers.

(iii) Different management team — Star Vision is a passive investor with a 20% minority investment interest in Original Taste Workshop. Star Vision has no control over the management of Original Taste Workshop and our executive Directors and senior management do not participate in the day-to-day operation and management of Original Taste Workshop. Further, none of our Directors, senior management, Controlling Shareholders or any of their

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respective associates has any board representation in Original Taste Workshop. The business of Original Taste Workshop is independently run by Independent Third Parties who do not have any role or interest in our Group.

In view of the above, our Controlling Shareholders and Directors confirmed that as of the Latest Practicable Date, none of them nor their respective close associates had any interest in a business, apart from the business of our Group, which competes or is likely to compete, directly or indirectly, with our business, which would require disclosure under Rule 8.10 of the Listing Rules.

To further ensure that our Controlling Shareholders do not compete directly or indirectly with our business following completion of the [REDACTED], our Controlling Shareholders have entered into the Deed of Non-competition in favor of our Company, details of which are set out in ‘‘— Non-competition Undertakings’’ below.

Financial Independence

We are financially independent of our Controlling Shareholders and their respective close associates. We have sufficient capital and are able to independently obtain banking facilities to operate our business independently, and have adequate resources to support our daily operations. In addition, our Group has an independent financial system and makes financial decisions according to our own business needs. During the Track Record Period, some of our Controlling Shareholders and Ms. Kay have provided personal guarantees (the ‘‘Personal Guarantees’’) in favor of financial institutions, and Richmen has charged one of its properties (the ‘‘Legal Charge’’) in favor of a financial institution, in connection with our bank borrowings. The Personal Guarantees and Legal Charge will be fully released and replaced by corporate guarantees to be provided by our Company upon [REDACTED].

As of the Latest Practicable Date, there was no amount due to our Controlling Shareholders from our Group, other than those incurred in the ordinary and usual course of our business (see ‘‘Connected Transactions’’ for details of continuing connected transactions between our Group and our Controlling Shareholders and/or their respective close associates).

Our Directors believe that we are capable of obtaining financing from Independent Third Parties without reliance on our Controlling Shareholders given our steady cash flow generation and ability to obtain loans from financial institutions or raise funds through equity financing on a standalone basis after the [REDACTED]. Based on the above, our Directors are satisfied that we are able to maintain financial independence from our Controlling Shareholders and their respective close associates.

Operational Independence

We have sufficient operational capacity in terms of capital, facilities, premises and employees to operate our business independently. We also have independent access to suppliers and customers. Save as disclosed in ‘‘Business,’’ our customers and suppliers are independent from our Controlling Shareholders and their respective close associates.

We have established our own organizational structure with individual departments, each with specific areas of responsibilities, including sales and marketing, logistics and shipping, research and development and quality assurance, customer service, human resources and administration, information technology and accounting. Whilst we will continue to provide accounting and administrative support

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Further, although we have leased certain premises, including our Hong Kong office headquarters, from Richmen, details of which are set out in ‘‘Connected Transactions,’’ our Directors believe that the leases are entered into in the ordinary and usual course of our business and conducted on normal commercial terms. We are able to easily find replacement premises nearby at comparable rent for our office headquarters if we intend to relocate.

In addition, each of Telford Beverage Brands and Telford Spirits Brands entered into a trademark license agreement with Telford Enterprise and/or Global Rising, details of which are set out in ‘‘Connected Transactions — Fully Exempt Continuing Connected Transactions — 5. Trademark license agreements with Telford Enterprise and Global Rising,’’ pursuant to which Telford Enterprise and/or Global Rising agreed to license certain packaged food, beverage, wines, spirits and/or other alcoholic products related trademarks (the ‘‘Licensed Trademarks’’) for our use in connection with our business. Considering that (i) revenue generated from the Licensed Trademarks during the Track Record Period was around or below 0.3% of our total revenue in each financial year, (ii) the Licensed Trademarks are licensed to us on a royalty-free basis, and (iii) each of the trademark license agreements is for a term of 20 years commencing on the [REDACTED] and terminable only by Telford Beverage Brands or Telford Spirits Brands during the term or by any party upon the occurrence of limited events of default, and (iv) each of the relevant licensors has undertaken to the relevant licensee not to use, create any encumbrance over or otherwise dispose of any of the Lisensed Trademarks during the 20-year term without the prior written consent of the relevant licensee, we believe that the trademark license agreements secure our exclusive right-to-use the Licensed Trademarks in our operations in a cost-efficient and sustainable manner and thus adequately protect our interests.

Save as disclosed in ‘‘Connected Transactions,’’ we have not entered into any other continuing connected transactions with our Controlling Shareholders or their respective close associates that will continue after the [REDACTED]. As such, our Directors consider that such one-off and continuing connected transactions do not indicate any undue reliance of our Group on our Controlling Shareholders and their respective close associates, and are beneficial to our Company and our Shareholders as a whole.

We have also established a set of internal control procedures and adopted corporate governance practices to facilitate the effective operation of our business.

Based on the above, our Directors are satisfied that we had been operating independently from our Controlling Shareholders and their respective close associates during the Track Record Period and will continue to operate independently.

Administrative Independence

While we maintain our own staff for various administrative support functions, pursuant to an administrative services agreement entered into between Telford International and Eminent Leader (details of which are set out in ‘‘Connected Transactions’’), we have agreed to provide the Administrative Services to the Eminent Leader Private Group.

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We believe that the provision of accounting and administrative support services to the Eminent Leader Private Group represents a cost effective arrangement which is in the interests of both our Group and the Eminent Leader Private Group. Whilst the relevant accounting and administrative functions will be supported by common teams, the costs of such services will be shared fairly and equitably between our Group and the Eminent Leader Private Group. Save for the above, our business operations have been and will continue to be carried out by distinct teams of management and staff. As our Group is the provider of the Administrative Services, our Directors consider that this proposed sharing arrangement does not adversely affect the independence from our Controlling Shareholders and their respective close associates.

Management Independence

Although our Controlling Shareholders will maintain controlling interests in our Company upon completion of the [REDACTED] and the [REDACTED], the day-to-day management and operations of our Group will be the responsibility of all our executive Directors and senior management. Our Board has six Directors comprising three executive Directors and three independent non-executive Directors.

The following table sets forth the major positions held by our Directors in the Eminent Leader Private Group as of the Latest Practicable Date:

Major position held in the Name of Director Position held in our Company Eminent Leader Private Group

Mr. Kenneth Fong Chairman, chief executive officer and Director of Eminent Leader and executive Director certain of its subsidiaries

Ms. Lucia Fong Vice chairlady, chief financial officer Director of Eminent Leader and and executive Director certain of its subsidiaries

Mr. Vincent Fong Vice chairman, chief executive officer Director of Eminent Leader and (China) and executive Director one of its subsidiaries

Save as disclosed above, as of the Latest Practicable Date, none of our other Directors held any position in the Eminent Leader Private Group.

Ms. Lucia Fong, Mr. Kenneth Fong and Mr. Vincent Fong are our executive Directors and are also our Controlling Shareholders. Notwithstanding this, our Company is capable of maintaining management independence due to the following reasons:

(i) Each of our Directors is aware of his/her fiduciary duties as a director of our Company which require, among other things, that he/she acts for the benefit and in the best interests of our Company and does not allow any conflict between his/her duties as a Director and his/her personal interests;

(ii) Half of the members of our Board are (a) independent of, and do not have any directorships and/or other roles in, our corporate Controlling Shareholder; and (b) not related to the individual Controlling Shareholders;

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(iii) Other than the individual Controlling Shareholders and Mr. Lowieden Edora EDJAN, none of the members of our senior management (a) has any directorships and/or other roles in our corporate Controlling Shareholder; or (b) is related to the individual Controlling Shareholders;

(iv) Save for Mr. C.Y. Fong, who does not participate in the day-to-day management and operations of our Group, each of the individual Controlling Shareholders devotes almost all of his/her working time as an executive Director and other management roles in our Group;

(v) In the event that there is a potential conflict of interest arising out of any transaction to be entered into between our Group and our Directors or their respective close associates, the interested Director(s) shall abstain from voting at the relevant Board meetings of our Company in respect of such transactions and shall not be counted towards the quorum;

(vi) Our Board has a balanced composition of executive Directors and independent non-executive Directors which ensures the independence ofourBoardinmakingdecisions affecting our Company. Specifically, (a) our independent non-executive Directors are not associated with our Controlling Shareholders or their respective close associates; (b) our independent non- executive Directors account for more than one-third of our Board; and (c) our independent non-executive Directors individually and collectively possess the requisite knowledge and experience and will be able to provide professional and experienced advice to our Company. Accordingly, our Group believes that the remaining Board can still function properly in the event that all our executive Directors are required for abstain from voting. Our Board therefore believes that our independent non-executive Directors are able to bring impartial and sound judgment to the decision-making process of our Board and protect the interests of our Company and our Shareholders as a whole; and

(vii) We will establish corporate governance measures and adopt sufficient and effective control mechanisms to manage conflicts of interest, if any, between our Group and our Controlling Shareholders, which would support our independent management.

Having considered the above factors, our Directors are satisfied that they are able to perform their managerial roles in our Company independently, and our Directors are of the view that we are capable of managing our business independently from our Controlling Shareholders and their respective close associates after the [REDACTED].

NON-COMPETITION UNDERTAKINGS

Each of our Controlling Shareholders (each a ‘‘Covenantor’’ and collectively, the ‘‘Covenantors’’) has entered into the Deed of Non-Competition in favor of our Company, under which each of the Covenantors has irrevocably and unconditionally, jointly and severally, warranted and undertaken to our Company (for ourselves and as trustee for each of our subsidiaries) that:

(i) He/she/it will not, and will procure any Covenantor and his/her/its close associates (each a ‘‘Controlled Person’’ and collectively, the ‘‘Controlled Persons’’) and any company or companies directly or indirectly controlled by the Covenantor (which for the purpose of Deed of Non-Competition, shall not include any member of our Group) (each a ‘‘Controlled Company’’ and collectively, the ‘‘Controlled Companies’’) not to, except through any

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member of our Group, directly or indirectly (whether as principal or agent, through any body corporate, partnership, joint venture or other contractual arrangement and whether for profit or otherwise), carry on, engage in, invest or be interested or otherwise involved in any business that is similar to or in competition with or is likely to be in competition with any business carried on or contemplated to be carried on by any member of our Group from time to time or in which any member of our Group is engaged or has invested or is otherwise involved in or which any member of our Group has otherwise publicly announced its intention to enter into, engage in or invest in (whether as principal or agent and whether directly or through any body corporate, partnership, joint venture or other contractual or other arrangement) in any territory that our Group carries on its business from time to time (‘‘Restricted Business’’);

(ii) For the avoidance of doubt, he/she/it will use his/her/its reasonable endeavors to procure Venmart not to, whether directly or indirectly, carry on, engage in, invest or be interested or involved in the Restricted Business, or otherwise expand its scope of business such that its business becomes a Restricted Business;

(iii) In the event that Gritus and/or Original Taste Workshop directly or indirectly carries on, engages in, invests or be interested or involved in any Restricted Business, or otherwise expands its respective scope of business such that it becomes a Restricted Business, he/she/it will, at our request, procure the sale to us of his/her/its direct or indirect interests in Gritus and/or Original Taste Workshop (as the case may be) at the then fair market value of such interest(s) as determined by an Independent Third Party valuer;

(iv) In the event that he/she/it proposes to sell (whether directly or indirectly) his/her/their interests in Venmart, Gritus and/or Original Taste Workshop (the ‘‘Disposal Opportunity’’), he/she/it shall first offer the Disposal Opportunity to us on terms that are no less favorable than those offered to an Independent Third Party; and

(v) When any Controlled Person and/or any Controlled Company is offered or becomes aware of any new project or business opportunity (‘‘New Business Opportunity’’) directly or indirectly to engage or become interested in a Restricted Business, he/she/it (i) shall promptly notify our Company of such New Business Opportunity in writing, refer the same to our Company for consideration first and provide such information as may be reasonably required by our Company to make an informed assessment of such New Business Opportunity; and (ii) shall not, and shall procure that the Controlled Persons or Controlled Companies shall not, invest or participate in any such New Business Opportunity unless such New Business Opportunity shall have been declined by a majority of our independent non-executive Directors on our behalf in writing and the principal terms of which he/she/it and/or his/her/its close associates invest or participate in are no more favorable than those made available to our Company.

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The restrictions which each of the Covenantors has agreed to undertake pursuant to the non- competition undertakings will not apply to such Covenantors in the following circumstances: the holding of or interests in shares or other securities by any of the Covenantors and/or his/her/its close associates in any company which conducts or is engaged in any Restricted Business, provided that, in the case of such shares, they are listed on a recognized stock exchange as specified under the SFO and either:

(i) the relevant Restricted Business (and assets relating thereto) accounts for less than 10% of the relevant consolidated turnover or consolidated assets of the company in question, as shown in the latest audited accounts of the company in question; or

(ii) the total number of the shares held by any of the Covenantors and his/her/its close associates or in which they are together interested does not amount to more than 5% of the issued shares of that class of the company in question, provided that any of the Covenantors and his/her/its close associates, whether acting singly or jointly, are not entitled to appoint a majority of the directors of that company and that at all times there is a holder of such shares holding (together, where appropriate, with its close associates) a larger percentage of the shares in question than the Covenantor and his/her/its close associates together hold.

The non-competition undertakings will take effect from the date on which [REDACTED] in the Shares first commence on the Main Board and will cease to have any effect upon the earliest of the date on which (i) such Covenantor, being a Controlling Shareholder, collectively with any other Covenantor(s) ceases to be interested, directly or indirectly, in 30% or more of the issued Shares, or otherwise ceases to be regarded as a controlling shareholder (as defined under the Listing Rules from time to time) of our Company; or (ii) the Shares cease to be [REDACTED] and traded on the Stock Exchange.

CORPORATE GOVERNANCE MEASURES

Our Company will adopt the following measures to strengthen our corporate governance practice and to safeguard the interests of our Shareholders:

(i) We are committed that our Board should include a balanced composition of executive and independent non-executive Directors. We [have appointed] three independent non-executive Directors and we believe our independent non-executive Directors possess sufficient experience and they are free of any business and/or other relationship which could interfere in any material manner with the exercise of their independent judgement and will be able to provide an impartial and external opinion to protect the interests of our public Shareholders. For details of our independent non-executive Directors, see ‘‘Directors and Senior Management — Board of Directors — Independent non-executive Directors’’;

(ii) Our independent non-executive Directors will review and disclose decisions with basis, on an annual basis in our annual report, the compliance with the non-competition undertakings by our Controlling Shareholders;

(iii) Our Controlling Shareholders undertake to provide all information requested by our Company which is necessary for the annual review by the independent non-executive Directors and the enforcement of the non-competition undertakings;

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(iv) Our Company will disclose decisions with basis on matters reviewed by the independent non- executive Directors relating to compliance and enforcement of the non-competition undertakings of our Controlling Shareholders in the annual reports of our Company or otherwise by way of announcements published by our Company;

(v) Our independent non-executive Directors may appoint independent financial advisor and other professional advisors as they consider appropriate to advise them on any matter relating to the non-competition undertakings or connected transaction(s) at the full cost of our Company;

(vi) Our Controlling Shareholders will make an annual declaration on compliance with their non- competition undertakings in our annual report;

(vii) Our independent non-executive Directors will be responsible for deciding whether or not to allow our Controlling Shareholders and/or their respective close associates to involve or participate in a Restricted Business and if so, any condition(s) to be imposed;

(viii) In the event that our independent non-executive Directors are requested to review any conflict of interest circumstances between our Company on the one hand and our Controlling Shareholders and/or our Directors on the other, our Controlling Shareholders and/or our Directors shall provide our independent non-executive Directors with all necessary information and our Company shall disclose the decisions of our independent non-executive Directors either through our annual report or by way of announcements;

(ix) In the event that there is any potential conflict of interest relating to the business of our Group between our Group and our Controlling Shareholders, the interested Directors, or as the case may be, our Controlling Shareholders would, according to the Articles or the Listing Rules, be required to declare his/her/its interests and, where required, abstain from participatingintherelevantBoardmeetingorgeneral meeting and voting on the transaction and not count as quorum where required; and

(x) Our Company has appointed HeungKong Capital Limited as our compliance adviser, which upon enquiry of our Company (including our independent non-executive Directors), will provide advice and guidance to our Company (including our independent non-executive Directors) in respect of compliance with the Listing Rules.

Further, any transaction that is proposed between our Group and our Controlling Shareholders and their respective close associates will be required to comply with the requirements of the Listing Rules, including, where appropriate, the reporting, annual review, announcement and independent Shareholders’ approval requirements. With the corporate governance measures comprising the measures set out above, our Directors believe that the interest of our Shareholders and our Company taken as a whole will be protected.

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CONTINUING CONNECTED TRANSACTIONS

During the Track Record Period, we have entered into certain transactions with our connected persons and such transactions will constitute our continuing connected transactions under Chapter 14A of the Listing Rules after the [REDACTED]. We have also entered into certain one-off connected transactions with our connected persons prior to the [REDACTED].

Summary of Our Continuing Connected Transactions

Relevant Listing Rules and details of the No. Nature of transactions exemption

Fully Exempt Continuing Connected Transactions

Exempt From the Announcement, Circular, Independent Shareholders’ Approval, Reporting and Annual Review Requirements

1. Supply agreement with Ming Tai, regarding Ming Tai’s supply of Rule 14A.76(1)(a), fully lemons to us and our supply of water and spirits to Ming Tai exempt continuing connected transaction

2. Supply agreement with Venmart, regarding our supply of beverages Rule 14A.76(1)(a), fully to Venmart exempt continuing connected transaction

3. Supply agreement with Sino Administration Services Limited, a Rule 14A.76(1)(c), fully company incorporated in Hong Kong with limited liability (‘‘Sino exempt continuing Administration’’), regarding our supply of beverages, wines, connected transaction spirits and such other products as may be agreed from time to time to Sino Administration (for itself and members of the Sino Group)

4. Administrative services agreement with Eminent Leader and its Rule 14A.98, fully exempt subsidiaries (excluding those companies comprising our Group) continuing connected (the ‘‘Eminent Leader Private Group’’) transaction

5. Trademark license agreements with Telford Enterprise and Global Rule 14A.76(1)(a), fully Rising exempt continuing connected transaction

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Fully Exempt Continuing Connected Transactions

1. Supply Agreement with Ming Tai

Background

On [.], 2021, Wing Tai and Ming Tai entered into a supply agreement (the ‘‘Ming Tai Supply Agreement’’) for a term commencing from the date of the Ming Tai Supply Agreement to December 31, 2023, pursuant to which Ming Tai has agreed to supply lemons to our Group for our business. In addition, pursuant to the Ming Tai Supply Agreement, we shall supply Ming Tai with water and spirits for their business operations. During the Track Record Period, Ming Tai was owned as to 69% by Eminent Leader, 30% by Mr. FONG Kwan Ming (方坤明) and 1% by Jessop Management Limited (a wholly-owned subsidiary of Eminent Leader). As of the Latest Practicable Date,MingTaiwasownedasto50%byeachofMr.FONGKwanMingandMs.TSOYing(曹瑩). Mr. FONG Kwan Ming is a nephew to Mr. C. Y. Fong and a cousin to Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong and Ms. TSO Ying is the spouse of Mr. FONG Kwan Ming. Accordingly, Ming Tai is our connected person.

Pursuant to the Ming Tai Supply Agreement, Ming Tai shall provide our Group with lemons and we shall provide Ming Tai with water and spirits for a term commencing from the date of the Ming Tai Supply Agreement to December 31, 2023, in accordance with the terms and conditions set out therein. Further, the transactions between Wing Tai and Ming Tai shall be conducted in the ordinary and usual course of business and based on normal commercial terms determined after good faith and arm’s length negotiations, by reference to the prevailing market rate of the relevant products, and no less favorable to our Group than available to or from Independent Third Parties for the supply of the same or similar products.

Historical Transaction Amounts, Directors’ Confirmation and Listing Rules Implications

During the Track Record Period, the approximate amount of purchase of lemons by us from Ming Tai and purchase of water and spirits by Ming Tai from us are set out below:

Year ended December 31, 2018 2019 2020

Purchase of lemons by us from Ming Tai ...... HK$224,000 HK$11,000 HK$71,000 Purchase of water and spirits by Ming Tai from us ...... HK$30,000 HK$27,000 HK$2,000

Aggregate amount...... HK$254,000 HK$38,000 HK$73,000

Our Directors [(including our independent non-executive Directors)] have confirmed that the transactions between Wing Tai and Ming Tai have been and will be conducted in our ordinary and usual course of business on normal commercial terms. As such, our Directors considered that the entering into of the Ming Tai Supply Agreement is fair and reasonable and in the interests of our Group and our Shareholders as a whole.

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Our Directors expect that the total amount payable under the Ming Tai Supply Agreement by us to Ming Tai and Ming Tai to us when aggregated for each of 2021, 2022 and 2023 will not exceed HK$75,000, HK$150,000 and HK$260,000, respectively. Such amounts were derived with reference to the current restrictive COVID-19 pandemic business environment and the anticipated gradual recovery in business in the future to pre-COVID-19 levels in 2018. As such, each of the applicable percentage ratios (other than the profits ratio) calculated in accordance with Rule 14.07 of the Listing Rules is expected to be less than 0.1% on an annual basis.

Accordingly, the transactions contemplated under the Ming Tai Supply Agreement fall within the de minimis threshold under Rule 14A.76(1)(a) of the Listing Rules and are fully exempt from the reporting, annual review, announcement and independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

2. Supply Agreement with Venmart

Background

On [.], 2021, Telford International and Venmart entered into a supply agreement (the ‘‘Venmart Supply Agreement’’) for a term commencing from the date of the Venmart Supply Agreement to December 31, 2023, pursuant to which Telford International has agreed to supply beverages to Venmart for its vending machines business. As of the Latest Practicable Date, Venmart was beneficially owned as to 51% by Eminent Leader and 49% by Gritus Limited (‘‘Gritus,’’ a company beneficially owned as to approximately 20.0% by Eminent Leader and 80.0% by Gritus Holding Limited, an Independent Third Party). Accordingly, Venmart is an associate of our Controlling Shareholders and therefore our connected person. See ‘‘Relationship with Our Controlling Shareholders — Independence from Our Controlling Shareholders — Clear Delineation of Business and No Competing Interest’’ for further details.

Pursuant to the Venmart Supply Agreement, we shall supply Venmart with beverages for a term commencing from the date of the Venmart Supply Agreement to December 31, 2023, in accordance with the terms and conditions set out therein. Further, the transactions between Telford International and Venmart shall be conducted in the ordinary and usual course of business and based on normal commercial terms determined after good faith and arm’s length negotiations, by reference to the prevailing market rate of the relevant products, and no less favorable to our Group than available to Independent Third Parties for the supply of the same or similar products.

Historical Transaction Amounts, Directors’ Confirmation and Listing Rules Implications

During the Track Record Period, we did not directly supply Venmart with beverages for sale but we supplied beverages to Gritus Technology Limited (‘‘Gritus Technology,’’ a company wholly-owned by Gritus), and our sales to Gritus Technology were approximately HK$42,000,

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HK$394,000 and HK$443,000 in 2018, 2019 and 2020, respectively. Gritus Technology on-sold certain items we sold to it to Venmart in 2020 as Venmart only commenced business operations in March 2020. The approximate amount of supply of beverages by us to Venmart through Gritus Technology during the Track Record Period is set out below:

Year ended December 31, 2018 2019 2020

——HK$72,000

Our Directors [(including our independent non-executive Directors)] have confirmed that the transactions between Telford International and Venmart (whether by itself or through Gritus Technology) have been and will be conducted in the ordinary and usual course of business of our Group on normal commercial terms. As such, our Directors considered that the entering into of the Venmart Supply Agreement is fair and reasonable and in the interests of our Group and our Shareholders as a whole. As of March 31, 2021, we have ceased to supply beverages to Venmart through Gritus Technology and commenced thereafter to supply beverages directly to Venmart.

Our Directors expect that the total amount payable under the Venmart Supply Agreement by Venmart to us for each of 2021, 2022 and 2023 will not exceed HK$500,000 with reference to the anticipated growth of Venmart’s vending machine business which only commenced in March 2020. As such, each of the applicable percentage ratios (other than the profits ratio) calculated in accordance with Rule 14.07 of the Listing Rules is expected to be less than 0.1% on an annual basis.

Accordingly, the transactions contemplated under the Venmart Supply Agreement fall within the de minimis threshold under Rule 14A.76(1)(a) of the Listing Rules and are fully exempt from the reporting, annual review, announcement and independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

3. Supply Agreement with Sino Administration

Background

On [.], 2021, Telford International and Sino Administration (for itself and on behalf of members of the Sino Group (as hereinafter defined)) entered into a supply agreement (the ‘‘Sino Administration Supply Agreement’’) for a term commencing from the date of the Sino Administration Supply Agreement to December 31, 2023, pursuant to which Telford International has agreed to supply beverages, wines, spirits and such other products as may be agreed from time to time to Sino Administration and/or any member of the Sino Group, namely members of Tsim Sha Tsui Properties Limited (a company incorporated in Hong Kong with limited liability which shares are listed on the Main Board of the Stock Exchange, stock code: 247), Sino Land Company Limited (a company incorporated in Hong Kong with limited liability which shares are listed on the Main Board of the Stock Exchange, stock code: 83) and Sino Hotels (Holdings) Limited (a company incorporated in the Cayman Islands with limited liability which shares are listed on the Main Board of the Stock Exchange, stock code: 1221), companies that are majority owned or controlled by Mr. Robert Ng Chee Siong, and other companies as may be from time to time

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certified to be a member of the Sino Group (collectively the ‘‘Sino Group’’)) for its business operations. Mr. Robert Ng Chee Siong is the father-in-law of Mr. Kenneth Fong, our chairman, chief executive officer, executive Director and a Controlling Shareholder. Accordingly, members of the Sino Group are our connected persons.

Pursuant to the Sino Administration Supply Agreement, Telford International shall supply members of the Sino Group with certain beverages, wines, spirits and such other products as may be agreed from time to time for a term commencing from the date of the Sino Administration Supply Agreement to December 31, 2023, in accordance with the terms and conditions set out therein. Further, the terms and conditions of the transactions between Telford International and the Sino Group, shall be conducted in the ordinary and usual course of business and based on normal commercial terms determined after good faith and arm’s length negotiations between the parties, with reference to the prevailing market rate of the relevant products, and no less favorable to our Group than available to Independent Third Parties for the supply of the same or similar products.

Historical Transaction Amounts, Directors’ Confirmation and Listing Rules Implications

During the Track Record Period, the approximate amount of beverages, spirits and wines supplied by us to members of the Sino Group are set out below:

Year ended December 31, 2018 2019 2020

HK$1,498,000 HK$1,663,000 HK$682,000

Our Directors [(including our independent non-executive Directors)] have confirmed that the transactions between Telford International and Sino Administration and/or any member of the Sino Group, have been and will be conducted in the ordinary and usual course of business of our Group on normal commercial terms. As such, our Directors considered that the entering into of the Sino Administration Supply Agreement is fair and reasonable and in the interests of our Group and our Shareholders as a whole.

It is estimated that the total amount payable under the Sino Administration Supply Agreement by Sino Administration to us for beverages, wines, spirits and such other products as may be agreed from time to time for each of 2021, 2022 and 2023 will not exceed HK$1,700,000, with reference to the highest of the above historical transaction amounts rounded up. This figure was derived on the basis that (i) our executive Directors believe that as businesses continue to re-open and recover in Hong Kong as Hong Kong continues to recover from the COVID-19 pandemic, our supply of beverages, wines, spirits and such other products as may be agreed from time to time to members of the Sino Group will reach pre-COVID-19 levels in the near future, and (ii) the COVID-19 pandemic is currently under control in Hong Kong and the PRC which is conducive to the recovery of business of the relevant places. As such, on an annual basis, the total consideration of the transactions under the Sino Administration Supply Agreement is expected to be less than HK$3 million and the highest applicable percentage ratio (other than the profits ratio) calculated in accordance with Rule 14.07 of the Listing Rules is expected to be less than 5%.

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Accordingly, the transactions contemplated under the Sino Administration Supply Agreement fall within the de minimis threshold under Rule 14A.76(1)(c) of the Listing Rules and are fully exempt from the reporting, annual review, announcement and independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

4. Administrative Services Agreement with the Eminent Leader Private Group

On [.], 2021, Telford International entered into an administrative services agreement (the ‘‘Administrative Service Agreement’’) with Eminent Leader for a term commencing from the date of the Administrative Service Agreement to December 31, 2023 in respect of the provision of accounting and administrative support services (the ‘‘Administrative Services’’) by Telford International to the Eminent Leader Private Group. The charges payable by Eminent Leader to Telford International under the Administrative Services Agreement will be determined on a cost basis to be calculated based on the proportion of relevant time spent by our employees on the Administrative Services as compared to the total time spent by such employees during their working hours with us for the relevant period. Eminent Leader is a Controlling Shareholder and hence our connected person.

Historical Transaction Amounts, Directors’ Confirmation and Listing Rules Implications

There were no historical transaction amounts in 2018, 2019 and 2020. The charges payable under the Administrative Service Agreement going forward are determined after arm’slength negotiation and with reference to the actual time spent. In light of the above, our Directors [(including our independent non-executive Directors)] consider that the Administrative Services Agreement is entered into on normal commercial terms or better to our Group, fair and reasonable and is in the interests of our Group and our Shareholders as a whole.

As the provision of Services under the Administrative Services Agreement is on a cost basis and the costs are identifiable and allocated to the parties involved on a fair and equitable basis, the transactions contemplated under the Administrative Service Agreement fall within the exemption under Rule 14A.98 of the Listing Rules and will be fully exempt from the reporting, annual review, announcement and independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

5. Trademark License Agreements with Telford Enterprise and Global Rising

Telford Enterprise is a wholly-owned subsidiary of Eminent Leader and Global Rising is a company beneficially wholly-owned by Eminent Leader. Accordingly, Telford Enterprise and Global Rising are associates of our Controlling Shareholders and therefore our connected person. On [.], pursuant to a trademark license agreement (the ‘‘Beverage Trademark License Agreement’’) entered into among Telford Enterprise, Global Rising (as licensors, collectively the ‘‘Licensors’’) and Telford Beverage Brands (as licensee), the Licensors have agreed to grant Telford Beverage Brands an exclusive, royalty-free and sub-licensable (to members of our Group) license to use 27 packaged food or beverage related trademarks registered or being applied for registration in Hong Kong, the PRC and other jurisdictions in connection with our business for a period of 20 years effective on the [REDACTED] (subject to certain termination events) at a one-off consideration of HK$100 payable to each of the Licensors.

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On [.], pursuant to a trademark license agreement (the ‘‘Sprits Trademark License Agreement,’’ together with the Beverage Trademark License Agreement, the ‘‘Trademark License Agreements’’) entered into between Telford Enterprise (as licensor) and Telford Spirits Brands (as licensee), Telford Enterprise has agreed to grant Telford Spirits Brands an exclusive, royalty-free and sub-licensable (to members of our Group) license to use 45 wines, spirits or other alcoholic products related trademarks registered or being applied for registration in Hong Kong, the PRC and other jurisdictions in connection with our business for a period of 20 years effective on the [REDACTED] (subject to certain termination events) at a one-off consideration of HK$[REDACTED].

In respect of each of the Trademark License Agreements, within three months prior to the end of their term, the relevant licensor(s) and the relevant licensee shall negotiate in good faith on an arms’ length commercial basis the terms and conditions of the extension of their term. To the extent that the parties cannot agree on the terms of extension, we shall have the right to acquire the relevant trademarks at their then fair market value as determined by an Independent Third Party valuer, subject always to compliance with the requirements of the Listing Rules.

See ‘‘Relationship with Our Controlling Shareholders — Independence from Our Controlling Shareholders — Operational Independence’’ for more details.

As the transactions contemplated under the Trademark License Agreements will be conducted in our ordinary and usual course of business and on normal commercial terms or better to our Group, and each of the applicable percentage ratios (other than the profits ratio) for such transactions (when aggregated) calculated in accordance with Rule 14.07 of the Listing Rules are expected to be less than 0.1% on an annual basis, such transactions fall within the de minimis threshold under Rule 14A.76(1)(a) of the Listing Rules and are fully exempt from the reporting, annual review, announcement and independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules. Our Directors [(including our independent non-executive Directors)] considered that the entering into of the Trademark License Agreements is fair and reasonable and in the interests of our Group and our Shareholders as a whole.

One-off Connected Transactions

As of the Latest Practicable Date, our Group had leased certain properties from Richmen, our connected person, under various tenancy agreements. These transactions are accounted as one-off aquisitions of capital assets by our Group under HKFRS 16 ‘‘Leases,’’ and are also considered as one- off connected transactions under Chapter 14A of the Listing Rules. Details of such tenancy agreements are set out below.

6. Rental of Staff Quarter and Car Parking Spaces for Ms. Emily Fong

Background

On April 17, 2019, Richmen (as landlord) and Telford International (as tenant) entered into a tenancy agreement (the ‘‘First Emperor Height Tenancy Agreement’’), pursuant to which Richmen agreed to let and Telford International agreed to take the premises situated at Flat A on 10th Floor, Emperor Height, No. 5 Cox’s Road, Kowloon, Hong Kong and car parking space No. 46 on Basement 2, Emperor Height, No. 5 Cox’s Road, Kowloon, Hong Kong (the ‘‘Emperor Height Residential Premises and First Car Parking Space’’), for a term commencing from May

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1, 2020 to April 30, 2023, at a monthly rental of HK$40,000. Further, on June 22, 2020, Richmen (as landlord) and Telford International (as tenant) entered into a tenancy agreement (the ‘‘Second Emperor Height Tenancy Agreement,’’ together with the First Emperor Height Tenancy Agreement, the ‘‘Former Emperor Height Tenancy Agreements’’), pursuant to which Richmen agreed to let and Telford International agreed to take the car parking space No. 23 situated at Basement 1, Emperor Height, No. 5 Cox’s Road, Kowloon, Hong Kong (the ‘‘Emperor Height Second Car Parking Space,’’ together with the Emperor Height Residential Premises and First Car Parking Space, the ‘‘Emperor Height Residential Premises and Car Parking Spaces’’), for a term commencing from July 15, 2020 to July 14, 2023, at a monthly rental of HK$3,000.

On June 21, 2021, Richmen (as landlord) and Telford International (as tenant) entered into a tenancy agreement (the ‘‘Existing Emperor Height Tenancy Agreement’’), pursuant to which Richmen agreed to let and Telford International agreed to take the Emperor Height Residential Premises and Car Parking Spaces for a term commencing from June 1, 2021 to December 31, 2023, at a monthly rental of HK$49,000. The Existing Emperor Height Tenancy Agreement replaced and superseded the Former Emperor Height Tenancy Agreements.

The Emperor Height Residential Premises and Car Parking Spaces are used as staff quarter and car parking spaces for Ms. Emily Fong, a Controlling Shareholder and also an employee of Telford International.

The monthly rental paid or payable under each of the Former Emperor Height Tenancy Agreements and the Existing Emperor Height Tenancy Agreement was determined on an arm’s length basis between Telford International and Richmen with reference to the prevailing market rates in respect of comparable properties in the vicinity. According to the fair rent letter issued by Cushman & Wakefield Limited, an independent firm of professional property valuer, the terms (including the rent) under each of the Former Emperor Height Tenancy Agreements and the Existing Emperor Height Tenancy Agreement are fair, reasonable and consistent with typical commercial terms. In light of the above, our Directors consider that each of the Former Emperor Height Tenancy Agreements and the Existing Emperor Height Tenancy Agreement is on normal commercial terms.

In accordance with HKFRS 16, our Group [will recognize] right-of-use assets relating to the Existing Emperor Height Tenancy Agreement in the amount of approximately HK$[1.5] million in the consolidated statement of financial positions of our Group during the year ending December 31, 2021.

7. Rental of Wing Tai Shop Premises

Background

On August 6, 2018, Richmen (as landlord) and Wing Tai (as tenant) entered into a tenancy agreement (the ‘‘Former Wing Tai Tenancy Agreement’’), pursuant to which Richmen agreed to let and Wing Tai agreed to take the premises situated at Shop C & D on Ground Floor of Beauty Mansion, No. 69–71A Kimberley Road, Kowloon, Hong Kong (the ‘‘Wing Tai Shop Premises’’), for a term commencing from September 1, 2018 to August 31, 2021, at a monthly rental of HK$88,000.

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On June 21, 2021, Richmen (as landlord) and Wing Tai (as tenant) entered into a tenancy agreement (the ‘‘Existing Wing Tai Tenancy Agreement’’), pursuant to which Richmen agreed to let and Wing Tai agreed to take the Wing Tai Shop Premises for a term commencing from June 1, 2021 to December 31, 2023, at a monthly rental of HK$94,000. The Existing Emperor Wing Tai Tenancy Agreement replaced and superseded the Former Wing Tai Tenancy Agreement.

The Wing Tai Shop Premises is used by Wing Tai primarily as a premises for the sale of alcoholic and soft beverages and other products.

The monthly rental paid or payable under each of the Former Wing Tai Tenancy Agreement and the Existing Wing Tai Tenancy Agreement was determined on an arm’s length basis between Wing Tai and Richmen with reference to the prevailing market rates in respect of comparable properties in the vicinity. According to the fair rent letter issued by Cushman & Wakefield Limited, an independent firm of professional property valuer, the terms (including the rent) under each of the Former Wing Tai Tenancy Agreement and the Existing Wing Tai Tenancy Agreement are fair, reasonable and consistent with typical commercial terms. In light of the above, our Directors consider that each of the Former Wing Tai Tenancy Agreement and the Existing Wing Tai Tenancy Agreement is on normal commercial terms.

In accordance with HKFRS 16, our Group [will recognize] right-of-use assets relating to the Existing Wing Tai Tenancy Agreement in the amount of approximately HK$[2.8] million in the consolidated statement of financial positions of our Group during the year ending December 31, 2021.

8. Rental of Our Hong Kong Office Headquarters

Background

On March 29, 2018, Richmen (as landlord) and Telford International (as tenant) entered into a tenancy agreement (the ‘‘Former Headquarters Tenancy Agreement’’), pursuant to which Richmen agreed to let and Telford International agreed to take the premises situated at the entire 2nd Floor of Tower A of Regent Centre, No. 63 Wo Yi Hop Road, Kwai Chung, New Territories, Hong Kong (the ‘‘Office Headquarters’’) for a term commencing from April 1, 2018 to March 31, 2021 at a monthly rental of HK$301,574.

On March 3, 2021, Richmen (as landlord) and Telford International (as tenant) entered into a tenancy agreement, as amended by a supplemental agreement dated June 21, 2021 entered into between the same parties (the ‘‘Existing Headquarters Tenancy Agreement’’), pursuant to which Richmen agreed to let and Telford International agreed to take Office Headquarters for a term commencing from April 1, 2021 to December 31, 2023 at a monthly rental of HK$301,574. The Office Headquarters is used as our Hong Kong office headquarters.

The monthly rental paid or payable under each of the Former Headquarters Tenancy Agreement and the Existing Headquarters Tenancy Agreement was determined on an arm’slength basis between Telford International and Richmen with reference to the prevailing market rates in respect of comparable properties in the vicinity. According to the fair rent letter issued by Cushman & Wakefield Limited, an independent firm of professional property valuer, the terms (including the rent) under each of the Former Headquarters Tenancy Agreement and the Existing

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Headquarters Tenancy Agreement are fair, reasonable and consistent with typical commercial terms. In light of the above, our Directors consider that each of the Former Headquarters Tenancy Agreement and the Existing Headquarters Tenancy Agreement is on normal commercial terms.

Our Group has leased the Office Headquarters since 2008 for our Hong Kong office headquarters. The Office Headquarters is well established and renovated to suit our business operations. Our Directors believe the Office Headquarters is located in a prime location, with easy transport access. As such, our Directors [(including our independent non-executive Directors)] are of the view that it will be in the interests of our Group to continue the rental of the Office Headquarters from Richmen after the [REDACTED].

In accordance with HKFRS 16, our Group [will recognize] right-of-use assets relating to the Existing Headquarters Tenancy Agreement in the amount of approximately HK$[9.5] million in the consolidated statement of financial position of our Group during the year ending December 31, 2021.

Listing Rules Implications for the Existing Emperor Height Tenancy Agreement, the Existing Wing Tai Tenancy Agreement and the Existing Headquarters Tenancy Agreement (collectively, the ‘‘Tenancy Agreements’’)

Richmen is a wholly-owned subsidiary of Eminent Leader. Accordingly, Richmen is an associate of our Controlling Shareholders and therefore our connected person. As the Tenancy Agreements are entered into by our Group with the same landlord, Richmen, within a 12-month period, the Tenancy Agreements are aggregated as a series of transactions pursuant to Rule 14A.81 of the Listing Rules.

In accordance with HKFRS 16, our Group [will recognize] additional right-of-use assets relating to the Tenancy Agreements (the ‘‘Right-of-Use Leases’’) in the aggregate amount of approximately HK$[13.8] million on our combined statements of financial position during the year ending December 31, 2021. For the purpose of illustration, each of the applicable percentage ratios (other than the profits ratio) calculated in accordance with Rule 14.07 of the Listing Rules in respect of the aggregate amount of the right-of-use assets under the Right-of-Use Leases to be recognized by our Group is more than 0.1% but less than 5%. As such, if the Tenancy Agreements were entered into after the [REDACTED], they would have been subject to the reporting, annual review and announcement requirements under Chapter 14A of the Listing Rules, but exempt from the circular (including independent financial advice) and independent Shareholders’ approval requirements pursuant to Rule 14A.76(2)(a) of the Listing Rules.

For the purpose of Chapter 14A of the Listing Rules, the Right-of-Use Leases entered into prior to the [REDACTED] were accounted for as one-off acquisitions of capital assets by our Group under HKFRS 16. Accordingly, the reporting, annual review, announcement and independent Shareholders’ approval requirements with regard to continuing connected transactions under Chapter 14A of the Listing Rules will not be applicable to the Right-of-Use Leases. In the event that there is any material change to the terms and conditions of the Right-of-Use Leases after the [REDACTED], we shall comply with Chapter 14A of the Listing Rules in respect of such leases as and when appropriate, including, where required, seeking independent Shareholders’ approval prior to effecting such changes.

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BOARD OF DIRECTORS

Our Board of Directors consists of six Directors, comprising three executive Directors and three independent non-executive Directors. Brief information of our Directors is set out below:

Relationship with other Directors, Date of Date of senior management appointment joining our Principal and Controlling Name Age Position as Director Group responsibilities Shareholders

FONG Chun Man 53 Chairman, chief March 30, May 1, 1991 Responsible for the Son of Mr. C. Y. (方振文) executive 2021 formulation of the Fong; brother to officer and strategic direction Ms. Lucia Fong, executive and business Ms. Emily Fong and Director development plans Mr. Vincent Fong; of our Group, as brother-in-law of well as overseeing Mr. Lowieden Edora the overall EDJAN operations and management of our Group

FONG So Ching 54 Vice chairlady, March 30, July 1, 1990 Responsible for the Daughter of Mr. C. Y. Lucia chief 2021 management and Fong; sister to Mr. (方素貞) financial optimization of our Kenneth Fong, Ms. officer and brand portfolio, as EmilyFongandMr. executive well as overseeing Vincent Fong; Director the day-to-day spouse of Mr. operations and Lowieden Edora management EDJAN (operational, financial and accounting) of our Group

FONG Chun Keung 40 Vice chairman, March 30, March 1, Responsible for Son of Mr. C. Y. Vincent chief 2021 2009 overseeing and Fong; brother to (方振強) executive managing our day- Ms. Lucia Fong, officer to-day operations in Mr. Kenneth Fong (China) and China and Ms. Emily executive Fong; brother-in-law Director of Mr. Lowieden Edora EDJAN

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Relationship with other Directors, Date of Date of senior management appointment joining our Principal and Controlling Name Age Position as Director Group responsibilities Shareholders

LAU Ip Keung 54 Independent [.][.] Responsible for Nil Kenneth non-executive supervising and (劉業強) Director providing BBS, MH, JP independent judgement to our Board and serving as members of certain committees of our Board

WU Thomas 48 Independent [.][.] Responsible for Nil Jefferson non-executive supervising and (胡文新) Director providing independent judgement to our Board and serving as the chairman and/ or members of certain committees of our Board

HO Nga Yee 57 Independent [.][.] Responsible for Nil (何雅儀) non-executive supervising and Director providing independent judgement to our Board and serving as the chairlady and/or members of certain committees of our Board

Executive Directors

Mr. FONG Chun Man (方振文), aged 53, was appointed as a Director on March 30, 2021. He was re-designated as our chairman, chief executive officer of our Company and an executive Director on June 21, 2021. He is also the chairman of the Nomination Committee. Mr. Kenneth Fong is responsible for the formulation of the strategic direction and business development plans of our Group, as well as overseeing the overall operations and management of our Group. He is currently a director of our

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Mr. Kenneth Fong joined our Group in May 1991 and was appointed as a general manager and director of Telford International in May 1992 and has accumulated over 30 years of operational experience in the beverage industry. Prior to that, Mr. Kenneth Fong studied Mathematics at The University of British Columbia in Vancouver, Canada. Mr. Kenneth Fong has led the expansion of our client base and the building of our brand throughout the years.

Mr. Kenneth Fong had been serving as a non-independent and non-executive director of Yeo Hiap Seng Limited (a company listed on the Main Board of the Singapore Exchange Limited (stock code: Y03)) from July 2017 to December 2019.

Mr. Kenneth Fong was a director of the following companies at the time of their respective dissolution. The relevant details are as follows:

Place of incorporation Nature of business or immediately prior Date of Means of Reason for Company name establishment Position held to dissolution dissolution dissolution dissolution

5 S Catering Management Hong Kong Director Food and beverage January 30, Deregistration Cessation of Company Limited business 2009 business 五味飲食管理有限公司 Autolook Aero Design Hong Kong Director Vehicle parts April 12, Deregistration Cessation of Limited business 2001 business Guangzhou Yongquan PRC Legal Trading business September 6, Deregistration Cessation of Beverage Co., Ltd. representative 2006 business 廣州永泉飲料有限公司 and executive director Ru Shan Catering PRC Director Food and beverage September 4, Deregistration Cessation of Company Limited 如山 business 2020 business 餐飲管理(上海)有限公司

Mr. Kenneth Fong confirmed that the above companies were solvent immediately prior to their respective dissolution. Mr. Kenneth Fong further confirmed that there was no fraudulent act or misfeasance on his part leading to the dissolution of such companies and he is not aware of any actual or potential claim that has been or will be made against him as a result of the dissolution of such companies.

Ms. FONG So Ching Lucia (方素貞), aged 54, was appointed as a Director on March 30, 2021. She was re-designated as our vice chairlady, chief financial officer of our Company and an executive Director on June 21, 2021. She is also a member of the Remuneration Committee. Ms. Lucia Fong is responsible for the management and optimization of our brand portfolio, as well as overseeing the day- to-day operations and management (operational, financial and accounting) of our Group. She is currently a director of our subsidiaries Eminent Dragon, Telford International, Fong’s Logistics, Wing Tai, Telford Industries, Telford (China), Telford Beverage Brands, Telford Spirits Brands, Telford Shenzhen and Telford Wine & Spirits (C).

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Ms. Lucia Fong joined our Group in July 1990 and was appointed as a director of Telford International in April 1994 and has over 30 years of operational and management experience in the beverage industry. Ms. Lucia Fong has led the growth of our Group over the years.

Ms. Lucia Fong obtained a Bachelor of Science degree in Pharmacy from The University of British Columbia in Vancouver, Canada in May 1989.

Ms. Lucia Fong was a director of the following companies at the time of their respective dissolution. The relevant details are as follows:

Place of incorporation Nature of business or immediately prior Date of Means of Reason for Company name establishment Position held to dissolution dissolution dissolution dissolution

5 S Catering Management Hong Kong Director Food and beverage January 30, Deregistration Cessation of Company Limited 五味 business 2009 business 飲食管理有限公司 Meko Japan Limited Hong Kong Director Brand holding March 18, Deregistration Cessation of 美果日本有限公司 2005 business Ru Shan Catering PRC Director Food and beverage Sepember 4, Deregistration Cessation of Company Limited 如山 business 2020 business 餐飲管理(上海)有限公司

Ms. Lucia Fong confirmed that the above companies were solvent immediately prior to their respective dissolution. Ms. Lucia Fong further confirmed that there was no fraudulent act or misfeasance on her part leading to the dissolution of such companies and she is not aware of any actual or potential claim that has been or will be made against her as a result of the dissolution of such companies.

Mr. FONG Chun Keung Vincent (方振強), aged 40, was appointed as a Director on March 30, 2021. He was re-designated as our vice chairman, chief executive officer (China) of our Company and an executive Director on June 21, 2021. Mr. Vincent Fong is responsible for overseeing and managing our day-to-day operations in China. He is currently a director of our subsidiaries Telford Wine & Spirits (S) and Xihai (Shanghai).

Mr. Vincent Fong joined our Group as a business development manager of Telford Wine & Spirits (S) in March 2009. Mr. Vincent Fong has led the growth of our sales in China, as well as the development and optimization of our brand portfolio in China. Prior to joining our Group, Mr. Vincent Fong was a director and general manager of Ru Shan Catering Company Limited from February 2007 to December 2008.

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Mr. Vincent Fong has been actively participating in public service in both Hong Kong and China and held the following key and influential positions. He is the president of the 11th and 10th Hong Kong-Shanghai Youth Association and was the chairman of the 9th and 8th Hong Kong-Shanghai Youth Association. He is also an executive member of Hongkong-Shanghai Economic Development Association since February 2018 and a member of The Y. Elites Association since November 2008. He has also been a member of the 13th The Chinese People’s Political Consultative Conference (the ‘‘CPPCC’’) Shanghai Committee since July 2018, Shanghai Chinese Overseas Friendship Association since 2015, the vice president of Shanghai Hong Kong Association since August 2015, the vice president of Shanghai Jing’an Overseas Friendship Association since November 2017, the member of Shanghai Jingan Youth Federation since October 2020 and appointed as a member of the first executive committee of Shanghai Jingan Federation of Industry and Commerce from January 2016 to January 2021.

Mr. Vincent Fong obtained a Bachelor of Commerce degree from The University of British Columbia in Vancouver, Canada in May 2003. Mr. Vincent Fong was admitted to the roll of The Keepers of the Quaich, a society which recognizes people who have shown outstanding commitment to the Scotch whisky industry, in October 2018.

Mr. Vincent Fong was a director of the following company at the time of its dissolution. The relevant details are as follows:

Nature of business Place of immediately prior Date of Means of Reason for Company name incorporation Position held to dissolution dissolution dissolution dissolution

5 S Catering Management Hong Kong Director Food and beverage January 30, Deregistration Cessation of Company Limited business 2009 business 五味飲食管理有限公司

Mr. Vincent Fong confirmed that the above company was solvent immediately prior to its dissolution. Mr. Vincent Fong further confirmed that there was no fraudulent act or misfeasance on his part leading to the dissolution of the company and he is not aware of any actual or potential claim that has been or will be made against him as a result of the dissolution of the company.

Independent non-executive Directors

Mr. LAU Ip Keung Kenneth (劉業強) (‘‘Mr. Lau’’), BBS, MH, JP, aged 54, was appointed as an independent non-executive Director on [.]. He is a member of the Audit Committee. He is primarily responsible for supervising and providing independent judgement to our Board.

Mr. Lau is the vice chairman of Wing Tung Yick Holdings Limited, a company principally engaged in property holding and investment since April 1995. Mr. Lau has assumed various positions in numerous statutory bodies in Hong Kong, which includes being a member of the Legislative Council of Hong Kong for the Heung Yee Kuk functional constituency since October 2016; a member of Tuen Mun District Council since May 2016; the chairman of the Heung Yee Kuk since June 2015; an indigenous inhabitant representative of Lung Kwu Tan, Tuen Mun, since May 2016; the chairman of the Tuen Mun Rural Committee since May 2016; and the vice chairman of the Business and Professionals Alliance for Hong Kong since October 2016. He has also been a member of the National Committee of the CPPCC since March 2013.

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Mr. Lau obtained a Bachelor of Science (Economics) degree with Honors in Statistics from The London School of Economics and Political Science, the University of London, the United Kingdom, in August 1990. He was appointed by the government of Hong Kong as a Justice of the Peace in 2002 and a New Territories Justice of the Peace in 2007, respectively. Mr. Lau was also awarded the Medal of Honour and Bronze Bauhinia Star by the government of Hong Kong Government in 1999 and 2017, respectively.

Mr. Lau has been serving as an independent non-executive director of Evergreen Products Group Limited (a company listed on the Main Board of the Stock Exchange (stock code: 1962)) since June 2017.

Mr. Lau was a director of the following companies at the time of their respective dissolution. The relevant details are as follows:

Nature of business Place of immediately prior Date of Means of Reason for Company name incorporation Position held to dissolution dissolution dissolution dissolution

Best Display Development Hong Kong Director Investment holding April 23, 2021 Striking off Dormant Limited 會展發展有限公司 China Tiger Capital Hong Kong Director Investment holding December 24, Deregistration Cessation of Management Limited 2015 business 泰極資產管理有限公司 Enterprise Fortune Hong Kong Director Investment holding September 23, Deregistration Cessation of International Limited 2011 business 業祥國際有限公司 Environmental Waste Hong Kong Director Waste management March 16, Deregistration Cessation of Management Limited business 2012 business 環保廢物管理有限公司 Fat King Limited Hong Kong Director Investment holding December 15, Deregistration Cessation of 發景有限公司 2000 business Golden Vice Limited Hong Kong Director Investment holding August 19, Deregistration Cessation of 金捷有限公司 2011 business GrandGainHoldings Hong Kong Director Trading business August 30, Striking off Dormant Limited 2019 宏景集團有限公司 Happy Wide Development Hong Kong Director Investment holding April 30, 2004 Deregistration Cessation of Limited business 民樂發展有限公司 Hong Kong Ling Ding Hong Kong Director Investment holding January 18, Striking off Dormant Ocean Traffic 2002 Investment Limited 香港伶仃洋交通投資有限公司 National Wealth Enterprises Hong Kong Director Investment holding April 30, 2004 Deregistration Cessation of Limited business 民興企業有限公司 Sheen Sino Development Hong Kong Director Investment holding November 30, Deregistration Cessation of Limited 2001 business 亨中發展有限公司

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Nature of business Place of immediately prior Date of Means of Reason for Company name incorporation Position held to dissolution dissolution dissolution dissolution

Sheng Yao (China) Hong Kong Director Investment holding March 5, 2021 Deregistration Cessation of Company Limited business 盛耀(中國)有限公司 Wing Tung Yick Property Hong Kong Director Property investment October 7, Deregistration Cessation of Management Limited 2011 business 永同益物業管理有限公司

Mr. Lau confirmed that the above companies were solvent immediately prior to their respective dissolution. Mr. Lau further confirmed that there was no fraudulent act or misfeasance on his part leading to the dissolution of such companies and he is not aware of any actual or potential claim that has been or will be made against him as a result of the dissolution of such companies.

Mr. WU Thomas Jefferson (胡文新) (‘‘Mr. Wu’’), aged 48, was appointed as an independent non-executive Director on [.]. He is the chairman of the Remuneration Committee and a member of the Nomination Committee and the Audit Committee. He is primarily responsible for supervising and providing independent judgement to our Board.

Mr. Wu was the executive director, deputy chairman and managing director of Hopewell Holdings Limited (a business conglomerate engaged in property development and investment, power, hotel and hospitality and other businesses which was voluntarily de-listed from the Stock Exchange). Mr. Wu joined Hopewell Holdings Limited in 1999 and has served in various roles within Hopewell Holdings Limited group, including group controller from March 2000 to June 2001, executive director from June 2001 to May 2019, chief operating officer from January 2002 to August 2003, deputy managing director from August 2003 to June 2007, co-managing director from July 2007 to September 2009, managing director from October 2009 to May 2019 and further appointed as deputy chairman from February 2018 to May 2019. Mr. Wu was an executive director, managing director and non-executive director of Shenzhen Investment Holdings Bay Area Development Company Limited) (formerly known as Hopewell Highway Infrastructure Limited (a company engaged in highway and infrastructure businesses and listed on the Stock Exchange (stock codes: 737 (HKD counter) and 80737 (RMB counter)) from January 2003 to April 2018, from July 2003 to April 2018 and from April 2018 to May 2018, respectively. In addition, he has been an independent non-executive director of Melco Resorts & Entertainment Limited (‘‘Melco Resorts,’’ formerly known as Melco PBL Entertainment (Macau) Limited and Melco Crown Entertainment Limited, respectively) (a company that is a developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia and listed on NASDAQ Global Select Market in the US (ticker: MLCO)) since December 2006 and is also the chairman of the compensation committee and a member of the audit and risk committee and nominating and corporate governance committee of Melco Resorts.

Mr. Wu is active in public service in both Hong Kong and China. Mr. Wu serves in a number of advisory roles at different levels of the government. In China, he is a member of the 13th National Committee of the CPPCC, a member of the 11th & 12th Heilongjiang Provincial Committee of the CPPCC, a member of the 8th and 9th Guangzhou Municipality Huadu District Committee of the CPPCC (‘‘Huadu CPPCC’’) and a Standing Committee member of the 9th Huadu CPPCC, among other public service capacities.

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In Hong Kong, Mr. Wu’s major public service appointments include being a board member of The Airport Authority of government of Hong Kong since June 2019, a member of Friends of Hong Kong Association Limited since June 2018 and was appointed as a deputy director of Economic Affairs Committee since September 2018, the Honorary Advisor of the Hong Kong Army Cadets Association since September 2018, a member of the Energy Advisory Committee of the Environment Bureau of the government of Hong Kong since July 2016 and a Vice Patron of the Community Chest of Hong Kong since June 2014. He was previously a member of the Hong Kong Tourism Board from January 2015 to December 2020, a member of the Standing Committee on Disciplined Services Salaries and Conditions of Service of the government of Hong Kong from January 2013 to December 2018, a council member of The Hong Kong Polytechnic University from April 2009 to March 2012 and the Hong Kong Baptist University from January 2013 to December 2015, a member of the University Court of The Hong Kong University of Science and Technology from July 2009 to July 2012, a board member of the Asian Youth Orchestra Limited from December 2011 to July 2016, a member of the Committee on Real Estate Investment Trusts of the SFC since April 2017, and a member of the Business School Advisory Council of the Hong Kong University of Science and Technology since June 2013.

In 2006, the World Economic Forum selected Mr. Wu as a ‘‘Young Global Leader.’’ He was also awarded the ‘‘Director of the Year Award’’ by the Hong Kong Institute of Directors in 2010. He also received the ‘‘Asian Corporate Director Recognition Awards’’ from the Corporate Governance Asia in 2011, 2012 and 2013, and was named ‘‘Asia’s Best CEO (Investor Relations)’’ in 2012, 2013 and 2014.

In addition to Mr. Wu’s professional and public service engagements, Mr. Wu is mostly known for his passion for ice hockey, as well as the sport’s development in Hong Kong and the region. Mr. Wu has been the chairman of the Hong Kong Ice Hockey Officials Association since August 2014, the vice president of the International Ice Hockey Federation since 2012, the honorary president of the Hong Kong Ice Hockey Association Limited, as well as the honorary chairman of the Chinese Taipei Ice Hockey Federation since 2011, vice-chairman of Chinese Ice Hockey Association since July 2008. Mr. Wu is also the co-founder and chairman of Hong Kong Academy of Ice Hockey Limited since February 2007 and honorary president of Macau Ice Sports Federation since May 2007 and the chairman of the Hong Kong Amateur Hockey Club Limited since October 2001.

Mr. Wu obtained a Bachelor of Science degree in Mechanical and Aerospace Engineering with high honors from Princeton University, the United States, in June 1994. He then worked in Japan for Mitsubishi Electric Corporation from September 1994 to January 1997 before returning to full-time studies at Stanford University, the United States, where he obtained a Master of Business Administration degree in June 1999. In October 2015, he was conferred an honorary fellowship by Lingnan University, Hong Kong.

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Mr. Wu was a director of the following companies at the time of their respective dissolution. The relevant details are as follows:

Place of incorporation Nature of business or immediately prior Date of Means of Reason for Company name establishment Position held to dissolution dissolution dissolution dissolution

Juliwell Limited Hong Kong Director Inactive September 11, Deregistration Cessation of 早利好有限公司 2009 business Advance Fame Hong Kong Director Inactive June 24, Deregistration Completion of Development Limited 2016 business 進菲發展有限公司 project Consolidated Construction Hong Kong Director Inactive February 13, Deregistration Cessation of Resources Limited 2015 business Elite Will Enterprises Hong Kong Director Property investment July 29, 2016 Deregistration Cessation of Limited business 精偉企業有限公司 F016 Company Limited Hong Kong Director Provision of March 20, Deregistration Cessation of financial services 2015 business to group companies Fully Pleasure Investment Hong Kong Director Property investment May 8, 2015 Deregistration Cessation of Limited business 喜上來投資有限公司 Gain Million Resources Hong Kong Director Property investment April 22, 2016 Deregistration Cessation of Limited business 益貿資源有限公司 H124 Company Limited Hong Kong Director Inactive December 19, Deregistration Cessation of 2014 business Lok Foo Company Limited Hong Kong Director Inactive January 2, Deregistration Cessation of 樂富有限公司 2015 business Parkgate Enterprises Hong Kong Director Property investment July 15, 2016 Deregistration Cessation of Limited business Pronto Investments Limited Hong Kong Director Property investment October 24, Deregistration Cessation of 2014 business Union Comfort Enterprises Hong Kong Director Property investment June 19, 2015 Deregistration Cessation of Limited business 聯康富企業有限公司 Ying Tat Estates Limited Hong Kong Director Investment holding December 10, Creditors’ Cessation of 英達地產有限公司 2004 Voluntary business Winding Up Guangdong Hopewell PRC Director Highway November 7, Deregistration Completion of Guangzhu Expressway development 2011 business Development Co., Ltd. project 廣東合和廣珠高速公路發展有限公司 Zhanjiang Wuchuan PRC Director Wind power February 17, Deregistration Completion of Hopewell Wind Power investment 2015 business Technology Co., Ltd. project 湛江吳川合和風電科技有限公司

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Mr. Wu confirmed that the above companies were solvent immediately prior to their respective dissolution. Mr. Wu further confirmed that there was no fraudulent act or misfeasance on his part leading to the dissolution of such companies and he is not aware of any actual or potential claim that has been or will be made against him as a result of the dissolution of such companies.

Ms. HO Nga Yee (何雅儀) (‘‘Ms. Ho’’), aged 57, was appointed as an independent non-executive Director on [.]. She is the chairlady of the Audit Committee, a member of the Remuneration Committee and the Nomination Committee. She is primarily responsible for supervising and providing independent judgement to our Board.

Ms. Ho has more than 35 years of experience in audit and accounting. Ms. Ho has been providing accounting and audit services to various private companies since August 2018. Prior to that, Ms. Ho worked as the chief financial officer at several companies where she was responsible for overseeing financial and accounting activities, namely (i) New Headline (Hong Kong) Limited, a company engaged in the provision of environmental and construction management services, from February 2015 to July 2018; (ii) Financial Services China (Hong Kong) Limited, a company engaged in the provision of financial services, from December 2012 to January 2015; and (iii) The Style Merchants Limited, a company listed on the Singapore Exchange Limited during the period from July 2000 to February 2012 and had been engaged in the businesses of information technology, media and interactive entertainment as well as fashion retail, from October 2000 to November 2012. From September 1993 to September 2000, Ms. Ho worked at Legend Holdings Limited, (a company engaged in personal computers and related businesses and listed on the Main Board of the Stock Exchange (stock code: 992), which was subsequently known as Legend Group Limited (from April 2002 to March 2004) and now known as Lenovo Group Limited), where she was responsible for overseeing financial and accounting activities and her last position was deputy general manager in the accounting department. Ms. Ho started her career with Coopers & Lybrand, an accounting firm, in July 1985, where her last position was a supervisor in the audit division, primarily responsible for project audit, before she left in August 1993.

Ms. Ho obtained a Professional Diploma in Company Secretaryship and Administration from the Hong Kong Polytechnic University in November 1985 and a Bachelor of Arts degree in Accountancy from the Hong Kong Polytechnic University in November 1996. She then obtained a Master in Business Administration from the Hong Kong University of Science and Technology in November 2000. Ms. Ho has been an associate of the Hong Kong Society of Accountants (now known as the Hong Kong Institute of Certified Public Accountants) since February 1993 and was admitted as an associate of the Chartered Association of Certified Accountants (‘‘ACCA’’) in July 1992 and subsequently became a fellow of ACCA in July 1997. Ms. Ho was elected as an associate of The Institute of Chartered Secretaries and Administrators (now known as The Chartered Governance Institute) and the Hong Kong Institute of Chartered Secretaries since November 1988.

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Ms. Ho was a director of the following company at the time of its dissolution. The relevant details are as follows:

Nature of business Place of immediately prior Date of Means of Reason for Company name incorporation Position held to dissolution dissolution dissolution dissolution

Financial Services China Hong Kong Director Provision of May 22, 2015 Deregistration Group Consulting (Hong Kong) consultancy reorganization Limited services 中金金融諮詢服務(香港)有限公司

Ms. Ho confirmed that the above company was solvent immediately prior to its dissolution. Ms. Ho further confirmed that there was no fraudulent act or misfeasance on her part leading to the dissolution of the company and she is not aware of any actual or potential claim that has been or will be made against her as a result of the dissolution of the company.

Save as disclosed above in ‘‘— Board of Directors’’ above, each Director has not held any other directorships in listed companies during the three years immediately prior to the Latest Practicable Date and there is no other information in respect of our Directors to be disclosed pursuant to Rule 13.51(2) of the Listing Rules and there is no other matter that needs to be brought to the attention of the Shareholders.

SENIOR MANAGEMENT

The senior management of our Group are responsible for the day-to-day management of our business and comprise our executive Directors as well as the following individuals.

Date of Relationship with appointment other Directors, of the Date of senior management current joining our Principal and Controlling Name Age Position position Group responsibilities Shareholders

Lowieden Edora 56 Group general January 1, June 1, 1995 Overseeing the sales, Spouse of Ms. Lucia EDJAN manager 2010 marketing and Fong; brother-in-law (spirits, wine, inventory control of of Mr. Kenneth beer and the wine and spirits Fong, Ms. Emily specialty department of our Fong and Mr. beverage) Group Vincent Fong; son- in-lawofMr.C.Y. Fong

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Date of Relationship with appointment other Directors, of the Date of senior management current joining our Principal and Controlling Name Age Position position Group responsibilities Shareholders

CHAN Suk Ming 51 General manager January 20, January 15, Overseeing the sales, Nil (陳淑明) of the 2005 1996 marketing and beverage inventory control of division soft beverages and the development of our brand Tao Ti

KONG Fanyi 47 Financial September September Finance and accounting Nil (孔繁怡) controller 10, 2007 10, 2007 management of our (China) operation in China

LAM Yiu Keung 43 Financial February 18, February 18, Finance and accounting Nil (林耀強) controller 2021 2021 management of our (Hong Kong) operation in Hong Kong

CHIN Yin Hon 63 Chief operating June 1, 2021 June 1, 2021 Assisting Mr. Vincent Nil officer Fong, our chief (China) executive officer (China), to oversee our day-to-day operations in China

Mr. Lowieden Edora EDJAN (‘‘Mr. Edjan’’), aged 56, was appointed as our Group general manager (spirits, wine, beer and specialty beverage) on January 1, 2010. He is currently a director of our subsidiary Telford Wine & Spirits (S).

Mr. Edjan joined our Group as a business development manager of Telford International in June 1995 and has been serving our Group for over 25 years. He is primarily responsible for overseeing the sales, marketing and inventory control of the wine and spirits division of our Group.

Mr. Edjan obtained a Bachelor of Science degree in Pharmacy from The University of British Columbia in Vancouver, Canada in May 1990. He was previously registered as a pharmacist in British Columbia, Canada in June 1990. Mr. Edjan was admitted to the roll of The Keepers of the Quaich, a society which recognizes people who have shown outstanding commitment to the Scotch whisky industry in, October 2019.

Ms. CHAN Suk Ming (陳淑明) (‘‘Ms. Chan’’), aged 51, was appointed as the general manager of the beverage division of our Group on January 20, 2005.

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Ms. Chan joined our Group as a brand manager of Telford International in January 1996 and has been serving in the beverage division of our Group for over 25 years. She is primarily responsible for overseeing the sales, marketing and inventory control of soft beverages and the development of our brand Tao Ti.

Ms. Chan obtained a Bachelor of Arts degree in Language and Communication from The Hong Kong Polytechnic University in October 1992, and a Master of Business Administration degree from the University of Leicester in January 2006 through long distance learning.

Ms. KONG Fanyi (孔繁怡) (‘‘Ms. Kong’’), aged 47, was appointed as the financial controller (China) of our Group on September 10, 2007.

Ms. Kong has over 25 years of experience in audit and accounting. Ms. Kong joined our Group as the financial controller of Telford Wine & Spirits (S) in September 2007, where she is primarily responsible for the finance and accounting management of our operations in China. Prior to joining our Group, Ms. Kong worked for KPMG Huazhen Shanghai Branch, an accounting firm, from July 1995 to October 2002 with her last position as an assistant manager.

Ms. Kong obtained a Bachelor of Commerce and Administration degree from the Victoria University of Wellington, New Zealand in May 2005. She has been an affiliate of the Association of Chartered Certified Accountants since August 2007.

Mr. LAM Yiu Keung (林耀強) (‘‘Mr. Lam’’), aged 43, was appointed as the financial controller (Hong Kong) of our Group on February 18, 2021.

Mr. Lam has over 20 years of experience in audit and accounting. Mr. Lam joined our Group in February 2021 as our financial controller (Hong Kong), where he is responsible for finance and accounting management of our operation in Hong Kong.

Prior to joining our Group, Mr. Lam worked at China Everbright International Limited (now known as China Everbright Environment Group Limited, a company engaged in energy and infrastructure-related businesses and listed on the Main Board of the Stock Exchange (stock code: 257)) from May 2006 to March 2020, where he was responsible for the accounts and finance functions of the company and his last position was general manager in the finance management department. Mr. Lam joined NWS Service Management Limited (a wholly-owned subsidiary of NWS Holdings Limited, a company engaged in construction business and listed on the Main Board of the Stock Exchange (stock code: 659)) as an assistant finance manager from August 2004 to May 2006. Prior to joining the listed companies above, Mr. Lam worked in Ernst & Young, an accounting firm, from February 2000 to August 2004 where his last position was a senior accountant.

Mr. Lam obtained a Bachelor of Arts degree in Accountancy from The Hong Kong Polytechnic University in December 1999. He has been a fellow of the Hong Kong Institute of Certified Public Accountants since September 2020 and a fellow of the Association of Chartered Certified Accountants since May 2008.

Mr. CHIN Yin Hon (‘‘Mr. Chin’’), aged 63, was appointed as the chief operating officer (China) of our Group on June 1, 2021.

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Mr. Chin joined our Group as the chief operating officer of Telford Wine & Spirits (S) in June 2021. He is primarily responsible for assisting Mr. Vincent Fong, our chief executive officer (China) to oversee our day-to-day operations in China.

Prior to joining our Group, Mr. Chin gained over 20 years of management and operational experience in the PRC working for multinational wine and spirit companies with global brands.

He worked for Bacardi-Martini Asia Pacific Limited from January 2016 to December 2020, initially as the chief executive officer (Greater China, North Asia and Oceania) and vice chairman of Greater China from January 2016 to January 2018, and became an executive advisor of Greater China of Bacardi Wines & Spirits Co., Limited in February 2018, a position he held until he left the company. Mr. Chin was the managing director of Greater China in Shanghai RC Trading Limited (a member of Rémy Cointreau group) from March 2007 to December 2015. Before that, he was the regional director of east and north China at Moët Hennessy Diageo China Co. Ltd. from April 2000 to July 2007.

Mr. Chin obtained a Bachelor of Commerce degree from Concordia University, Montreal, Canada in May 1982.

COMPANY SECRETARY

Ms. NG Kit Ying (吳潔凝) (‘‘Ms. Ng’’), aged 50, was appointed as the company secretary of our Company on June 21, 2021 and is responsible for our corporate governance, compliance and company secretarial affairs.

Ms. Ng has over 23 years of experience in marketing and company secretarial matters. Ms. Ng joined our Group in July 1997 as a marketing executive of Telford International, she was then promoted to a marketing analyst in January 2001 and was further promoted to an executive assistant and held the position since February 2002.

Ms. Ng obtained a Bachelor of Social Sciences in China Studies (Economics) degree from Hong Kong Baptist University in December 1993. She then obtained a Master in Business Administration from University of Bradford in December 1996 and a Master of Corporate Governance from The Hong Kong Polytechnic University in October 2008. Ms. Ng has been an associate of The Chartered Governance Institute since February 2009 and was admitted as an associate of The Hong Kong Institute of Chartered Secretaries since February 2009.

During the three years immediately preceding the Latest Practicable Date, Ms. Ng has not held any directorship in any public companies the securities of which are listed on any securities market in Hong Kong or overseas.

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BOARD COMMITTEES

Our Board of Directors has established the Audit Committee, the Remuneration Committee and the Nomination Committee.

Audit Committee

Our Company has established the Audit Committee in compliance with Rule 3.21 of the Listing Rules and the Corporate Governance Code as set out in Appendix 14 to the Listing Rules. The primary duties of the Audit Committee are to oversee the financial reporting system and internal control procedures of our Company, review the financial information of our Company and consider issues relating to the external auditors and their appointment.

The Audit Committee consists of three Directors. The members of the Audit Committee are:

HO Nga Yee (何雅儀) (Chairlady)

LAU Ip Keung Kenneth (劉業強)

WU Thomas Jefferson (胡文新)

Remuneration Committee

Our Company has established the Remuneration Committee of our Board of Directors in compliance with Rule 3.25 of the Listing Rules and the Corporate Governance Code as set out in Appendix 14 to the Listing Rules. The primary duties of the Remuneration Committee are to make recommendations to our Board of Directors on our Company’s policy and structure for all remuneration of Directors and senior management and on the establishment of a formal and transparent procedure for developing policy on such remuneration.

The Remuneration Committee consists of three Directors. The members of the Remuneration Committee are:

WU Thomas Jefferson (胡文新) (Chairman)

HO Nga Yee (何雅儀)

FONG So Ching Lucia (方素貞)

Nomination Committee

Our Company has established the Nomination Committee of our Board of Directors as recommended by the Corporate Governance Code as set out in Appendix 14 to the Listing Rules. The primary duties of the Nomination Committee are to review the structure, size and composition of our Board of Directors, assess the independence of the independent non-executive Directors and make recommendations to our Board of Directors on the appointment and re-appointment of Directors and succession planning for Directors.

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The Nomination Committee consists of three Directors. The members of the Nomination Committee are:

FONG Chun Man (方振文) (Chairman)

WU Thomas Jefferson (胡文新)

HO Nga Yee (何雅儀)

DIRECTORS’ REMUNERATION AND REMUNERATION OF FIVE HIGHEST PAID INDIVIDUALS

For 2018, 2019 and 2020, the aggregate amount of the fees, salaries, housing allowances, other allowances, benefits in kind (including contributions to pension schemes) and bonuses paid/payable by our Group to our Directors were approximately HK$8.6 million, HK$9.1 million and HK$9.3 million, respectively.

Under the proposed arrangements to be put in place, the estimated total remuneration and benefits payable to our Directors by our Group for 2021 is approximately HK$9.1 million.

For 2018, 2019 and 2020, two of the five highest paid individuals were Directors. The aggregate amount of the fees, salaries, housing allowances, other allowances, benefits in kind (including contributions to pension schemes) and bonuses paid/payable by our Group to the three remaining highest paid individuals were approximately HK$5.8 million, HK$6.1 million and HK$5.6 million, respectively.

During the Track Record Period, no remuneration was paid to our Directors or the five highest paid individuals as an inducement to join or upon joining our Group. No compensation was paid to, or receivable by, our Directors or the five highest paid individuals for the loss of office as director of any member of our Group or of any other office in connection with the management of the affairs of any member of our Group. None of our Directors had waived any remuneration and/or emoluments during the Track Record Period.

See ‘‘Appendix IV — Statutory and General Information — Further Information about our Directors and Substantial Shareholders — Particulars of Directors’ Letters of Appointment’’ for information on the service contracts and letters of appointment entered into between our Company and our Directors.

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

Our Company will comply with the Corporate Governance Code, with the exception of code provision A.2.1, which requires the roles of chairman and chief executive to be separate and not to be performed by the same individual.

Mr. Kenneth Fong currently holds both positions. Throughout our history, Mr. Kenneth Fong, our chairman, chief executive officer, executive Director and Controlling Shareholder, has held key leadership position of our Group and has been responsible for the formulation of the strategic direction and business development plans of our Group, as well as overseeing the overall operations and management of our Group. Our Directors [(including our independent non-executive Directors)] consider

– 204 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. DIRECTORS AND SENIOR MANAGEMENT that Mr. Kenneth Fong is the best candidate for both positions and the present arrangements are beneficial and in the interests of our Group and our Shareholders as a whole. Our Board will consider and review the present arrangements from time to time.

Our Directors will review our corporate governance policies and compliance with the Corporate Governance Code each financial year and apply the “comply or explain” principle in our corporate governance report which will be included in our annual reports after the [REDACTED].

DIVERSITY

Our Directors have a balanced mix of experience and industry background, including but not limited to experience in the fields of beverage, public service, politics as well as auditing and accounting. Further, our Directors range from 40 years old to 57 years old, and comprise four male and two female. The three independent non-executive Directors who have different industry backgrounds, represent half of our Board members.

We have adopted a Board diversity policy which sets out the approach to achieve and maintain an appropriate balance of diversity perspectives of our Board that are relevant to our business growth. Pursuant to our Board diversity policy, selection of Board candidates will be based on a range of diversity perspectives with reference to our Company’s business model and specific needs, including but not limited to gender, age, cultural and educational background, ethnicity, professional qualifications, skills, knowledge and industry experience. The ultimate decision will be based on merit and contribution that the selected candidates will bring to our Board.

Our Nomination Committee is responsible for ensuring the diversity of our Board. After the [REDACTED], our Nomination Committee will review our Board diversity policy from time to time to ensure its continued effectiveness and we will disclose the implementation of our Board diversity policy in our corporate governance report on an annual basis.

DIRECTORS’ INTEREST IN COMPETING BUSINESS

As of the Latest Practicable Date, none of our Directors was interested in any business which competes or is likely to compete, directly or indirectly, with our business.

COMPLIANCE ADVISER

Our Company has appointed HeungKong Capital Limited as our compliance adviser pursuant to Rule 3A.19 of the Listing Rules to provide advisory services to our Company. In compliance with Rule 3A.23 of the Listing Rules, our Company must consult with, and if necessary, seek advice from, the compliance adviser on a timely basis in the following circumstances:

(a) Before the publication of any regulatory announcement, circular or financial report;

(b) Where a transaction, which might be a notifiable or connected transaction, is contemplated including share issues and share repurchases;

(c) Where our Company proposes to use the [REDACTED] of the [REDACTED] in a manner different from that detailed in this document or where our Group’s business activities, developments or results of operation deviate from any forecast, estimate or other information in this document; and

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(d) Where the Stock Exchange makes an inquiry under Rule 13.10 of the Listing Rules regarding unusual movements in the price or trading volume of the Shares, the possible development of a false market in the Shares or any other matters.

The term of the appointment of the compliance adviser will commence on the [REDACTED] and will end on the date on which our Company distributes its annual report in respect of its financial results for the first full financial year commencing after the [REDACTED].

SHARE OPTION SCHEME

Employees of any member of our Group and any supplier of goods or services, any client, any person or entity that provides research, development or other technological support, any shareholder, consultant or other participant who contributes to the development and growth of our Group are entitled to participate in the Share Option Scheme at the discretion of our Board. See ‘‘Appendix IV — D. Share Option Scheme’’ for details on the principal terms of the Share Option Scheme.

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SUBSTANTIAL SHAREHOLDERS

So far as is known to our Directors as of the Latest Practicable Date, immediately following completion of the [REDACTED] and the [REDACTED] (without taking into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme), the following persons/entities will have an interest or a short position in the Shares or underlying Shares which would be required to be disclosed to our Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, directly or indirectly, be interested in 10% or more of the Shares, once the Shares are [REDACTED] on the Stock Exchange:

Interest and Long Positions in the Shares of Our Company

Upon completion of As of the date of the [REDACTED] and this document the [REDACTED] Number of Percentage of Number of Percentage of Capacity/Nature of Shares held or shareholding Shares held or shareholding Name interest interested (%) interested (%)

Eminent Leader Beneficial owner 10 100 [REDACTED] [REDACTED]

Mr. C. Y. Fong Interest of a controlled 10 100 [REDACTED] [REDACTED] corporation(1)

Ms. Kay Interest of spouse(2) 10 100 [REDACTED] [REDACTED]

(1) Mr. C. Y. Fong legally and beneficially owns 99.96% of the issued shares of Eminent Leader. Mr. C. Y. Fong is therefore deemed to be interested in all the Shares held by Eminent Leader by virtue of the SFO.

(2) Ms. Kay is the spouse of Mr. C. Y. Fong and is therefore deemed to be interested in all the Shares held or interested in by Mr. C. Y. Fong by virtue of the SFO.

(3) This table does not take into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED].

Save as disclosed above, our Directors are not aware of any person who will, immediately following completion of the [REDACTED] and the [REDACTED] (excluding Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme), have an interest or short position in the Shares or underlying Shares which would be required to be disclosed to our Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, directly or indirectly, be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of our Group. Our Directors are not aware of any arrangement which may at a subsequent date result in a change of control of our Company.

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SHARE CAPITAL

The authorized and issued share capital of our Company fully paid up or credited as fully paid up immediately following the completion of the [REDACTED] and the [REDACTED] (without taking into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme) are as follows:

Authorized share capital: (HK$)

[REDACTED] Shares [REDACTED]

Shares in issue or to be issued, fully paid or credited as fully paid:

10 Shares in issue as of the date of this document 0.1

[REDACTED] [REDACTED] to be issued pursuant to the [REDACTED] [REDACTED]

[REDACTED] [REDACTED] to be issued pursuant to the [REDACTED] [REDACTED] (assuming the [REDACTED] is not exercised)

[REDACTED] Total Shares [REDACTED]

ASSUMPTIONS

The above table assumes that the [REDACTED] becomes unconditional and the issue of Shares pursuant to the [REDACTED] and the [REDACTED] are made. It takes no account of (i) any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme or (ii) any Shares which may be issued or repurchased by our Company pursuant to the general mandates granted to our Directors to issue or repurchase Shares as described below.

MINIMUM PUBLIC FLOAT

Pursuant to Rule 8.08(1) of the Listing Rules, at the time of [REDACTED] and at all times thereafter, our Company must maintain the minimum prescribed percentage of [REDACTED]% of our issued share capital in the hands of the public (as defined in the Listing Rules).

RANKINGS

The [REDACTED] will be ordinary shares in the share capital of our Company and will rank pari passu in all respects with all Shares in issue or to be issued as mentioned in this document and, in particular, will rank in full for all dividends or other distributions declared, made or paid on the Shares in respect of a record date which falls after the date of this document save for the entitlement under the [REDACTED].

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[REDACTED]

SHARE OPTION SCHEME

Pursuant to the written resolutions of the sole Shareholder passed on [.], 2021, our Company has conditionally adopted the Share Option Scheme. See ‘‘Appendix IV — Statutory and General Information — D. Share Option Scheme’’ for further information.

GENERAL MANDATES GRANTED TO OUR DIRECTORS

Subject to the [REDACTED] becoming unconditional, general mandates have been granted to our Directors to allot and issue our Shares and to repurchase our Shares. See ‘‘Appendix IV — Statutory and General Information — A. Further Information About Our Company — 4. Written Resolutions of the Sole Shareholder passed on [.], 2021’’ for further details.

CIRCUMSTANCES UNDER WHICH GENERAL MEETINGS ARE REQUIRED

See ‘‘Appendix III — Summary of the Constitution of Our Company and Cayman Islands Company Law — 2. Articles of Association’’ for the circumstances under which general meetings are required.

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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and notes included in ‘‘Appendix I — Accountant’s Report.’’ The financial information as set out in the Accountants’ Report incorporates the financial statements of the Company during the Track Record Period. You should read the whole Accountants’ Report as set out in Appendix I to this document and not rely merely on the information in this section. For the purpose of this section, unless the context otherwise requires, references to 2018, 2019 and 2020 refer to our financial years ended December 31 of such years.

The following discussion and analysis contain forward-looking statements that involve risks and uncertainties. These statements are based on assumptions and analysis made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. You should not place undue reliance on any such statements. Our actual future results and timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under ‘‘Risk Factors,’’ ‘‘Forward-Looking Statements’’ and elsewhere in this document.

OVERVIEW

We are a leading beverage company in Hong Kong and China. We have end-to-end platform capabilities covering research and development, raw material sourcing, production management, brand building, sales and marketing, and distribution and logistics for both In-house Brands and Third-party Brands and products. We sell In-house Brand Products under our In-house Brands, primarily Tao Ti and Meko, as well as offering internationally well-recognized Third-party Brand Products through our sales distribution network in Hong Kong and China. Our product portfolio covers a broad range of products ranging from international spirits and wines, natural, healthy and functional beverages, and other consumer drinks and food.

We have established an omni-channel sales and distribution network that is tailored to, and deep- rooted in, the respective local markets. Our sales distribution network enables us to rapidly and efficiently expand our market reach and increase our sales in China. In Hong Kong, we sell In-house Brand Products and Third-party Brand Products directly primarily to retailers, consisting of on-trade and off-trade customers. In China, we sell our products primarily through a wholesaler system to service our offline retailers of both on-trade and off-trade channels, and to a lesser extent directly to online and certain offline key account retailers, in order to maintain a full-spectrum coverage in the PRC market. As of December 31, 2020, our direct sales network consisted of 5,636 offline retailers in Hong Kong and 13 offline key account retailers in China, serviced by our direct sales force. As of the same date, our wholesaler system consisted of 80 regional wholesalers and 139 dealers to service our offline retailers in China. For our online sales, we had nine online direct sales customers and nine online stores operated by us or by e-commerce service providers. Sales of our products cover 31 provinces, municipalities and autonomous regions in China and Hong Kong.

We derive product sales revenues through selling the In-house Brand Products that we produce and the Third-Party Brand Products that we purchase from our brand partners through our sales and distribution network. On the supply end, leveraging our portfolio of In-house Brand Products and our exclusive and/or sole arrangements with our Third-party Brand Partners, we are able to offer full range of products to meet consumer trends in China and Hong Kong. On the consumer end, capitalizing on our

– 210 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. FINANCIAL INFORMATION capability to provide one-stop sales and marketing solutions and our extensive sales and distribution network, we are capable to promote our brands and products and therefore achieved sales growth during the Track Record Period. Our capabilities on both supply and consumer ends empower us with strong pricing power to maintain our stable profit margins during the Track Record Period.

We believe that our strong financial performance during the Track Record Period, notwithstanding the global outbreak of the COVID-19 pandemic in 2020, is primarily due to our superior capabilities to build up and expand our market reach and increase our sales in China. This has resulted in our revenue increasing from HK$1,355.5 million in 2018 to HK$1,838.8 million in 2019 and further to HK$1,857.6 million in 2020, representing a CAGR of 17.1%. Our gross profit also increased from HK$458.4 million in 2018 to HK$618.1 million in 2020, representing a CAGR of 16.1%.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our results of operations have been, and are expected to continue to be, materially affected by a number of key factors, including the following:

Consumer Demand for Our Products

Our results of operations are affected by consumer demand for our products. Accelerated urbanization and rising disposable income have increased the demand for ready-to-drink beverage products, international spirits and wines, which has been growing continuously. Consumer spending power has been continuously rising in China and in Hong Kong, which is also reflected through increased sales of our products. We and our results of operations largely depend on our ability to generate market demands and respond effectively to shifting consumer preferences.

We focus on natural, healthy and functional beverages and international spirits and wines in China. According to the F&S Report, in terms of retail sales value, the natural, healthy and functional soft beverages market is projected to grow at a CAGR of 7.2% between 2020 and 2025, reaching RMB762.9 billion in 2025. According to the F&S Report, in terms of retail sales value, the import international spirits and wines market in China is projected to grow at a CAGR of 10.4% between 2020 and 2025, reaching RMB164.9 billion in 2025, which is expected to significantly outperform the growth rate of the overall alcoholic beverage market in China, which is projected to grow at a CAGR of 3.9% between 2020 and 2025. We have established and maintained a product portfolio that falls within the rapidly developing market sectors, and the changing demands and preferences of the consumers could generally affect our financial performance.

Portfolio and Product Mix

We have a diversified product mix which primarily includes natural, healthy and functional beverages, international spirits and wines. We possess an expansive portfolio of various brands to capture varying tastes and preferences in consumer demand. We also actively explore opportunities with new suitable brands partners in order to introduce them to the Hong Kong and China markets. We consider it important to maintain and continue to expand our brand partner base to maintain and grow our revenues. See ‘‘Business — Our Brand partners’’ for further details. Typically, different products vary in product pricing, revenue growth rate and gross profit margin. Different brands and products have different unique positioning with different marketing strategies and promotional costs. In addition, given

– 211 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. FINANCIAL INFORMATION that our brand partners are from different regions, our purchases of their products would thus be subject to foreign exchange fluctuations. As a result, our revenue and profitability are largely affected by our product mix.

The table below sets forth our gross profit margin of our key products during the Track Record Period. Year Ended December 31, 2018 2019 2020

Natural, healthy and functional beverages ...... 38.4% 39.9% 40.5% Internationalspiritsandwines...... 30.5% 31.8% 31.1% Others(1) ...... 34.5% 35.5% 30.9%

(1) During the track record period, products under ‘‘others’’ category included primarily, beers, sakes, other non-alcoholic beverages, postmix and ready-to-drink food and snacks.

Effectiveness of Sales and Marketing Activities

The effectiveness of our sales and marketing activities is critical to our revenue growth. We communicate with consumers through various channels and touch points, including advertising, campaigns using bottle labels, product placement in film and title sponsorship in television programs, celebrity endorsements, sports event sponsorships, online live streaming, and cross-industry cooperation. The effectiveness of sales and marketing activities is relatively hard to predict and evaluate. Their effects may be delayed, resulting in a delayed revenue growth which may not be fully reflected during the period in which the sales and marketing activities took place.

For Third-party Brand Products, we generally share with our brand partners the advertising expenses spent on their respective brands and products promotion in the proportion and capped amount agreed between us. The table below sets forth a breakdown of our marketing expenses by brand categorization for the periods indicated: Year Ended December 31, 2018 2019 2020 Amount Amount Amount (HK$ in millions except for percentages)

In-house Brand Products Grossadvertisingexpenses...... 48.0 42.5 48.4 Netadvertisingexpenses...... 48.0 42.5 48.4 %bornebyus...... 100% 100% 100% Gross advertising expenses as a % of revenue from In-house Brand Products...... 14.3% 12.4% 15.8% Third-party Brand Products Grossadvertisingexpenses...... 88.6 104.2 96.8 Netadvertisingexpenses...... 24.5 21.6 21.0 %bornebyus...... 27.6% 20.8% 21.7% Gross advertising expenses as a % of revenue from Third-party Brand Products ...... 8.7% 7.0% 6.2%

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Whether we can effectively utilize these expenditure to generate revenues could materially affects our results of operations.

Sales and Distribution Network

We mainly operate through both direct sales and a wholesalers system where we engage wholesalers to distribute our products.

Our direct sales customers typically make relatively large purchases and have good credit records. They primarily include national or regional supermarkets, convenience store chains, restaurants and hotels. In 2018, 2019 and 2020, revenue from our direct sales customers accounted for 75.3%, 58.2% and 49.4% of our total revenue, respectively.

We also sell our products through our wholesalers system. In 2018, 2019 and 2020, revenue from our wholesalers accounted for 19.0%, 35.4% and 44.0% of our total revenue, respectively.

Our online sales to consumers are primarily conducted through our direct sales to various e- commerce platforms like JD.com, Tmall and HKTVmall.com. In addition, we also operate online stores on various e-commerce platforms, such as Tmall and WeChat mini program. In 2018, 2019 and 2020, revenue from our online sales accounted for 5.7%, 6.4% and 6.6% of our total revenue, respectively.

The table below sets forth revenue breakdown by sales channel for the periods indicated:

Year Ended December 31, 2018 2019 2020 % of total % of total % of total Amount revenue Amount revenue Amount revenue (HK$ in millions except for percentages)

Offline...... 1,277.8 94.3 1,721.5 93.6 1,734.7 93.4 Wholesalers...... 257.0 19.0 651.7 35.4 818.0 44.0 Directsales...... 1,020.8 75.3 1,069.8 58.2 916.7 49.4 HongKong...... 946.3 69.8 969.4 52.7 849.6 45.7 China...... 74.5 5.5 100.4 5.5 67.1 3.6 Online ...... 77.7 5.7 117.3 6.4 122.9 6.6

Total ...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0

We typically do not grant any credit term to our wholesalers. For our retailers, we may grant a credit term of 30 to 90 days. An increase in sales from our direct sales customers would result in an increase in our trade receivables. Our trade receivables would increase prior to the peak sales period such as Chinese New Year due to advanced inventory stock up by our customers. Our revenue from sales to direct sales customers increased from HK$1,020.8 million in 2018 to HK$1,069.8 million in 2019 and decreased to HK$916.7 million in 2020, primarily affected by COVID-19. Accordingly, during

– 213 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. FINANCIAL INFORMATION the same period, our trade receivables increased from HK$227.8 million as of December 31, 2018 to HK$285.3 million as of December 31, 2019 and decreased to HK$201.5 million as of December 31, 2020, which is generally in line with change of revenue contribution from our direct sales customers.

BASIS OF PRESENTATION

The Company was incorporated in the Cayman Islands on March 30, 2021 as an exempted company with limited liability and in 2021, became the holding company of the companies now comprising our Group upon the completion of the Reorganization. See ‘‘History, Reorganization, Development and Corporate Structure.’’

Immediately prior to and after the Reorganization as set out in Note 1.2 to ‘‘Appendix I — Accountant’s Report’’, the business of our Group is ultimately controlled by the Controlling Shareholders, and is conducted through the subsidiaries of our Group. Pursuant to the Reorganization, the subsidiaries now comprising the Group are transferred to and held by the Company. The Company has not been involved in any other business prior to the Reorganization and do not meet the definition of a business. The Reorganization is merely a recapitalization of the business of our Group with no change in management of such business and the ultimate owners of such business of our Group remain the same. Accordingly, the Group resulting from the Reorganization is regarded as a continuation of the business of our Group under the subsidiaries now comprising the Group and, for the purpose of the Accountant’s Report set out in Appendix I to this document, the historical financial information for the Group as of and for the years ended December 31, 2018, 2019 and 2020 has been prepared and presented as a continuation of the combined financial statements of the subsidiaries now comprising our Group, with the assets and liabilities of our Group recognized and measured at the carrying amounts of the business of our Group for all periods presented.

Inter-company transactions, balances and unrealised (losses)/gains on transactions between group companies are eliminated upon combination.

BASIS OF PREPARATION

The historical financial information has been prepared in accordance with HKFRSs issued by the HKICPA. They have been prepared under the historical cost convention.

The preparation of historical financial information in conformity with HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying our accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 4 to the Accountants’ Report in Appendix I to this document.

Pursuant to the board resolutions of Telford International, Fong’s Logistics, Wing Tai and Telford Industries dated December 1, 2020, each of the foregoing Hong Kong companies have changed their financial year end from March 31 to December 31 in order to make them coterminous with that of our PRC subsidiaries and other Hong Kong subsidiaries of our Group, as well as that of our Company, thereby optimizing resources and facilitating the preparation of the combined financial statements of our Group. See ‘‘Appendix I — Accountant’s Report’’ for an illustration of the impact to the combined profit after income tax of our Group for the Track Record Period as a result of the change in financial year end of the foregoing Hong Kong companies.

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SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

The principal accounting policies applied in the preparation of the historical financial information are set out below. See Note 2 to the Accountant’s Report in Appendix I to this document a summary of our significant accounting policies. We also make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. See Note 4 to the Accountant’s Report in Appendix I to this document for our critical accounting estimates and judgements. These policies and estimates have been consistently applied to all the years presented, unless otherwise stated.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenues are recognized when goods are transferred or services are rendered to the customer.

Depending on the terms of the contract and the laws that apply to the contract, service may be provided over time or at a point in time. Service is provided over time if our performance:

. provides all of the benefits received and consumed simultaneously by the customer;

. creates and enhances an asset that the customer controls as we perform; or

. does not create an asset with an alternative use to us and we have an enforceable right to payment for performance completed to date.

When determining the transaction price to be allocated from different performance obligations, we first determine the service fees that we entitle in the contract period and adjusts the transaction price for variable considerations and significant financing component, if any. We include in the transaction price some of all of an amount of variable considerations only to the extent that it is highly probable that a significant reversal in amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

If contracts involve the provision of multiple services, the transaction price will be allocated from each performance obligation based on the stand-alone selling prices.

(a) Sales of goods

We purchase and sells a range of alcoholic and non-alcoholic beverages. Revenue is recognized when control of the products has transferred, being when the products are delivered to distributors/ customers. Delivery occurs when the products have been delivered to the specific location, the risks of obsolescence and loss have been transferred to the distributors/customers, and either the distributors/ customers have accepted the products in accordance with the sales contract, or we have objective evidence that all criteria for acceptance have been satisfied.

The beverages are often sold with retrospective volume discounts based on certain periodic sales targets. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. Accumulated experience is used to estimate and provide for the discounts,

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Trade receivable is recognised when the beverages are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

Cash or bank acceptance notes collected from certain wholesalers/customers before product delivery is recognized as contract liabilities.

(b) Interest income

Interest income is recognized on a time-proportion basis using the effective interest method.

Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of we are measured using the currency of the primary economic environment in which the entity operates (the ‘‘functional currency’’). The financial statements are presented in HKD, which is our functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss.

All other foreign exchange gains and losses are presented in profit or loss on a net basis within ‘‘Other gains/(losses), net.’’

The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

. assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

. income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and

. all resulting exchange differences are recognized in other comprehensive income.

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On combination, exchange differences arising fromthetranslationofanynetinvestmentinforeign entities are recognized in other comprehensive income.

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average method. The cost of finished goods comprises purchase cost of goods for resale, duties, and freight costs. It excludes borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

Trade and other receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade and other receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.

Trade and other payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade and other payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

Provisions

Provisions are recognized when we have a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognized for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as an interest expense.

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Leases

Leases are recognized as right-of-use assets and the corresponding liabilities at the date of which the respective leased asset is available for use by us.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

. fixed payments (including in-substance fixed payments), less any lease incentives receivables;

. variable lease payment that are based on an index or a rate, initially measured using the index or rate as of the commencement date;

. amounts expected to be payable by us under residual value guarantees;

. the exercise price of a purchase option if we are reasonably certain to exercise that option;

. payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined, or our incremental borrowing rate.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

. the amount of the initial measurement of lease liability;

. any lease payments made at or before the commencement date less any lease incentives received;

. any initial direct costs; and

. restoration costs.

Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of twelve months or less.

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Dividend distributions

Dividend distribution to our shareholders is recognised as a liability in our financial statements in the period in which the dividends are approved by our shareholders or directors, as appropriate. Dividend income is recognised when the right to receive payment is established.

COMBINED STATEMENTS OF COMPREHENSIVE INCOME

The table below summarizes our combined statements of comprehensive income and as percentages of our total revenue for the periods indicated:

Year Ended December 31, 2018 2019 2020 % of total % of total % of total Amount revenue Amount revenue Amount revenue (HK$ in millions except for percentages)

Revenue...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0 Costofsales...... (897.1) (66.2) (1,207.0) (65.6) (1,239.5) (66.8)

Gross profit ...... 458.4 33.8 631.8 34.4 618.1 33.2

Otherincome...... 10.7 0.8 9.6 0.5 23.7 1.3 Other gains/(losses), net . . . 4.7 0.3 (4.0) (0.2) 4.6 0.2 Provision for impairment of receivables ...... (0.8) 0.0 (0.2) (0.0) (2.2) (0.1) Selling and distribution expenses...... (228.7) (16.9) (240.1) (13.1) (256.2) (13.8) Administrative expenses . . . (87.4) (6.4) (99.8) (5.4) (104.2) (5.6)

Operating profit ...... 156.9 11.6 297.3 16.2 283.8 15.2

Financeincome...... 2.3 0.2 3.6 0.2 4.7 0.3 Financecosts...... (0.8) (0.1) (1.9) (0.1) (1.5) (0.1)

Financeincome,net...... 1.5 0.1 1.7 0.1 3.2 0.2 Shareofprofitofan associate...... 0.4 0.0 0.4 0.0 0.5 0.0

Profit before income tax .. 158.8 11.7 299.4 16.3 287.5 15.4

Incometaxexpense...... (29.0) (2.1) (62.7) (3.4) (61.0) (3.3)

Profit for the year ...... 129.8 9.6 236.7 12.9 226.5 12.2

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DESCRIPTION OF MAJOR COMPONENTS OF OUR RESULTS OF OPERATIONS

Revenue

The table below sets forth a breakdown of our revenue by nature of products and as percentages of our total revenues for the periods indicated:

Year Ended December 31, 2018 2019 2020 % of total %oftotal % of total Amount revenue Amount revenue Amount revenue (HK$ in millions except for percentages)

Total ...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0

(1) During the Track Record Period, products under ‘‘Others’’ category included primarily beers, sakes, other soft beverages, postmix, packaged food and snacks.

During the Track Record Period, our revenue was primarily derived from the sales of beverage products, particularly our two major categories of natural, healthy and functional beverages, and international spirits and wines. To a lesser extent, we generate revenue from sales of our other products, which covers a wide range of products, ranging from beers, sakes, other soft beverages to postmix, packaged food and snacks.

During the Track Record Period, sales from our international spirits and wines increased from HK$669.1 million in 2018 to HK$1,121.7 million in 2019 and further to HK$1,216.7 million in 2020, accounting for 49.4%, 61.0% and 65.5% of our total revenue for the same year, respectively.

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The table below sets forth revenue breakdown by principal operation and nature of products for the periods indicated:

Year Ended December 31, 2018 2019 2020 % of total % of total % of total Amount revenue Amount revenue Amount revenue (HK$ in millions except for percentages)

Hong Kong ...... 958.7 70.7 982.4 53.4 873.3 47.0 Natural, healthy and functional beverages . . . 405.9 29.9 436.8 23.8 407.2 21.9 International spirits and wines...... 319.0 23.5 317.0 17.2 271.9 14.6 Others...... 233.8 17.2 228.6 12.4 194.2 10.5

China ...... 396.7 29.3 856.4 46.6 984.3 53.0 Natural, healthy and functional beverages . . . 43.2 3.2 43.3 2.4 31.4 1.7 International spirits and wines...... 350.1 25.8 804.7 43.8 944.9 50.9 Others...... 3.5 0.3 8.4 0.5 8.0 0.4

Total ...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0

We started our business in Hong Kong and generated a substantial portion of our revenue in Hong Kong in the past. Since 2001, we expanded our business to the PRC market, and have gained rapid growth in China during the Track Record Period despite the impact of COVID-19 in 2020.

China has been a focus in our business development. Sales from the PRC market increased from HK$396.7 million in 2018 to HK$856.4 million in 2019 and further to HK$984.3 million in 2020, accounting for 29.3%, 46.6% and 53.0% of our total revenue for the same year, respectively. Particularly, sales of international spirits and wines increased from HK$669.1 million in 2018 to HK$1,121.7 million in 2019 and further to HK$1,216.7 million in 2020, reflecting our business development focus on this business segment in China and the success of our sales and marketing strategies applied during the Track Record Period.

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The table sets forth revenue breakdown by brand categorization for the periods indicated: Year Ended December 31, 2018 2019 2020 % of total %oftotal % of total Amount revenue Amount revenue Amount revenue (HK$ in millions except for percentages)

In-house Brand Products ..... 335.7 24.8 343.1 18.7 307.3 16.5 Third-party Brand Products(1) . . 1,019.8 75.2 1,495.7 81.3 1,550.3 83.5

Total ...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0

Note:

(1) during the Track Record Period, approximately HK$59.6 million, HK$62.2 million and HK$63.5 million was generatedbyWingTai.See‘‘Business — Brands and Products — By Brand.’’

Our revenue represents income from the sale of the In-house Brand Products and Third-party Brand Products. Our revenue is generally affected by fluctuations in sales volume of our existing products, the introduction of new products and changes in average selling prices of our products.

In 2020, our sales of In-house Brand Products decreased compared to that in 2019, primarily affected by the COVID-19.

The table below sets forth revenue breakdown by sales channel for the periods indicated: Year Ended December 31, 2018 2019 2020 % of total % of total % of total Amount revenue Amount revenue Amount revenue (HK$ in millions except for percentages)

Offline...... 1,277.8 94.3 1,721.5 93.6 1,734.7 93.4 Wholesalers...... 257.0 19.0 651.7 35.4 818.0 44.0 Directsales...... 1,020.8 75.3 1,069.8 58.2 916.7 49.3 HongKong...... 946.3 69.8 969.4 52.7 849.6 45.7 China(1) ...... 74.5 5.5 100.4 5.5 67.1 3.6 Online ...... 77.7 5.7 117.4 6.4 122.9 6.6

Total ...... 1,355.5 100.0 1,838.8 100.0 1,857.6 100.0

Note:

(1) These direct sales include sales to key accounts in China and other individual customers who are Independent Third Parties.

Capitalizing on our strong sales and distribution capabilities, especially our direct selling to our on-trade customers, off-trade customers and online channels, we were able to generate revenue from our omni-channel sales network.

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We have been increasing our efforts on developing our online sales channel. In addition, as online apps and payment methods generally are gaining more popularity in Hong Kong and China, contribution from our online sales in terms of total revenue has grown from 5.7% in 2018 to 6.4% in 2019 and further to 6.6% in 2020. We have an extensive wholesalers system in China which evolved over time during the Track Record Period. During the Track Record Period, sales from our wholesalers channel increased from HK$257.0 million in 2018 to HK$651.7 million in 2019 and further to HK$818.0 in 2020, accounting for 19.0%, 35.4% and 44.0% of our total revenue for the same year, respectively.

Cost of Sales

Cost of goods sold is the largest component of our cost of sales. It represents primarily our costs to purchase Third-party Brand Products from our brand partners, production costs in relation to the In- house Brand Products paid to our production partners and costs to purchase the raw materials. The cost of goods sold in the aggregate accounted for 97.9%, 98.6% and 98.5% of the cost of sales in 2018, 2019 and 2020.

The table below sets forth a breakdown of the components of our cost of sales by nature and as percentages of our total cost of sales for the periods indicated:

Year Ended December 31, 2018 2019 2020 %ofcost %ofcost %ofcost Amount of sales Amount of sales Amount of sales (HK$ in millions except for percentages)

Cost of goods sold ...... 878.8 97.9 1,189.6 98.6 1,221.0 98.5 Directoverhead...... 13.2 1.5 13.5 1.1 13.8 1.1 Directlabor...... 3.3 0.4 3.3 0.3 3.3 0.3 Inventory provision and write-off...... 1.8 0.2 0.6 0.0 1.4 0.2

Total ...... 897.1 100.0 1,207.0 100.0 1,239.5 100.0

Gross Profit and Gross Profit Margin

Our gross profit margin for a particular period represents the amount of gross profit divided by the amount of our total revenue during the period. Our gross profit margins in 2018, 2019 and 2020 remained stable at 34.4%, 34.5% and 33.2%, respectively. Our gross profit margins are affected by the change in the level of cost of sales in relation to the revenue we generate during the same period.

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The table below sets forth our gross profit and gross profit margin by nature of products for the periods indicated:

Year Ended December 31, 2018 2019 2020 Gross Gross Gross Gross Profit Gross Profit Gross Profit Profit Margin Profit Margin Profit Margin (HK$ in millions except for percentages)

Natural, healthy and functional beverages . . . . 172.4 38.4% 191.5 39.9% 177.7 40.5% International spirits and wines 204.2 30.5 356.2 31.8 377.9 31.1 Others...... 81.7 34.5 84.1 35.5 62.5 30.9

Total...... 458.3 33.8% 631.8 34.4% 618.1 33.3%

The gross profit margins for our In-house Brand Products are generally higher than those for our Third-party Brand Products. As such, we expect to continue to focus on increasing the percentage, in terms of revenue, of our In-house Brand Products in our product portfolio through various methods, including establishing a new production facility for In-house Brand spirits. At the same time, we expect to continue to adjust the product mix in the portfolio of our Third-party Brand Products to increase the proportion of existing and new Third-party Brand Products that yield higher gross profit margins or enhance the profile of our overall product portfolio, as we are committed to developing our international spirits and wines business in the PRC market.

The table below sets forth our gross profit and gross profit margin by brand categorization for the periods indicated:

Year Ended December 31, 2018 2019 2020 Gross Gross Gross Gross Profit Gross Profit Gross Profit Profit Margin Profit Margin Profit Margin (HK$ in millions except for percentages)

In-house Brand Products . . . 151.3 45.1% 164.1 47.8% 149.6 48.7% Third-party Brand Products . 307.0 30.1 467.7 31.3 468.5 30.2

Total...... 458.3 33.8% 631.8 34.4% 618.1 33.2%

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The table below sets forth our gross profit and gross profit margin by place of principal operation for the periods indicated:

Year Ended December 31, 2018 2019 2020 Gross Gross Gross Gross Profit Gross Profit Gross Profit Profit Margin Profit Margin Profit Margin (HK$ in millions except for percentages)

Hong Kong ...... 316.0 33.0% 335.2 34.1% 288.2 33.0% China ...... 142.4 35.9% 296.6 34.6% 330.0 33.5%

Other Income

Our other income primarily consists of (i) government grants related to a one-off employee support scheme provided by the government of Hong Kong in 2020 in response to COVID-19, (ii) government subsidies related to the subsidies from the PRC governmental authorities for tax refunds, which are assessed each year and considered non-recurring, (iii) compensation income related to the compensation provided by our machine vendors for the non-satisfactory performance of certain equipment at our production facilities, which is one-off and on a non-recurring basis, (iv) electricity income related to sales of electricity generated by our solar energy equipment installed at our production facilities, which westartedtogenerateonarecurringbasissince2020,(v) others which primarily include transportation services income.

Other income amounted to HK$10.7 million, HK$9.7 million and HK$23.7 million in 2018, 2019 and 2020, respectively, which accounted for 0.8%, 0.5% and 1.3% of our total revenue, respectively.

The table below sets forth a breakdown of our other income for the periods indicated:

Year ended December 31, 2018 2019 2020 (HK$ in millions)

Governmentgrant...... ——15.0 Governmentsubsidies...... 1.8 3.0 6.6 Compensationincome...... 7.4 5.7 — Electricityincome...... ——1.1 Others...... 1.5 1.0 1.0

Total...... 10.7 9.7 23.7

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Other Gains/(Losses), Net

Our other gains/(losses) primarily consists of (i) exchange gains due to the RMB appreciation, (ii) losses on disposal of property, plant and equipment related to the disposal of obsolete server as part of our IT infrastructure upgrade; (iii) others related to forfeited product deposits from customers and loss on early termination of rental agreement.

We recorded other gains of HK$4.7 million and HK$4.6 million in 2018 and 2020, which accounted for 0.3% and 0.2%, respectively, of our total revenue for the same periods. In 2019, we recorded other losses of HK$4.0 million primarily due to exchange rate losses in that year.

The table below sets forth a breakdown of our other gains and losses for the periods indicated:

Year ended December 31, 2018 2019 2020 (HK$ in millions)

Exchangegains/(losses)...... 4.9 (3.6) 5.4 Losses on disposal of property, plant and equipment (0.2) 0.0 (0.9) Others...... — (0.4) 0.1

Total...... 4.7 (4.0) 4.6

Provision for Impairment of Receivables

We normally provide our retailers with a credit term of 30 to 90 days subject to the creditworthiness of the relevant retailers according to our customer credit management system. For wholesalers, we generally require them to pay in full before product delivery. We apply HKFRS 9 simplified approach in measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables.

In 2018, 2019 and 2020, we made provision for impairment of receivables amounting to HK$0.8 million, HK$0.2 million and HK$2.2 million, respectively.

Selling and Distribution Expenses

Our selling and distribution expenses primarily consists of (i) employee benefit expenses related to our sales staffs, (ii) advertising expenses used for our product promotion and marketing, (iii) freight, delivery and warehouse expenses related to the logistics of our products, (iv) public relations allowance related to the sales of our products, (v) depreciation related to our fleet of transportation vehicles, and (vi) others related to primarily expenses for export sales, PRC subsidiaries taxes and surcharges.

Our selling and distribution expenses amounted to HK$228.7 million, HK$240.1 million and HK$256.2 million in 2018, 2019 and 2020, respectively, which accounted for 16.9%, 13.1% and 13.8% of our total revenue, respectively.

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The table below sets forth a breakdown of our selling and distribution expenses for the periods indicated:

Year ended December 31, 2018 2019 2020 (HK$ in millions)

Employeebenefitexpenses...... 83.6 91.9 94.5 Advertisingexpenses...... 72.5 67.3 69.3 Freight,deliveryandwarehouse...... 46.6 57.4 61.0 Publicrelationsallowance...... 6.5 7.5 9.2 Depreciation...... 1.9 2.0 2.1 Others...... 17.6 14.0 20.1

Total...... 228.7 240.1 256.2

Administrative Expenses

Our administrative expenses primary consists of (i) employee benefit expenses related to our administrative staffs, (ii) depreciation related to the lease of our office premises, (iii) directors’ remuneration insurance, (iv) travelling expenses, (v) insurance, (vi) legal and professional fee for our usual course of business, and (v) others related to primarily donations, general office expenses and property management fee.

Our administrative expenses were HK$87.4 million, HK$99.8 million, HK$104.1 million in 2018, 2019 and 2020, respectively, which accounted for 6.5%, 5.4% and 5.6% of our total revenue, respectively.

The table below sets forth a breakdown of our administrative expenses for the periods indicated:

Year ended December 31, 2018 2019 2020 (HK$ in millions)

Employeebenefitexpenses...... 45.8 47.5 52.0 Depreciation...... 13.4 21.0 22.5 Director’sremuneration...... 8.6 9.1 9.3 Travellingexpenses...... 7.7 8.6 6.2 Insurance...... 2.9 3.0 2.9 Legalandprofessionalfee...... 2.7 3.2 2.3 Others...... 6.3 7.4 9.0

Total...... 87.4 99.8 104.2

Finance income

Our finance income represents interest income from short term bank deposits.

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Our finance income amounted to HK$2.3 million, HK$3.6 million and HK$4.7 million in 2018, 2019 and 2020, respectively, which accounted for 0.2%, 0.2% and 0.3% of our total revenue, respectively.

Finance costs

Our finance costs represent interest expenses on bank borrowings and interest elements on lease liabilities.

Our finance costs amounted to HK$0.8 million, HK$1.9 million and HK$1.5 million in 2018, 2019 and 2020, respectively, which accounted for 0.1%, 0.1% and 0.1% of our total revenue, respectively.

The table below sets forth a breakdown of our finance costs for the periods indicated:

Year ended December 31, 2018 2019 2020 (HK$ in millions)

Interest expenses on bank borrowings ...... 0.3 0.6 0.2 Interestelementsonleaseliabilities...... 0.5 1.3 1.3

Total...... 0.8 1.9 1.5

Shareofprofitofanassociate

Share of profit of an associate represents our share of profits resulting from investments in a company incorporated and operating in Macau, in which our Company holds 25% interest.

Our share of profit of an associate amounted to HK$0.4 million, HK$0.4 million and HK$0.5 million in 2018, 2019 and 2020, respectively, which accounted for 0.03%, 0.02% and 0.03% of our total revenue, respectively.

Income tax expense

Our subsidiaries in China are subject to Enterprise Income Tax (‘‘EIT’’) on the taxable income as reported in their respective statutory financial statements adjusted in accordance with the EIT Law. Pursuant to the EIT Law, our subsidiaries in China are generally subject to EIT at the statutory rate of 25%.

In 2018, our subsidiaries in Hong Kong were subject to a tax rate of 16.5%. In 2019 and 2020, Hong Kong profits tax has been provided for at a two-tiered rate of 8.25% for the first HK$2 million of the estimated assessable profit for one of our Hong Kong subsidiaries and 16.5% on the remaining estimated assessable profit.

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The table below sets forth a breakdown of our income tax expenses for the periods indicated:

Year ended December 31, 2018 2019 2020 (HK$ in millions)

Current income tax: HongKongprofitstax...... 16.7 20.9 16.5 PRCcorporateincometax...... 14.0 40.5 50.5 Overprovisioninprioryears...... (0.1) (0.1) (0.6) Deferred income tax (credited)/charged ...... (1.6) 1.4 (5.4)

Total...... 29.0 62.7 61.0

In 2018, 2019 and 2020, our effective tax rates were 18.3%, 20.9 and 21.2%, respectively.

Profit for the Year

As a result of the foregoing, our profit for the year increased by 82.6% from HK$129.7 million in 2018 to HK$236.8 million in 2019, and decreased by 4.3% to HK$226.6 million in 2020.

YEAR TO YEAR COMPARISON OF RESULTS OF OPERATIONS

Year ended December 31, 2020 compared to year ended December 31, 2019

Revenue

Our revenue slightly increased by 1.0% from HK$1,838.8 million in 2019 to HK$1,857.6 million in 2020, primarily due to our sales increase in China for international spirits and wines.

. Natural, healthy and functional beverages: revenue for natural, healthy and functional beverages decreased by 8.6% from HK$480.1 million in 2019 to HK$438.7 million in 2020, primarily due to a decrease in sales as our on-trade customers, such as restaurants and bars, were affected by the COVID-19 outbreak and the restrictive measures implemented by the governments in order to halt the outbreak, particularly in Hong Kong.

. International spirits and wines: revenue from international spirits and wines remained relatively stable at HK$1,121.7 million in 2019 and HK$1,216.7 million in 2020. While the sales of international spirits and wines in Hong Kong were adversely affected by the COVID- 19 outbreak, our sales of international spirits and wines in China experienced growth as the COVID-19 pandemic was brought under control in China. We have expanded our product portfolio of international spirits and wines offered in China to facilitate our development strategy in the PRC market and replicate our successful experience in the Hong Kong market. Particularly, with our continuous sales and marketing efforts and promotions, sales of Jägermeister and Dalmore continued to grow in China in 2020. We intend to further focus and develop our international spirits and wines business in China to capture the momentum.

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. Others: revenue from other products decreased by 14.7% from HK$237.0 million in 2019 to HK$202.2 million in 2020, primarily due to the negative impact from the COVID-19 outbreak and the restrictive measures implemented by the governments in order to halt the outbreak, particularly in Hong Kong. Particularly, as the business of our on-trade customers were affected, the sales of postmix which are generally available in fast food chain restaurants and convenience stores experienced a sharper decrease in sales in 2020 due to the temporary closure of restaurants and stores, and social distancing restrictions.

Cost of Sales

Our cost of sales increased by 2.7% from HK$1,207.0 million in 2019 to HK$1,239.5 million in 2020, which is generally in line with our revenue growth for the same period.

Gross Profit and Gross Profit Margin

Our gross profits decreased by 2.2% from HK$631.8 million in 2019 to HK$618.1 million in 2020. Our gross profit margin decreased from 34.4% in 2019 to 33.3% in 2020, primarily due to decreases in the gross profit margin across all of our product segments except for the natural, healthy and functional beverages.

. Natural, healthy and functional beverages: gross profits for natural, healthy and functional beverages decreased by 7.2% from HK$191.5 million in 2019 to HK$177.7 million in 2020, primarily due to the decrease in sales generally affected by the COVID-19 outbreak. Gross profit margin for natural, healthy and functional beverages remained relatively stable from 39.9% to 40.5%.

. International spirits and wines: gross profits for international spirits and wines increased by 6.1% from HK$356.2 million in 2019 to HK$377.9 million in 2020, primarily due to our growing business footprint in China in sales of international spirits and wines. However, gross profit margins for international spirits and wines decreased from 31.8% in 2019 to 31.1% in 2020, primarily affected by product mix.

. Others: gross profits for other products decreased by 25.6% from HK$84.1 million in 2019 to HK$62.5 million in 2020, which was affected by the combination of decreases in sales and the gross profit margin of other products for the same period. Gross profit margin for other products decreased from 35.5% in 2019 to 30.9% in 2020, primarily due to an increase in sales of snacks which gained popularity as more people stayed home in light of the COVID- 19 outbreak. However, such products generally have lower gross profit margins compared to other products in this category. In addition, there was a concurrent decrease in sales of alcoholic beverages in this category which generally have higher gross profit margins.

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Other Income

Other income increased by 146.0% from HK$9.6 million in 2019 to HK$23.7 million in 2020, primarily due to (i) one-off subsidies of HK$15.0 million received from the Employment Support Scheme in Hong Kong as employee wage subsidies, and (ii) an increase of HK$3.6 million from government subsidies in China, in recognition of our considerable tax contribution in China, which is considered non-recurring basis.

Other Gains/(Losses), Net

We recorded other losses of HK$4.0 million in 2019 and other gains of HK$4.6 million in 2020, primarily due to the effects of fluctuations in the RMB exchange rate. In 2019, we recorded an exchange loss of HK$3.6 million while in 2020, we recorded an exchange gain of HK$5.4 million.

Selling and Distribution Expenses

Our selling and distribution expenses increased by 6.7% from HK$240.1 million in 2019 to HK$256.2 million in 2020, primarily due to increases across all components of our selling and distribution expenses to stimulate the sales, especially with our online marketing efforts, to offset negative impact from the COVID-19 outbreak, including primarily (i) an increase of HK$2.6 million in employee benefit expenses of our sales staffs, which was generally in line with our increased sales of international spirits and wines in China, (ii) an increase of HK$2.0 million in advertising expenses to engage more online advertising activities to promote our product sales, and (iii) an increase of HK$1.7 million in freight, delivery and warehouse due to our expanded footprint in China for our international spirits and wines business and increased transportation fees because of traffic control in response to the COVID-19 outbreak.

Administrative Expenses

Our administrative expenses increased by 4.3% from HK$99.8 million in 2019 to HK$104.2 million in 2020, primarily due to (i) an increase of HK$4.5 million in employee benefit expenses for administrative staffs which was generally in line with our expansion in China, and (ii) an increase of HK$1.5millionindepreciationfortheright-of-useassetsinconnectionwithofficelease,asaresultof the relocation of our offices in Shanghai.

Finance Income

Our finance income increased by 30.2% from HK$3.6 million in 2019 to HK$4.7 million in 2020, primarily due to an increase in our short term bank deposits throughout the year. We generally deposit our cash at commercial banks for stable returns as part of our prudent cash management policy.

Finance Costs

Our finance costs decreased by 19.5% from HK$1.9 million in 2019 to HK$1.5 million in 2020, primarily due to a decrease of HK$0.4 million in the interest expense on bank borrowings, as we have fully repaid some short term loans in 2020.

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ShareofProfitofanAssociate

Our share of profit of an associate remained relatively stable at HK$0.4 million and HK$0.5 million in 2019 and 2020, respectively, primarily because the business of our associate in Macau was less affected by the adverse impact from the COVID-19 outbreak.

Income Tax Expense

Our income tax expense slightly decreased by 2.7% from HK$62.7 million in 2019 to HK$61.0 million in 2020, primarily due to an decrease in the profit before income tax of the year. Our effective tax rate increased from 20.9% in 2019 to 21.2% in 2020 primarily because of the increased portion of our taxable income in China, which is subject to a higher income tax rate compared to Hong Kong.

Profit for the Year

As a result of the above, our profit for the year decreased slightly by 4.3% from HK$236.8 million in 2019 to HK$226.6 million in 2020.

Year ended December 31, 2019 compared to year ended December 31, 2018

Revenue

Our revenue increased by 35.7% from HK$1,355.5 million in 2018 to HK$1,838.8 million in 2019, primarily due to our business expansion in China.

. Natural, healthy and functional beverages: Revenue for natural, healthy and functional beverages increased by 6.9% from HK$449.1 million in 2018 to HK$480.1 million in 2019, primarily due to increases in sales of our Tao Ti products and oat milk products. We launched some new products in our Tao Ti series in 2019, which was well received and resulted in an increase in the overall sales of Tao Ti products. Furthermore, we brought in an oat milk brand to the Hong Kong market in 2018. With our strength in promoting and selling natural, healthy and functional beverages, and the increasing demand for healthier beverages and dairy-free options, our oat milk products achieved significant sales growth in 2019.

. International spirits and wines: Revenue from international spirits and wines increased by 67.6% from HK$669.1 million in 2018 to HK$1,121.7 million in 2019, primarily due to significant increases in sales of Jägermeister, Dalmore and Matsui in China. In 2019, we were focused on developing our international spirits and wines business in China, by introducing more brands to China, adopting differentiated marketing activities through various channels and solidifying our wholesaler structure to ensure market penetration in various areas in China.

. Others: Revenue from other products remained relatively stable at HK$237.3 million and HK$237.0 million in 2018 and 2019, respectively. We maintained a variety of products under our other product category, ranging from beer and sake to postmix and packaged food and snacks. Our large product portfolio, suitable for customers with different demands and preferences, which we believe has enabled us to maintain steady sales and explore cross- selling opportunities.

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Cost of Sales

Our cost of sales increased by 34.5% from HK$897.1 million in 2018 to HK$1,207.0 million in 2019, which was generally in line with our revenue increase for the same period.

Gross Profit and Gross Profit Margin

Our gross profits increased by 37.9% from HK$458.3 million in 2018 to HK$631.8 million in 2019. Our gross profit margin remained relatively stable at 33.8% and 34.4% in 2018 and 2019, respectively.

. Natural, healthy and functional beverages: gross profits for natural, healthy and functional beverages increased by 11.1% from HK$172.4 million in 2018 to HK$191.5 million in 2019, primarily due to the increase in sales from our natural, healthy and functional beverages segment. Gross profit margin for natural, healthy and functional beverages remained relatively stable from 38.4% in 2018 to 39.9% in 2019.

. International spirits and wines: gross profits for international spirits and wines increased significantly from HK$204.2 million in 2018 to HK$356.2 million in 2019, primarily due to the increase in sales from the international spirits and wines segment. Gross profit margins for international spirits and wines remained relatively stable from 30.5% in 2018 to 81.7% in 2019.

. Others: gross profits for other products remained relatively stable at HK$81.7 million and HK$84.1 million in 2018 and 2019, respectively, which was generally in line with its sales for the same periods. Gross profit margin for other products remained relatively stable from 34.5% in 2018 to 35.5% in 2019.

Other Income

Other income decreased by 10.2% from HK$10.7 million in 2018 to HK$9.6 million in 2019, primarily due to a decrease of HK$1.7 million in the compensations paid by our machine vendors for poor performance of equipment, which was one-off.

Other Gains/(Losses), Net

We recorded other gains of HK$4.7 million in 2018 and other losses of HK$4.0 million in 2019, primarily due to the effects of fluctuations in the RMB exchange rate. In 2018, we recorded an exchange gain of HK$4.9 million while in 2019, we recorded an exchange loss of HK$3.6 million.

Selling and Distribution Expenses

Our selling and distribution expenses increased by 5.0% from HK$228.7 million in 2018 to HK$240.1 million in 2019, primarily due to (i) an increase of HK$8.3 million in employee benefit expenses of our sales staffs, which was generally in line with our increased sales of international spirits and wines in China for the same period, and (ii) an increase of HK$10.8 million in freight, delivery and

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Administrative Expenses

Our administrative expenses increased by 14.2% from HK$87.4 million in 2018 to HK$99.8 million in 2019, primarily due to an increase of HK$7.6 million in depreciation for the right-of-use assets in connection with our office lease as a result of relocation of our offices in Shenzhen.

Finance Income

Our finance income increased by 60.1% from HK$2.3 million in 2018 to HK$3.6 million in 2019, primarily due to an increase in our short term bank deposits throughout the year.

Finance Costs

Our finance costs increased by 124.7% from HK$0.8 million in 2018 to HK$1.9 million in 2019, primarily due to an increase of HK$0.8 million in the interest elements on lease liabilities as a result of some new leases of office premises and warehouses entered into in 2019 to support our overall business growth.

ShareofProfitofanAssociate

Our share of profit of an associate remained stable at HK$0.4 million in 2018 and 2019, respectively, as the performance of our associate company in Macau was stable and consistent.

Income Tax Expense

Our income tax expense increased by 116.3% from HK$29.0 million in 2018 to HK$62.7 million in 2019, primarily due to an increase in the profit before income tax of the year. Our effective tax rate increased from 18.3% in 2018 to 20.9% in 2019 primarily because we have utilized more tax losses to offset the taxable profit in 2018.

Profit for the Year

As a result of the above, our profit for the year increased by 82.6% from HK$129.7 million in 2018 to HK$236.8 million in 2019.

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DISCUSSION OF CERTAIN KEY BALANCE SHEET ITEMS

Net Current Assets/(Liabilities)

The following table sets forth the breakdown of our current assets and current liabilities as of the dates indicated.

As of As of December 31, April 30, 2018 2019 2020 2021 (HK$ in millions)

ASSETS Current assets Inventories...... 287.5 374.0 454.6 473.6 Trade and other receivables ...... 268.2 326.7 253.3 284.2 Amount due from the ultimate holding company...... 66.4 72.9 —— Amounts due from fellow subsidiaries. . . 12.5 12.6 12.9 6.1 Amountsduefromdirectors...... — 16.0 51.3 — Amount due from an associate ...... 4.8 4.3 3.8 — Amount due from a related company. . . . — 0.1 0.1 — Taxrecoverable...... ———22.8 Financial assets at fair value through profitorloss...... — 11.1 59.4 — Short-term bank deposits ...... 127.9 184.6 221.2 167.6 Cash and cash equivalents ...... 125.6 164.4 302.5 338.4

Total current assets ...... 892.9 1,166.7 1,359.1 1,292.7

Current liabilities Bankborrowings...... 5.1 8.9 —— Leaseliabilities...... 12.8 13.2 14.8 15.9 Trade and other payables ...... 192.3 235.5 316.4 280.0 Amount due to the ultimate holding company...... ——126.0 3.6 Amount due to a fellow subsidiary . . . . . 0.0 ——1.7 Amounts due to a director ...... 35.5 31.9 26.9 22.6 Amount due to a related company...... 1.0 1.0 —— Contractliabilities...... 2.9 4.4 2.1 — Current income tax liabilities ...... 10.8 18.8 17.4 —

Total current liabilities ...... 260.4 313.7 503.6 323.8

Net current assets ...... 632.5 853.0 855.5 968.9

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We recorded net current assets of HK$968.9 million as of April 30, 2021 compared to our net current assets of HK$855.5 million as of December 31, 2020. The increase was primarily due to (i) an increase in cash and cash equivalents of HK$35.9 million, (ii) an increase in tax recoverable of HK$22.8 million, (ii) an increase in trade and other receivables of HK$19.7 million, and (iii) an increase in inventories of HK$19.0 million due to our advanced stock up for potential delays in deliveries due to COVID-19, which was partially offset by (i) a decrease in financial assets at fair value through profit or loss of HK$59.4 million, representing the structured deposits; (ii) a decrease in short-term bank deposits of HK$53.6 million; and (iii) a decrease in amounts due from directors of HK$51.3 million as a result of the repayment of such amount.

Our net current assets remained relatively stable from HK$853.0 million as of December 31, 2019 to HK$855.5 million as of December 31, 2020, primarily due to (i) an increase of HK$126.0 million in amount due to the ultimate holding company representing the dividends declared by the companies now comprising our Group that remained unsettled as of the same date; (ii) a decrease of HK$73.4 million in trade and other receivables primarily as a result of the increased portion of sales in China, where our customers (i.e. the wholesalers) are generally required to pay in full before product delivery; (iii) a decrease of HK$72.9 million in amount due from the ultimate holding company as a result of the repayment of such amount by the end of 2020; and (iv) an increase of HK$81.0 million in trade and other payables, which were generally in line with the increase in our inventories at the end of the year, which was offset by (i) an increase of HK$138.1 million in cash and cash equivalents at the end of 2020; and (ii) an increase of HK$80.6 million in inventories due to our advanced stock up for additional Australian wines and potential delay in deliveries due to COVID-19.

Our net current assets increased by 34.9% from HK$632.4 million as of December 31, 2018 to HK$853.0 million as of December 31, 2019, primarily due to (i) an increase of HK$86.4 million in inventories due to our advanced stock up for expanded business in China; (ii) an increase of HK$58.6 million in trade and other receivables due to the increase in sales in both Hong Kong and China; and (iii) an increase of HK$56.7 million in short-term bank deposits at the end of 2019, which was partially offset by an increase of HK$43.2 million in trade and other payables, which were generally in line with the increase in our inventories at the end of the year.

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DESCRIPTION OF CERTAIN ITEMS OF STATEMENT OF FINANCIAL POSITION

Inventories

Our inventories include raw materials and finished goods, with finished goods being the major component. Finished goods represents the Third-party Brand Products procured from our brand partners and the In-house Brand Products that we order from our production partners. Raw materials mainly include beverage concentrate used in our production of postmix. As of December 31, 2018, 2019 and 2020, the percentage of finished goods to inventories was 98.8%, 98.8% and 99.1%, respectively.

The table below sets forth a breakdown of our inventory balances as of the dates indicated.

As of December 31, 2018 2019 2020 (HK$ in millions)

Rawmaterials...... 3.5 4.4 4.1 Goods in transit ...... 55.1 69.0 75.9 Finished goods ...... 228.9 300.6 374.6

Total...... 287.5 374.0 454.6

Inventories increased by 21.6% from HK$374.0 million as of December 31, 2019 to HK$454.6 million as of December 31, 2020, primarily due to our advanced stock up of additional Australian wines and in anticipation of potential delay in deliveries due to COVID-19. In response to the trade tension between China and Australian in 2020 and 2021, which has effectively ground to a halt the importation of Australian wines to China, we stocked up our Australian wines in advance. As of December 31, 2020, our inventory of Australia wines in China amounted to approximately HK$81.2 million (calculated at an exchange rate of RMB1.00 to HK$1.1876 as of December 31, 2020).

Inventories increased by 30.1% from HK$287.5 million as of December 31, 2018 to HK$374.0 million as of December 31, 2019, primarily due to our advanced stock up for expanded business in China.

The table below sets forth our inventory turnover days during the periods indicated.

As of December 31, 2018 2019 2020

Inventory turnover days(1) ...... 101 100 122

(1) Inventory turnover days for each period equals the average of the beginning and ending balances of inventory for that period divided by cost of sales for that period and multiplied by the number of days in that period.

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Our inventory turnover days increased from 100 days from 2019 to 122 days in 2020, primarily due to our increase in inventory in anticipation of (i) stock up for additional Australian wines, in response to the trade tension between China and Australia in 2020 and 2021; and (ii) impacts on logistics in light of COVID-19, where we ordered additional stock to prepare against any sales disruptions.

Our inventory turnover days stayed relatively stable at 101 and 100 days in 2018 and 2019, respectively.

As of April 30, 2021, 97.7% of our total inventories as of December 31, 2020, or HK$444.1 million, were utilized or sold.

Trade and Other Receivables

Our trade and other receivables mainly relate to amounts due from customers for products sold in the ordinary course of business. The table below sets forth a breakdown of our trade and other receivables as of the dates indicated.

As of December 31, 2018 2019 2020 (HK$ in millions)

Tradereceivables,net...... 227.8 285.3 201.5 Deposits...... 26.5 30.4 27.1 Prepayment...... 6.2 7.9 15.6 Dividendreceivablefromanassociate...... 0.3 0.3 0.4 Other receivables ...... 9.7 7.6 13.6

270.5 331.5 258.2 Less:Non-currentportion...... (2.3) (4.7) (4.9)

Total...... 268.2 326.8 253.3

We typically set forth the trading terms with our customers in the relevant sales contracts. During the Track Record Period, we believe that we have implemented effective credit management system and policies. We normally provide our retailers with a credit term of 30 to 90 days subject to the creditworthiness of the relevant retailers according to our customer credit management system. For wholesalers, we generally require them to pay in full before product delivery.

Our senior management regularly reviews the recoverability of our overdue balances and exercises strong credit control that when appropriate, provides for impairment of these trade receivables. Impairment in respect of trade receivables is recorded using an allowance account unless we are satisfied that the possibility of recovery of the amount is remote, in which case the impairment is written off against trade receivables directly. We believe that our exposure to the risks of being unable to collect payments is small.

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Our trade and other receivables increased from HK$268.2 million as of December 31, 2018 to HK$326.8 million as of December 31, 2019, primarily due to the increase in sales in both Hong Kong and China. Our trade and other receivables decreased from HK$326.8 million as of December 31, 2019 to HK$253.3 million as of December 31, 2020. The decrease was primarily due to a decrease in sales in Hong Kong and an increase in sales in China, where most wholesalers are required to pay in full before product delivery. Our provision for doubtful debts amounted to HK$1.7 million, HK$1.9 million and HK$3.4 million as of December 31, 2018, 2019 and 2020, respectively.

The table below sets forth an aging analysis of our trade receivables as of the dates indicated.

As of December 31, 2018 2019 2020 (HK$ in millions)

0–30days...... 80.0 114.6 79.2 31–60days...... 61.0 53.6 57.7 61–90days...... 45.9 62.9 38.7 Over90days...... 40.9 54.2 25.9

227.8 285.3 201.5

The table below sets forth our trade receivables turnover days during the periods indicated.

As of December 31, 2018 2019 2020

Trade receivables turnover days(1)...... 61 51 48

(1) Trade and other receivables turnover days for each period equals the average of the beginning and ending balances of trade and other receivables for that period divided by revenue for that period and multiplied by the number of days in that period.

In 2018, 2019 and 2020, our trade receivables turnover days were 61 days, 51 days and 48 days, respectively, primarily due to an increased proportion of our sales in China, where our customers (i.e. the wholesalers) are generally required to pay in full before product delivery.

As of April 30, 2021, 99.2% of our total trade receivables as of December 31, 2020, or HK$199.9 million, were settled.

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Trade Payables

Our trade payables primarily comprise payables for goods purchased in the ordinary course of business from suppliers. Our trade payables are non-interest-bearing and are generally settled within 30 to 90 days.

The table below sets forth our trade payables as of the dates indicated.

As of December 31, 2018 2019 2020 (HK$ in millions)

Tradepayables...... 102.7 147.0 187.9

Trade payables increased by 27.8% from HK$147.0 million as of December 31, 2019 to HK$187.9 million as of December 31, 2020, primarily due to an increase in our inventories in China.

Trade payables increased by 43.1% from HK$102.7 million as of December 31, 2018 to HK$147.0 million as of December 31, 2019, primarily due to an increase in our inventories in China.

The table below sets forth an aging analysis of our trade payables as of the dates indicated.

As of December 31, 2018 2019 2020 (HK$ in millions)

0to30days...... 65.3 104.4 91.9 31to60days...... 20.5 26.3 74.6 61to90days...... 6.6 14.5 14.1 Over90days...... 10.3 1.8 7.3

Total...... 102.7 147.0 187.9

The table below sets forth our trade payables turnover days during the periods indicated.

As of December 31, 2018 2019 2020

Trade payables turnover days(1) ...... 41 38 49

(1) Trade payables turnover days for each period equals the average of the beginning and ending balances of Trade payables for that period divided by cost of sales for that period and multiplied by the number of days in that period.

Our trade payables turnover days decreased slightly from 41 days in 2018 to 38 days in 2019, and increased to 49 days in 2020, primarily because we purchased more inventories of spirits and wines, especially at the end of 2020.

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As of April 30, 2021, 91.6% of our total trade payables as of December 31, 2020, or HK$172.1 million, were settled.

LIQUIDITY AND CAPITAL RESOURCES

We have historically funded our cash requirements principally from cash from our business operations. After the [REDACTED], we intend to finance our future capital requirements through cash generated from our business operations and the net [REDACTED] from the [REDACTED]. We do not anticipate any changes to the availability of financing to fund our operations in the future.

The table below sets forth a summary of our cash flows for the periods indicated.

As of December 31, 2018 2019 2020 (HK$ in millions)

Net cash generated from operating activities . . . . . 54.9 174.6 327.3 Netcashusedininvestingactivities...... (96.6) (81.4) (100.3) Net cash generated from/(used in) financing activities...... 26.9 (52.1) (103.0)

Net (decrease)/increase in cash and cash equivalents (14.8) 41.1 124.0

Cash and cash equivalents at beginning of the year. 142.6 125.6 164.4 Effect of currency translation differences on cash andcashequivalents...... (2.2) (2.2) 14.1

Cash and cash equivalents at end of the year ... 125.6 164.5 302.5

Net cash generated from Operating Activities

Net cash from operating activities represents cash generated from operations minus income tax paid and interest paid. Cash generated from operations reflects (i) profit before tax adjusted for non-cash and non-operating items, such as depreciation of property, plant and equipment and intangible assets, and depreciation of right-of-use assets; (ii) movements in working capital, such as increases or decreases in inventories, trade and other receivables and trade and other payables; and (iii) other cash items consisting of income tax paid and interest paid.

Net cash from operating activities for 2020 was HK$327.3 million, which mainly reflected our profit before income tax of HK$287.6 million, as adjusted by (i) a decrease in trade and other receivables of HK$73.5 million; (ii) an increase in inventories of HK$80.6 million; and (iii) an increase in trade and other payables of HK$80.9 million.

Net cash from operating activities for 2019 was HK$174.6 million, which mainly reflected our profit before income tax of HK$299.5 million, as adjusted by (i) an increase in inventories of HK$86.4 million; (ii) an increase in trade and other receivables of HK$58.6 million; and (iii) an increase in trade and other payables of HK$43.2 million.

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Net cash from operating activities for 2018 was HK$54.9 million, which mainly reflected our profit before income tax of HK$158.7 million, as adjusted by (i) an increase in inventories of HK$78.6 million; (ii) a decrease in trade and other receivables of HK$4.4 million; and (iii) a decrease in trade and other payables of HK$8.7 million.

NetcashusedinInvestingActivities

In 2020, we had net cash used in investing activities of HK$100.3 million, primarily due to a placement of bank deposits of HK$1,007.7 million, which was partially offset by proceeds from bank deposits matured of HK$922.8 million.

In 2019, we had net cash used in investing activities of HK$81.4 million, primarily due to a placement of bank deposits of HK$844.5 million, which was partially offset by proceeds from bank deposits matured of HK$776.7 million.

In 2018, we had net cash used in investing activities of HK$96.6 million, primarily due to a placement of bank deposits of HK$523.7 million, which was partially offset by proceeds from bank deposits matured of HK$432.0 million.

Net cash generated from/(used in) Financing Activities

In 2020, we had net cash used in financing activities of HK$103.0 million, primarily due to (i) advances to Directors of HK$76.3 million; (ii) advances to the ultimate holding company of HK$36.2 million; and (iii) payments of principal elements of the lease liabilities of HK$16.0 million.

In 2019, we had net cash used in financing activities of HK$52.2 million, primarily due to (i) advances to Directors of HK$19.6 million; (ii) payments of principal elements of the lease liabilities of HK$16.0 million; and (iii) dividend paid of HK$12.0 million.

In 2018, we had net cash generated from financing activities of HK$26.9 million, primarily due to repayment from Directors of HK$38.5 million, which was partially offset by dividend paid of HK$11.0 million and payments of principal elements of the lease liabilities of HK$10.1 million.

INDEBTEDNESS

Bank borrowings

As of December 31, 2018, 2019 and 2020, our interest-bearing borrowings amounted to HK$5.1 million, HK$8.9 million and nil, respectively.

As of April 30, 2021, being the latest practicable date for determining our indebtedness, our interest-bearing borrowings was nil. As of the same date, we had HK$137.6 million overdraft facilities, of which HK$137.6 million were unutilized and unrestricted. As a measure to manage our cash and liquidity position, the bank facilities allow us to maintain adequate sources to fund our working capital requirements or other financing needs and provide the flexibility for us to borrow additional funds on an as-needed basis.

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Lease Liabilities

Lease Liabilities are recognized at the commencement date of the lease at the present value of lease payments to be made over the term of the lease. As of December 31, 2018, 2019 and 2020, we recognized lease liabilities of HK$22.0 million, HK$33.1 million and HK$36.5 million, respectively, primarily attributable to our lease of office premises and warehouses to support our overall business growth.

Contingent Liabilities

As of December 31, 2018, 2019 and 2020, we did not have any contingent liabilities.

Indebtedness Statement

Except as disclosed above, as of April 30, 2021, being the latest practicable date for determining our indebtedness, we did not have any outstanding mortgages, charges, debentures, other issued debt capital, bank overdrafts, borrowings, liabilities under acceptance or other similar indebtedness, hire purchase commitments, guarantees or other material contingent liabilities. Our Directors have confirmed that there had been no material adverse change in our indebtedness since April 30, 2021 and up to the Latest Practicable Date.

KEY FINANCIAL RATIOS

Year Ended/As of December 31, 2018 2019 2020

Notes:

(1) Equals gross profit divided by revenue. See ‘‘Financial Information — Description of Major Components of Our Results of Operations — Gross Profit and Gross Profit Margin.’’

(2) Equals profit for the year divided by revenue.

(3) Equals profit for the year divided by the average of the beginning and ending total assets for that year and multiplied by 100%.

(4) Equals profit for the year divided by the average of the beginning and ending total equity for that year and multiplied by 100%.

(5) Equals current assets divided by current liabilities as of the same date.

(6) Equals current assets less inventories and divided by current liabilities as of the same date.

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Return on assets

Our return on assets decreased from 20.3% in 2019 to 16.1% in 2020, primarily due to (i) an increase of current assets especially the cash and bank balances; and (ii) a slight decrease of net profit under the impact of COVID-19.

Our return on assets increased from 13.5% in 2018 to 20.3% in 2019, primarily due to an increase in net profit.

Return on equity

Our return on equity decreased from 27.7% in 2019 to 23.3% in 2020, primarily due to (i) the accumulation of reserves equity from 2019 to 2020; and (ii) a slight decrease of net profit under the impact of COVID-19.

Our return on equity increased from 18.9% in 2018 to 27.7% in 2019, primarily due to an increase in net profit.

Current ratio

Our current ratio decreased from 3.7x as of December 31, 2019 to 2.7x as of December 31 2020, primarily due to (i) an increase of 34.4% in trade and other payables in 2020; (ii) a decrease of 22.5% in trade and other receivables in 2020; and (iii) an increase of 19.8% in short-term bank deposits in 2020.

Our current ratio remained relatively stable at 3.4x and 3.7x as of December 31, 2018 and 2019, respectively.

Quick ratio

Our quick ratio decreased from 2.5x as of December 31, 2019 to 1.8x as of December 31 2020, primarily due to (i) an increase of 34.4% in trade and other payables in 2020; (ii) a decrease of 22.5% in trade and other receivables in 2020; and (iii) an increase of 19.8% in short-term bank deposits in 2020.

Our current ratio remained relatively stable at 2.3x and 2.5x as of December 31, 2018 and 2019, respectively.

DISCLOSURE ABOUT FINANCIAL RISK

We are exposed to a variety of financial risks, including foreign exchange risk, credit risk and liquidity risk. Our overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on our financial performance.

Foreign Exchange Risk

We do not expect significant foreign exchange risks. We are currently adopting a natural hedging for the operation in the PRC. Our foreign currency transactions are mainly denominated in USD and RMB. We are subject to foreign exchange risk arises from future commercial transactions and recognized assets and liabilities which are denominated in a currency that is not our functional currency.

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Our management considers that foreign exchange riskwithrespecttoUSDisnotsignificantas HKD is pegged to USD. We manage our foreign currency risk by closely monitoring the movement of the foreign currency rates.

Credit Risk

Our credit risk is primarily attributable to trade and other receivables, amount due from a related company, amount due from an associate, amount due from directors, short-term deposits and cash and cash equivalents included in the statement of financial position, which represent our maximum exposure to credit risk in relation to our financial assets. Our management has a credit policy in place and the exposures to these credit risks are monitored on an ongoing basis.

We apply the simplified approach in HKFRS 9 to measure trade receivables for impairment. See Note 3 to the Appendix I of this document for details of the provision matrix for trade receivables.

Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities. We aim to maintain flexibility in funding by keeping sufficient cash.

For an analysis of relevant maturity groups of our financial liabilities based on the remaining year at the date of statement of financial position to the contractual maturity date, see Note 3 to the Accountants’ report set out in Appendix 1 to this document.

OFF-BALANCE SHEET ARRANGEMENTS

We have not entered into, nor do we expect to enter into, any off-balance sheet arrangements. We also have not entered into any financial guarantees or other relevant commitments. In addition, we have not entered into any derivative contracts that are indexed to our equity interests and classified as owners’ equity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing or hedging with us.

RELATED-PARTY TRANSACTIONS

We enter into transactions with our related parties from time to time. Related party transactions are set out in Note 27 to ‘‘Appendix I — Accountant’s Report.’’ Our Directors confirm that these transactions were conducted in the ordinary and usual course of business and on an arm’s length basis.

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In particular, we set out below details of the amounts due to and due from our ultimate holding company, fellow subsidiaries, associates, directors and related parties.

As of December 31, 2018 2019 2020 (HK$ in millions)

Non-Trade in nature Amount due from the ultimate holding company. . . 66.4 72.9 — Amount due from a fellow subsidiary ...... 12.5 12.6 12.9 Amountsduefromdirectors...... — 16.0 51.3 Amount due to the ultimate holding company. . . . . ——(126.0) Amount due to a director ...... (35.5) (31.9) (26.9) Amountduetoarelatedcompany...... (1.0) (1.0) —

Trade in nature Amountduefromanassociate...... 4.8 4.3 3.8 Amountduefromarelatedcompany...... — 0.05 0.1 Amountduetoafellowsubsidiary...... 0.03 ——

We may from time to time incur non-trade related short-term borrowings from/to ultimate holding company, fellow subsidiaries, associate and directors, particularly during year end for inventory stock up and business development. As of December 31, 2018, 2019 and 2020, the amounts due from/to the ultimate holding company, fellow subsidiaries, associate and directors were unsecured, interest free and repayable on demand.

As of December 31, 2020, amount due to the ultimate holding company represented the dividends declared by the companies now comprising our Group that remained unsettled as of the same date.

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma statement of adjusted net tangible assets of our Group prepared in accordance with Rule 4.29 of the Listing Rules are set out below to illustrate the effect of the [REDACTED] on the net tangible assets of our Group attributable to the owners of the Company as of 31 December 2020 as if the [REDACTED] had taken place on 31 December 2020.

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The unaudited pro forma adjusted net tangible assets has been prepared for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the combined net tangible assets of our Group as of 31 December 2020 or at any future dates following the [REDACTED].

Unaudited Audited combined pro forma net tangible assets adjusted net of our Group tangible assets attributable to Estimated net attributable to Unaudited pro owners of the [REDACTED] owners of the forma adjusted net Company as of 31 Special interim from the Company as of 31 tangible assets per December 2020 dividend declared [REDACTED] December 2020 Share HK$’000 HK$’000 HK$’000 HK$’000 HK$’ (Note 1) (Note 2) (Note 3) (Note 4)

Based on an [REDACTED] of HK$[REDACTED] per Share [977,950] [(929,000)] [REDACTED] [REDACTED] [REDACTED] Based on an [REDACTED] of HK$[REDACTED] per Share [977,950] [(929,000)] [REDACTED] [REDACTED] [REDACTED]

Notes:

1. The audited combined net tangible assets attributable to owners of the Company as of 31 December 2020 is extracted from the Accountant’s Report set forth in Appendix I to this document, which is based on the audited combined net assets of our Group as of 31 December 2020 of approximately HK$[978,883,000] with an adjustment for the intangible assets of our Group as of 31 December 2020 of approximately HK$[933,000].

2. Pursuant to the written resolutions passed by the sole Shareholder of the Company in [30] June 2020, the Company declared a conditional special interim dividend in the amount of [HK$929,000,000] to the then sole Shareholder. The special dividend is subject to and conditional upon the completion of the [REDACTED] on or before 30 June 2022.

3. The estimated net [REDACTED] from the [REDACTED] are based on [REDACTED] Shares and the indicative [REDACTED] of HK$[REDACTED] per [REDACTED] and HK$[REDACTED] per [REDACTED], being the low end to high end of the indicative [REDACTED], respectively, after deduction of the [REDACTED] fees and other related expenses, excluding [REDACTED] expenses of approximately HK$[REDACTED] which has been accounted for in the combined statement of comprehensive income for the year ended 31 December 2020, and does not take account of any Shares which may be issued upon the exercise of the [REDACTED], or any Shares which may be issued upon exercise of any options which may be granted under the Share Option Scheme, or Shares which may be granted and issued or repurchased by the Company pursuant to the general mandate and the repurchase mandate.

4. The unaudited pro forma adjusted net tangible assets per Share is arrived at after adjustments referred to in the preceding paragraphs and on the basis that a total of [REDACTED] Shares were in issue assuming that the [REDACTED] and [REDACTED] had been completed on 31 December 2020 but taking no account of any Shares (a) which may be issued pursuant to the exercise of the [REDACTED] and options which may be granted under the [Share Option Scheme]; or (b) which may be issued and repurchased by us pursuant to the general mandates granted to our Directors to issue or repurchase Shares as described in the section headed ‘‘Share Capital’’ in this document.

5. No other adjustment has been made to the unaudited pro forma adjusted net tangible assets to reflect any trading results or other transactions of our Group entered into subsequent to 31 December 2020.

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[REDACTED] EXPENSES

The [REDACTED] expenses represent professional fees, [REDACTED] commission, and other fees incurred in connection with the [REDACTED]. We estimate that our [REDACTED] expenses will be approximately HK$[REDACTED] (assuming an [REDACTED] of HK$[REDACTED] per Share (being the mid-point of the indicative [REDACTED]) and no exercise of the [REDACTED]), of which approximately HK$[REDACTED] is directly attributable to the issue of our Shares to the public and will be capitalized and amortized, and approximately HK$[REDACTED] is expected to be expensed in 2021.

DIVIDEND AND DIVIDEND POLICY

Dividend

In June 2021, we declared a conditional special interim dividend to our then sole Shareholder, Eminent Leader, in the amount of HK$929.0 million in respect of our retained earnings for the period up to June 30, 2021. The payment of such interim dividend is subject to and conditional upon the [REDACTED] and the [REDACTED] being completed on or before June 30, 2022 and subject to such condition being satisfied and with a view to maintaining sufficient flexibility for our operations and business expansion, such interim dividend will be paid by us on or before December 31, 2022 using resources available to us. None of the net [REDACTED] from the [REDACTED] will be used to fund such dividend. As of the date of declaration of such interim dividend, Eminent Leader was owned as to 99.96%, 0.01%, 0.01%, 0.01% and 0.01% by Mr. C. Y. Fong, Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong, respectively.

Our auditor will perform a special audit on our financial performance for the six months ended June 30, 2021 and such special audit will be completed before the [REDACTED].

Dividend Policy

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DISTRIBUTABLE RESERVES

As of December 31, 2020, our Company did not have any distributable reserves available for distribution to our Shareholders.

WORKING CAPITAL CONFIRMATION

Our Directors are of the opinion that, taking into account the net [REDACTED] from the [REDACTED] and the financial resources available to us, including cash and cash equivalents and cash to be generated from our operating activities, we have sufficient working capital for our present requirements, that is at least 12 months from the date of this document.

IMPACT OF THE COVID-19 PANDEMIC

The sales of our products to the on-trade and off-trade markets, in particular sales to on-trade markets, were materially and adversely impacted by lockdowns, closure of business and social distancing measures, resulting in revenue loss or slower revenue growth. For example, in Hong Kong, substantially all of our sales were from retail customers. Social distancing and health measures at various degrees, including business and school closures, implemented by the government of Hong Kong, resulted in a decline in foot traffic across restaurants, bars and convenience stores, which in turn affected our offline sales. In 2020, our sales from Hong Kong decreased from HK$982.4 million in 2019 to HK$873.3 million in 2020. In China, by the end of April 2020, people’s lives and production activities had gradually resumed normal, with occasional cases of COVID-19 reported in local areas. Our sales from China increased from HK$856.4 million in 2019 to HK$984.3 million in 2020.

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We adopted certain hygiene and precautionary measures in accordance with the applicable regulations implemented in relation to the outbreak. We also implemented a series of preventive measures at our headquarters in Hong Kong and offices in China to ensure the safety of our customers and employees, including (i) temperature checks for employees twice a day, (ii) mandatory requirement for all employees to wear masks, and (iii) constant sanitization. We did not incur a material amount of costs in relation to such measures. As of the Latest Practicable Date, we had no case of employee infection.

Assuming the worst case scenario of the COVID-19 outbreak, in which we:

. cease all operations from July 2021 onward, which assumes that from July 2021 onward, we will not earn or incur (i) any revenue and costs in relation to sales activities, (ii) any expenses in relation to marketing activities, and (iii) any expenses in relation to the production of In-house Brand Products or purchases of Third-party Brand Products and raw materials;

. keep all of our employees and make all their salaries payments;

. settle all of our outstanding trade payables as of June 30, 2021;

. estimate the settlement of trade receivables on a prudent basis by taking into account our historical settlement pattern;

. sell all of our inventories as of June 30, 2021;

. make the cash payment of dividend of HK$929 million after the [REDACTED];

. use 10% of the net [REDACTED] from the [REDACTED] as our working capital; and

. no expansion in production facilities and does not incur any capital expenditure,

we would have sufficient cash flow for our business to remain financially viable for at least the 12 months from the date of this document, which includes, but is not limited to the timely payment for (i) employee’s salaries payments, (ii) lease payments, and (iii) repayments of bank loans.

The worst case scenario analysis above is for illustrative purpose only. Our Directors consider the likelihood of such situation extremely remote.

NO MATERIAL ADVERSE CHANGE

Our Directors confirm that there has been no material adverse change in our financial or trading position, indebtedness, mortgage, contingent liabilities, guarantees or prospects since December 31, 2020, being the end date of the periods reported in the Accountant’sReportsetoutinAppendixI,and there is no event since December 31, 2020 that would materially affect the information shown in the Accountants’ Report set out in Appendix I.

DISCLOSURE REQUIRED UNDER LISTING RULES

Our Directors confirm that, except as otherwise disclosed in this document, as of the Latest Practicable Date, there are no circumstances that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules.

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FUTURE PLANS

See ‘‘Business — Business Strategies’’ for a detailed discussion of our future plans.

USE OF [REDACTED]

Assuming an [REDACTED] of HK$[REDACTED] per [REDACTED] (being the mid-point of the stated range of the [REDACTED] of between HK$[REDACTED] and HK$[REDACTED] per [REDACTED]), we estimate that we will receive net [REDACTED] of approximately HK$[REDACTED] from the [REDACTED] after deducting the [REDACTED] commissions and other estimated [REDACTED] in connection with the [REDACTED] and assuming that the [REDACTED] is not exercised. In line with our strategies, we intend to use our [REDACTED] from the [REDACTED] for the purposes and in the amounts set forth below:

(i) approximately [REDACTED]% or HK$[REDACTED], for investing in our In-house Brands, such as Tao Ti and Meko, by expanding the range of natural, healthy and functional products and upgrading production capabilities, including an integrated research and development and production facility; and

(ii) approximately [REDACTED]% or HK$[REDACTED], for creating new products for our international spirits and wines including but not limited to exploring co-branding and partnership opportunities with international brands to capture new demands and market opportunities, and making strategic investments in international spirits and wines production sites.

. Approximately [REDACTED]% or HK$[REDACTED], for enhancing our brand building and sales and marketing capabilities. We will increase our efforts on marketing and promotion of our existing and new brands as well as the products to be launched in the future. We will strive to enhance consumers’ recognition of our brands and products through creative marketing activities. In particular:

(i) approximately [REDACTED]% or HK$[REDACTED], for enhancing our brand building capabilities and related promotion activities for our In-house Brand Products;

(ii) approximately [REDACTED]% or HK$[REDACTED], for online sales and marketing efforts, and included other online marketing activities; and

(iii) approximately [REDACTED]% or HK$[REDACTED], for expanding or optimizing our distribution network.

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. Approximately [REDACTED]% or HK$[REDACTED], for strengthening our business operations, and environmental, social and governance (ESG) practices primarily including:

(i) approximately [REDACTED]% or HK$[REDACTED], for enhancing and strengthening our IT infrastructure, cloud system and data analytics capabilities for our business processes; and

(ii) approximately [REDACTED]% or HK$[REDACTED], for improving our existing facilities, such as adopting renewable energy sources and zero emission production facility, recycling facilities to collect and recycle packaging materials from consumers as well as during production.

. Approximately [REDACTED]% or HK$[REDACTED], for working capital and general corporate use.

If the [REDACTED] is set at the high-end of the [REDACTED] range or the low-end of the [REDACTED] range, the net [REDACTED] of the [REDACTED] will increase or decrease by approximately HK$[REDACTED] and HK$[REDACTED], respectively. To the extent our net [REDACTED] from the [REDACTED] are either more or less than expected, we will increase or decrease the intended use of our net [REDACTED] for the above purposes on a pro rata basis.

If the [REDACTED] is fully exercised, our Company will receive additional net [REDACTED] of approximately HK$[REDACTED] for [REDACTED] Shares to be allotted and issued upon the full exercise of the [REDACTED] based on the [REDACTED] of HK$[REDACTED] per [REDACTED], being the mid-point of the [REDACTED] range, and after deducting the [REDACTED] fees and commissions payable by our Company. The additional amount raised will be applied to the above areas of use of [REDACTED] on pro-rata basis.

If any part of our development plan does not proceed as planned for reasons such as changes in government policies that would render the development of any of our projects not viable, or the occurrence of force majeure events, we will carefully evaluate the situation and may reallocate the net [REDACTED] from the [REDACTED].

To the extent that the net [REDACTED] of the [REDACTED] are not immediately used for the purposes described above and to the extent permitted by the relevant laws and regulations, we only intend to place such proceeds in short-term interest-bearing deposits with licensed banks or authorized financial institutions in Hong Kong or China.

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The following is the text of a report set out on pages I-[1] to I-[3], received from the Company’s reporting accountant, PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this document. It is prepared and addressed to the directors of the Company and to the Joint Sponsors pursuant to the requirements of Hong Kong Standard on Investment Circular Reporting Engagements 200 Accountants’ Reports on Historical Financial Information in Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants.

[To insert PricewaterhouseCoopers letterhead] [DRAFT]

ACCOUNTANT’S REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE DIRECTORS OF TELFORD INTERNATIONAL HOLDINGS LIMITED, JEFFRIES HONG KONG LIMITED AND HSBC CORPORATE FINANCE (HONG KONG) LIMITED

Introduction

We report on the historical financial information of Telford International Holdings Limited (the ‘‘Company’’) and its subsidiaries (together, the ‘‘Group’’) set out on pages I-[4] to I-[54], which comprises the combined statements of financial position as at 31 December 2018, 2019 and 2020 and the combined statements of comprehensive income, the combined statements of changes in equity and the combined statements of cash flows for each of the years then ended (the ‘‘Track Record Period’’)anda summary of significant accounting policies and other explanatory information (together, the ‘‘Historical Financial Information’’). The Historical Financial Information set out on pages I-[4] to I-[54] forms an integral part of this report, which has been prepared for inclusion in the document of the Company dated [.](the‘‘Document’’) in connection with the proposed [REDACTED] of the Company on the Main Board of The Stock Exchange of Hong Kong Limited.

Directors’ responsibility for the Historical Financial Information

The directors of the Company are responsible for the preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information, and for such internal control as the directors determine is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error.

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Reporting accountant’s responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200, Accountants’ Reports on Historical Financial Information in Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (‘‘HKICPA’’). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountant’s judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountant considers internal control relevant to the entity’s preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the Historical Financial Information gives, for the purposes of the accountant’s report, a true and fair view of the combined financial position of the Group as at 31 December 2018, 2019 and 2020 and of its combined financial performance and its combined cash flows for the Track Record Period in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information.

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REPORT ON MATTERS UNDER THE RULES GOVERNING THE LISTING OF SECURITIES ON THE STOCK EXCHANGE OF HONG KONG LIMITED (THE ‘‘LISTING RULES’’)AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE

Adjustments

In preparing the Historical Financial Information, no adjustments to the Underlying Financial Statements as defined on page I-[4] have been made.

Dividends

We refer to Note 26 to the Historical Financial Information which contains information about the dividends declared by the Company in respect of the Track Record Period.

No statutory financial statements for the Company

No statutory financial statements have been prepared for the Company since its date of incorporation.

[PricewaterhouseCoopers] Certified Public Accountants Hong Kong [.]

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I. HISTORICAL FINANCIAL INFORMATION OF THE GROUP

Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of this accountant’sreport.

The financial statements of the Group for the Track Record Period, on which the Historical Financial Information is based, were audited by PricewaterhouseCoopers in accordance with Hong Kong Standards on Auditing issued by the HKICPA (‘‘Underlying Financial Statements’’).

The Historical Financial Information is presented in Hong Kong dollars (‘‘HK$’’)andall values are rounded to the nearest thousand (‘‘HK$’000’’) except when otherwise indicated.

COMBINED STATEMENTS OF COMPREHENSIVE INCOME

Year ended 31 December Notes 2018 2019 2020 HK$’000 HK$’000 HK$’000

Revenue...... 5 1,355,477 1,838,808 1,857,605 Costofsales...... 6 (897,130) (1,207,003) (1,239,480)

Gross profit ...... 458,347 631,805 618,125

Otherincome...... 10(a) 10,662 9,649 23,738 Othergains/(losses),net...... 10(b) 4,691 (3,987) 4,573 Provision for impairment of receivables...... 3.1(b) (809) (193) (2,188) Sellinganddistributionexpenses...... 6 (228,655) (240,140) (256,204) Administrativeexpenses...... 6 (87,441) (99,832) (104,166)

Operating profit ...... 156,795 297,302 283,878

Financeincome...... 11 2,258 3,616 4,707 Financecosts...... 11 (835) (1,876) (1,511)

Financeincome,net...... 11 1,423 1,740 3,196 Shareofprofitofanassociate...... 15 440 441 529

Profit before income tax ...... 158,658 299,483 287,603 Incometaxexpense...... 12 (28,990) (62,691) (60,997)

Profit for the year ...... 129,668 236,792 226,606

Other comprehensive (loss)/income: Item that may be reclassified to profit or loss Currencytranslationdifferences...... (4,824) (4,055) 20,964

Total comprehensive income for the year ...... 124,844 232,737 247,570

Earnings per share attributable to owners of the Company for the year Basicanddiluted...... 13 N/A N/A N/A

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COMBINED STATEMENTS OF FINANCIAL POSITION

As at 31 December Notes 2018 2019 2020 HK$’000 HK$’000 HK$’000

ASSETS Non-current assets Property,plantandequipment...... 14 102,625 102,742 103,443 Intangibleassets...... 107 8 933 Right-of-useassets...... 24(a) 22,002 31,711 35,343 Deposit...... 17 2,320 4,692 4,919 Investmentinanassociate...... 15 2,574 2,724 3,165 Deferredincometaxassets...... 23 913 — 5,161

130,541 141,877 152,964

Current assets Inventories...... 16 287,532 373,964 454,597 Tradeandotherreceivables...... 17 268,221 326,779 253,250 Amount due from the ultimate holding company. . . . 27 66,436 72,916 — Amountduefromafellowsubsidiary...... 27 12,468 12,568 12,888 Amountsduefromdirectors...... 27 — 16,000 51,300 Amountduefromanassociate...... 27 4,765 4,270 3,775 Amountduefromarelatedcompany...... 27 — 53 112 Financial assets at fair value through profit or loss . . 18 — 11,144 59,438 Short-termbankdeposits...... 19 127,858 184,600 221,158 Cashandcashequivalents...... 19 125,580 164,425 302,518

892,860 1,166,719 1,359,036

Total assets ...... 1,023,401 1,308,596 1,512,000

EQUITY Capital and reserve Combinedcapital...... 20 —* —* —* Reserves...... 5,180 1,125 22,185 Retainedearnings...... 738,851 963,643 954,953

Total equity ...... 744,031 964,768 977,138

* Below HK$1,000

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As at 31 December Notes 2018 2019 2020 HK$’000 HK$’000 HK$’000

LIABILITIES Non-current liabilities Deferred income tax liabilities ...... 23 9,695 10,176 9,590 Leaseliabilities...... 24(a) 9,260 19,935 21,733

18,955 30,111 31,323

Current liabilities Bankborrowings...... 22 5,124 8,915 — Leaseliabilities...... 24(a) 12,768 13,204 14,768 Tradeandotherpayables...... 21 192,299 235,457 316,420 Amount due to the ultimate holding company...... 27 ——126,035 Amountduetoafellowsubsidiary...... 27 29 —— Amountduetoadirector...... 27 35,546 31,946 26,860 Amountduetoarelatedcompany...... 27 1,012 1,012 — Contractliabilities...... 21 2,873 4,407 2,053 Currentincometaxliabilities...... 10,764 18,776 17,403

260,415 313,717 503,539

Total liabilities ...... 279,370 343,828 534,862

Total equity and liabilities ...... 1,023,401 1,308,596 1,512,000

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COMBINED STATEMENTS OF CHANGES IN EQUITY

Attributable to owners of the Company Statutory reserves Combined Exchange of PRC Retained capital reserve subsidiaries earnings Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 1 January 2018 (Unaudited)...... —* 2,245 3,825 624,117 630,187 Profit and comprehensive income for the year ———129,668 129,668 Currencytranslationdifferences...... — (4,824) ——(4,824)

Total comprehensive income for the year . . . — (4,824) — 129,668 124,844 Transactions with owners: Transfertostatutoryreserves...... ——3,934 (3,934) — Dividends (Note 26)...... ———(11,000) (11,000)

— (4,824) 3,934 114,734 113,844

At 31 December 2018 and 1 January 2019 . —* (2,579) 7,759 738,851 744,031 Profit and comprehensive income for the year ———236,792 236,792 Currencytranslationdifferences...... — (4,055) ——(4,055)

Total comprehensive income for the year . . . — (4,055) — 236,792 232,737 Transactions with owners: Dividends (Note 26)...... ———(12,000) (12,000)

— (4,055) — 224,792 220,737

At 31 December 2019 and 1 January 2020 . —* (6,634) 7,759 963,643 964,768 Profit and comprehensive income for the year ———226,606 226,606 Currencytranslationdifferences...... — 20,964 ——20,964

Total comprehensive income for the year . . . — 20,964 — 226,606 247,570 Transactions with owners: Transfertostatutoryreserves...... ——96 (96) — Dividends (Note 26)...... ———(235,200) (235,200)

— 20,964 96 (8,690) 12,370

At 31 December 2020 ...... —* 14,330 7,855 954,953 977,138

* Below HK$1,000

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COMBINED STATEMENTS OF CASH FLOWS

Year ended 31 December Notes 2018 2019 2020 HK$’000 HK$’000 HK$’000

Cash flows from operating activities Cashgeneratedfromoperations...... 25(a) 80,356 227,873 395,387 Incometaxpaid...... (25,476) (53,285) (68,119)

Net cash generated from operating activities .... 54,880 174,588 327,268

Cash flows from investing activities Purchase of property, plant and equipment...... 14 (7,235) (17,952) (19,725) Purchaseofintangibleassets...... ——(1,200) Proceeds from disposal of property, plant and equipment...... 25(b) 109 864 805 Proceeds from bank deposits matured ...... 431,998 776,650 922,838 Placement of bank deposits ...... (523,735) (844,536) (1,007,690) Interestreceived...... 2,258 3,616 4,707

Netcashusedininvestingactivities...... (96,605) (81,358) (100,265)

Cash flows from financing activities Dividendpaid...... 26 (11,000) (12,000) — Interestpaid...... (310) (546) (189) Proceeds from bank borrowings ...... 5,124 3,791 — Repaymentofbankborrowings...... (833) — (8,915) Payments of principal elements of the lease liabilities...... 25(c) (10,108) (15,996) (15,982) Payments of interest elements of the lease liabilities . 25(c) (525) (1,330) (1,322) Repayment from/(advances to) the ultimate holding company...... 6,000 (6,480) (36,249) Advancestodirectors...... — (19,600) (76,300) Repaymentfromdirectors...... 38,546 — 35,914

Net cash generated from/(used in) financing activities ...... 26,894 (52,161) (103,043)

Net (decrease)/increase in cash and cash equivalents...... (14,831) 41,069 123,960 Cash and cash equivalents at beginning of the year. . 19 142,625 125,580 164,425 Effect of currency translation differences on cash andcashequivalents...... (2,214) (2,224) 14,133

Cash and cash equivalents at end of the year .... 19 125,580 164,425 302,518

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II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION

1. GENERAL INFORMATION, REORGANISATION AND BASIS OF PRESENTATION

1.1 GENERAL INFORMATION

Telford International Holdings Limited (the ‘‘Company’’) was incorporated in the Cayman Islands on 30 March 2021 as an exempted company with limited liability under the Companies Act, Cap. 22 (Act 3 of 1961, as consolidated and revised) of the Cayman Islands. The address of the Company’s principal place of business is 2/F, Tower A, Regent Centre, 63 Wo Yi Hop Road, Kwai Chung, New Territories, Hong Kong.

The Company is an investment holding company and its subsidiaries (together, the ‘‘Group’’) are principally engaged in wholesale and distribution of wine and spirits, beverage and beer (collectively referred to as the ‘‘[REDACTED] Business’’).

The Historical Financial Information is presented in Hong Kong dollars (‘‘HK$’’) and all values are rounded to the nearest thousand (‘‘HK$’000’’) unless otherwise stated.

1.2 REORGANISATION

Prior to the incorporation of the Company and the completion of the reorganisation (the ‘‘Reorganisation’’)as described below, the [REDACTED] Business was mainly carried out by Telford International Company Limited, Fong’s Logistics Limited, Wing Tai Liquor & Fruit Company Limited, Telford International Industries Limited and Telford Wine & Spirits (Shanghai) Limited, which are wholly-owned subsidiaries of Eminent Dragon Limited (‘‘Eminent Dragon’’) (collectively, the ‘‘Operating Companies’’). Eminent Dragon also held a wholly-owned subsidiary, namely Migo (HK) Limited, which does not engaged in any of the [REDACTED] Business.

The Operating Companies were controlled collectively by Mr. Fong Chin Yue, Ms. Fong So Ching, Lucia, Mr. Fong Chun Man, Ms. Fong So Kam, Emily and Mr. Fong Chun Keung, Vincent (collectively the ‘‘Controlling Shareholders’’) throughout the Track Record Period.

In preparation for the [REDACTED] and the [REDACTED] of the shares of the Company on the Main Board of the Stock Exchange of Hong Kong Limited (the ‘‘[REDACTED]’’), the Group underwent the Reorganisation which principally involved the following steps:

(i) On 26 January 2021, Eminent Dragon disposed of its entire equity interest in Migo (HK) Limited to Eminent Leader Limited (‘‘Eminent Leader’’), the ultimate holding company.

Immediately upon completion of the said transfer, Migo(HK)Limitedceasedtobeasubsidiary of Eminent Dragon.

(ii) On 30 March 2021, the Company was incorporated in the Cayman Islands and one subscriber share was transferred to Eminent Leader on the same day at nominal consideration. As such, the Company became a wholly-owned subsidiary of Eminent Leader.

(iii) On 13 May 2021, Telford Beverage Brands Company Limited and Telford Spirits Brands Company Limited were incorporated in Hong Kong with one and one subscriber share transferred to Eminent Dragon on the same day, respectively.

(iv) On 21 June 2021, Eminent Leader and the Company entered into a sale and purchase agreement, pursuant to which Eminent Leader agreed to transfer its entire equity interest in Eminent Dragon to the Company.

Immediately upon completion of the said transfer, Eminent Dragon became a wholly-owned subsidiary of the Company.

After the completion of the Reorganisation steps described above, the Company became the holding company of the subsidiaries now comprising the Group.

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As at the date of this report, the Company had direct or indirect interests in the following subsidiaries: ACCOUNTANT I APPENDIX

Effective interest held by the Group As at Date of the date incorporation/ Place of incorporation/ Issued and paid As at 31 December of this Name of subsidiaries establishment establishment Principal activities up capital 2018 2019 2020report Note

Direct interest Eminent Dragon Limited ...... 8January1999 British Virgin Islands Investment holding US$20 100% 100% 100% 100% (b)

Indirect interests Telford International Company Limited . 4 June 1982 Hong Kong Sale of international spirits and HK$500,000 100% 100% 100% 100% (a) wines and soft beverages Fong’s Logistics Limited ...... 13February1992 Hong Kong Provision of logistic services HK$9,000 100% 100% 100% 100% (a) ‘‘

Wing Tai Liquor & Fruit Company 20 December 2002 Hong Kong Sale of alcoholic and soft HK$2 100% 100% 100% 100% (d) WARNING Limited ...... beverages and other products Telford (China) Company Limited. . . . . 11 September 2002 Hong Kong Investment holding HK$7,800,000 100% 100% 100% 100% (c) Telford International Industries Limited . 22 May 2008 Hong Kong Production of postmix products HK$100 100% 100% 100% 100% (a) Shenzhen Telford Trading Company 7 January 2002 The People’s Republic of Sale of international spirits and HK$13,000,000 100% 100% 100% 100% (e) ’’ ‘‘ ’’ DOCUMENT. THIS OF COVER THE ON Limited– ...... China (the PRC ) wines and soft beverages

TelfordI-10 Wine & Spirits (China) Limited. 10 November 2006 Hong Kong Investment holding HK$2 100% 100% 100% 100% (c) Telford Wine & Spirits (Shanghai) 24 May 2007 The PRC Sale of international spirits and US$1,400,000 100% 100% 100% 100% (f) Limited ...... wines and soft beverages –

Notes: (a) This company has changed its financial year end from 31 March to 31 December pursuant to a board resolution dated 1 December 2020. The financial statements for the years ended 31 March 2018, 2019 and 2020 were audited by PricewaterhouseCoopers for statutory purpose. The financial statements for the nine months period from 1 April 2020 to 31 December 2020 have not yet been issued. (b) No audited statutory financial statements have been issued for the subsidiary as it is not required under the statutory requirement of its place of incorporation. (c) The financial statements for the years ended 31 December 2018, 2019 and 2020 were audited by Maradebbie & Partners (Practising). (d) This company has changed its financial year end from 31 March to 31 December pursuant to a board resolution dated 1 December 2020. The financial statements for the years ended 31 March 2018, 2019 and 2020 were audited by W.N. SO & Co. The financial statements for the nine months period from 1 April 2020 to 31 December 2020 have not yet been issued. ’ (e) The audited financial statements for the years ended 31 December 2018, 2019 and 2020 was audited by 深圳普天會計師事務所有限公司. SREPORT (f) The audited financial statements for the years ended 31 December 2018 and 2019 was audited by 山東和信會計師事務所(特殊普通合夥)上海分所. The audited financial statements for the year ended 31 December 2020 was audited by PricewaterhouseCoopers Zhongtian LLP. THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. APPENDIX I ACCOUNTANT’SREPORT

1.3 BASIS OF PRESENTATION

Immediately prior to and after the Reorganisation as set out in Note 1.2, the [REDACTED] Business is ultimately controlled by the Controlling Shareholders. The [REDACTED] Business is mainly conducted through the Operating Companies of the Group. Pursuant to the Reorganisation, the Operating Companies are transferred to and held by the Company. The Company has not been involved in any other business prior to the Reorganisation and do not meet the definition of a business. The Reorganisation is merely a recapitalisation of the [REDACTED] Business with no change in management of such business and the ultimate owners of the [REDACTED] Business remain the same. Accordingly, the Group resulting from the Reorganisation is regarded as a continuation of the [REDACTED] Business under the Operating Companies and, for the purpose of this report, the Historical Financial Information has been prepared and presented as a continuation of the combined financial statements of the Operating Companies, with the assets and liabilities of the Group recognised and measured at the carrying amounts of the [REDACTED] Business for all periods presented.

Inter-company transactions, balances and unrealised (losses)/gains on transactions between group companies are eliminated upon combination.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the Historical Financial Information are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

The Historical Financial Information has been prepared in accordance with the principal accounting policies as set out below which are in accordance with Hong Kong Financial Reporting Standards (‘‘HKFRSs’’)issuedbythe Hong Kong Institute of Certified Public Accountants (‘‘HKICPA’’). They have been prepared under the historical cost convention.

The preparation of the Historical Financial Information in conformity with HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the combined financial statements, are disclosed in Note 4.

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(i) New standards, amendments to standards and interpretations which are not yet effective

The following new standards and amendments to existing standards have been issued but are not yet effective and have not been early adopted by the Group:

Effective for accounting periods beginning on or after

HKAS 39, HKFRS 4, HKFRS 7, HKFRS 9 IBOR Reform — Phase 2 1 January 2021 and HKFRS 16 (Amendments) HKAS 16 (Amendments) Proceeds before intended use 1 January 2022 HKAS 37 (Amendments) Onerous contracts — cost of fulfilling a 1 January 2022 contract HKFRS 3 (Amendments) Reference to the conceptual framework 1 January 2022 Accounting Guideline 5 (Revised) Revised accounting guideline 5 for 1 January 2022 merger accounting for common control combinations Annual improvements Annual Improvements 2018–2020 cycle 1 January 2022 HKAS 1 (Amendments) Classification of liabilities as current or 1 January 2023 non-current HKAS 1 (Amendments) HKFRS Practice Statement 2 — 1 January 2023 Disclosure of Accounting Policies HKAS 8 (Amendments) Definition of Accounting Estimates 1 January 2023 HKFRS 17 Insurance Contracts 1 January 2023 HKFRS 10 and HKAS 28 (Amendments) Sale or Contribution of Assets between To be determined an Investor and its Associate or Joint Venture

The Group will adopt the above amendments and improvements to standards when they become effective, and considered that the impact of adoption of the above amendments and improvements to standards will not be significant to the Group’s results and financial position.

(ii) Impact to the combined profit after income tax of the Group in relation to the change of financial year end of certain Hong Kong incorporated subsidiaries of the Group (‘‘HK Subsidiaries’’).

Pursuant to the board resolutions of the HK Subsidiaries dated 1 December 2020, the HK Subsidiaries, namely Telford International Company Limited, Fong’s Logistics Limited, Wing Tai Liquor & Fruit Company Limited and Telford International Industries Limited have changed their financial year end from 31 March to 31 December in order to align with that of the PRC operating subsidiaries of the Group.

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The comparison below (the ‘‘Comparison’’) illustrates the impact to the combined profit after income tax of the Group for the Track Record Period as a result of the change in financial year end of the HK Subsidiaries:

With the HK Subsidiaries With the HK Impact to the adopting Subsidiaries combined profit 31 December 2018 adopting after income tax of as financial year 31 March 2019 as the Group end (Unaudited) financial year end increase/(decrease) HK$’000 HK$’000 HK$’000 (A) (B) (A)–(B)

Combined profit after income tax of the HK Subsidiaries for the year...... 96,622 96,663 (41)

With the HK Subsidiaries With the HK Impact to the adopting Subsidiaries combined profit 31 December 2019 adopting after income tax of as financial year 31 March 2020 as the Group end (Unaudited) financial year end increase/(decrease) HK$’000 HK$’000 HK$’000 (A) (B) (A)–(B)

Combined profit after income tax of the HK Subsidiaries for the year...... 114,863 100,204 14,659

With the HK With the HK Subsidiaries Subsidiaries Impact to the adopting adopting combined profit 31 December 2020 31 March 2021 as after income tax of as financial year financial year end the Group end (Unaudited) (Unaudited) increase/(decrease) HK$’000 HK$’000 HK$’000 (A) (B) (A)–(B)

Combined profit after income tax of the HK Subsidiaries for the year...... 96,459 113,213 (16,754)

2.2 Principles of consolidation and equity accounting

Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

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Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities.

2.3 Business combinations

The Group applies the acquisition method to account for business combinations except for business combination under common control. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis. Non- controlling interests in the acquiree that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation are measured at either fair value or the present ownership interests’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other components of non-controlling interests are measured at their acquisition date fair value, unless another measurement basis is required by HKFRSs.

Acquisition-related costs are expensed as incurred.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with HKFRS 9 in profit or loss. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.

The excess of the consideration transferred, the amount of any non-controlling interests in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interests recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit or loss.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.

2.4 Separate financial statements

Investments in subsidiaries are accounted for at cost less impairment. Investment cost represents the aggregated net asset values of the combining subsidiaries upon consolidation. The results of subsidiaries are accounted for by the Company on the basis of dividend received and receivable.

Impairment testing of the investments in subsidiaries is required upon receiving a dividend from these investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is declared or if the carrying amount of the investment in the separate financial statements exceeds the carrying amount in the consolidated financial statements of the investee’s net assets including goodwill.

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2.5 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (‘‘CODM’’). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief executive officer and executive directors of the Company that makes strategic decisions.

2.6 Associate

An associate is an entity over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investment in an associate is accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition.

The Group’s share of post-acquisition profit or loss is recognised in the combined statements of comprehensive income, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to ‘‘share of profit of an associate’’ in the combined statements of comprehensive income.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the combined financial statements only to the extent of unrelated investor’s interest in the associate. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the associate have been changed where necessary to ensure consistency with the policies adopted by the Group.

2.7 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the entity operates (the ‘‘functional currency’’). The financial statements are presented in HK$, which is the Company’s functional and the Group’s presentation currency.

(b) Transactions and balances

All other foreign exchange gains and losses are presented in profit or loss on a net basis within ‘‘Other gains/(losses), net’’.

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. assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

. all resulting exchange differences are recognised in other comprehensive income.

On combination, exchange differences arising from the translation of any net investment in foreign entities are recognised in other comprehensive income.

2.8 Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment loss. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Depreciation of property, plant and equipment is calculated at rates sufficient to write off their cost less accumulated impairment losses over their estimated useful lives on a straight-line basis. The principal annual rates are as follows:

Land and buildings 2.6% Leasehold improvements Shorter of 10 years or lease term Furniture, fixtures and equipment 10% Motor vehicles 10%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’scarrying amount is greater than its estimated recoverable amount (Note 2.9).

Gain and loss on disposals are determined by comparing proceeds received with the carrying amounts and are recognised within administrative expenses in the combined statements of comprehensive income.

2.9 Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non- financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of their impairment at each reporting date.

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2.10 Financial assets and liabilities

(i) Classification

The Group classifies its financial assets and liabilities in the following measurement categories:

. those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss); and

. thosetobemeasuredatamortisedcost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (‘‘FVOCI’’).

The Group reclassifies debt investments when and only when its business model for managing those assets changes.

(ii) Recognition and measurement

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

(iii) Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (‘‘FVPL’’), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. The Group classifies its debt instruments to be carried at amortised cost. These financial assets are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other income and other gains, net together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the combined statements of comprehensive income.

(iv) Impairment

The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

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For trade receivables, the Group applies the simplified approach permitted by HKFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables, see Note 17 for further details.

2.11 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finished goods comprises purchase cost of goods for resale, duties, and freight costs. It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

2.12 Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

2.13 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturity of three months or less, and bank overdraft.

2.14 Share capital

Ordinary shares are classified as equity.

2.15 Trade and other payables

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.16 Current and deferred income tax

The tax expense for the year comprises current and deferred tax. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.

(a) Current income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted at the date of statement of financial position in the countries where the Group and its associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

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(b) Deferred income tax

Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates and laws that have been enacted or substantially enacted by the date of statement of financial position and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

2.17 Employee benefits

(a) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the combined statements of financial position.

(b) Post-employment obligations

Hong Kong

The Group’s defined contribution pension scheme is regulated under the Mandatory Provident Fund (‘‘MPF’’) in respect of employees in Hong Kong. The Group contributes to this plan based on certain percentages of the total salary of employees, subject to certain ceiling, as stipulated by the relevant regulations. The Group’s liability in respect of this plan is limited to the contributions payable in each period. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is available. Contributions to this plan are expensed as incurred. Assets of the plan are held by government authorities and are separate from those of the Group.

The PRC

Pursuant to the relevant local regulations in the PRC, the PRC subsidiaries of the Group participate in government retirement benefit schemes and are required to contribute to the scheme to fund the retirement benefits of the eligible employees. Contributions made to the schemes are calculated based on certain percentages of the applicable payroll costs or fixed sums for each employee with reference to a salary scale, as stipulated under the requirements in the PRC. The Group has no further obligation beyond the required contributions. The contributions under the schemes are expensed in the combined statements of comprehensive income as incurred.

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2.18 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

2.19 Leases

Leases are recognised as right-of-use assets and the corresponding liabilities at the date of which the respective leased asset is available for use by the Group.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

. fixed payments (including in-substance fixed payments), less any lease incentives receivables;

. variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date;

. amounts expected to be payable by the Group under residual value guarantees;

. theexercisepriceofapurchaseoptioniftheGroup is reasonably certain to exercise that option;

. payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined, or the Group’s incremental borrowing rate.

Right-of-use assets are measured at cost comprising the following:

. the amount of the initial measurement of lease liability;

. any lease payments made at or before the commencement date less any lease incentives received;

. any initial direct costs; and

. restoration costs.

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of twelve months or less.

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2.20 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenues are recognised when goods are transferred or services are rendered to the customer.

Depending on the terms of the contract and the laws that apply to the contract, service may be provided over time or at a point in time. Service is provided over time if the Group’s performance:

. provides all of the benefits received and consumed simultaneously by the customer;

. creates and enhances an asset that the customer controls as the Group performs; or

. does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

When determining the transaction price to be allocated from different performance obligations, the Group first determines the service fees that the Group entitles in the contract period and adjusts the transaction price for variable considerations and significant financing component, if any. The Group includes in the transaction price some or all of an amount of variable considerations only to the extent that it is highly probable that a significant reversal in amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

If contracts involve the provision of multiple services, the transaction price will be allocated from each performance obligation based on the stand-alone selling prices.

(a) Sales of goods

The Group purchases and sells a range of alcoholic and non-alcoholic beverages. Revenue is recognised when control of the products has transferred, being when the products are delivered to distributors/ customers. Delivery occurs when the products have been delivered to the specific location, the risks of obsolescence and loss have been transferred to the distributors/customers, and either the distributors/ customers have accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

The beverages are often sold with retrospective volume discounts based certain periodic sales targets. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. Accumulated experience is used to estimate and provide for the discounts, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. No significant element of financing is deemed present as the sales are madewithacredittermof30to90days.

As trade receivable is recognised when the beverages are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. The Group issues invoices when the beverages are delivered to the customers with credit terms of 30 to 90 days. Trade receivables are recognised for amounts billed to customers for sales of beverages. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Cash or bank acceptance notes collected from certain wholesalers/customers before product delivery is recognised as contract liabilities.

(b) Interest income

Interest income is recognised on a time-proportion basis using the effective interest method.

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2.21 Government grant

Grants from the government are recognised at their fair value where the grant is received by the Group, and the Group will comply with all attached conditions.

Government grants relating to costs are recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate.

2.22 Dividend distributions

Dividend distribution to the Group’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Group’s shareholders or directors, as appropriate. Dividend income is recognised when the right to receive payment is established.

3 FINANCIAL RISK MANAGEMENT

3.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risks (including foreign exchange risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of the financial markets and seeks to minimise the potential adverse effects on the Group’s financial performance.

Risk management is carried out by management of the Group. Management identifies and evaluates financial risks in close co-operation within the Group to cope with overall risk management, as well as specific areas, such as foreign exchange risk, interest rate risk, credit risk and liquidity risk.

(a) Market risk

Market risk refers to the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: foreign exchange risk and interest rate risk.

(i) Foreign exchange risk

The Group’s foreign currency transactions are mainly denominated in United States dollars (‘‘US$’’) and Renminbi (‘‘RMB’’). The Group is subject to foreign exchange risk arises from future commercial transactions and recognised assets and liabilities which are denominated in a currency that is not the Group’s functional currency.

Management considers that foreign exchange risk with respect to US$ is not significant as HK$ is pegged to US$. The Group manages its foreign currency risk by closely monitoring the movement of the foreign currency rates.

At 31 December 2018, 2019 and 2020, if HK$ had strengthened/weakened by 5%, 5% and 5% against RMB with all other variables held constant, post-tax profit for the year would have been approximately HK$528,000, HK$1,117,000 and HK$1,369,000 lower/higher, respectively, mainly as a result of foreign exchange losses/gains on translation of RMB denominated net assets.

(ii) Interest rate risk

The Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest rate risk arises from lease liabilities.

Lease liabilities issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash held at variable rates. The Group has not hedged its cash flow and fair value interest rate risk.

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Management considers the risk is insignificant to the Group.

(b) Credit risk

The Group’s credit risk is primarily attributable to trade and other receivables, amount due from a related company, amount due from an associate, amount due from directors, short-term deposits and cash and cash equivalents included in the statement of financial position, which represent the Group’smaximum exposure to credit risk in relation to its financial assets. Management has a credit policy in place and the exposures to these credit risks are monitored on an ongoing basis.

Cash and cash equivalents and short-term deposits

To manage the risk arising from cash at bank, the Group only transacts with a reputable bank which is a high quality financial institution. There has no recent history of default in relation to this financial institution. The expected credit losses approximate zero for the years ended 31 December 2018, 2019 and 2020.

Trade receivables

The Group is exposed to concentration of credit risk as at 31 December 2018, 2019 and 2020 on trade receivables from the Group’s top five customers amounting to approximately HK$126,530,000, HK$161,408,000 and HK$107,101,000 and accounted for 56%, 56% and 53% of the total trade receivables balance. These major customers of the Group are reputable organisations that management considers their credit risk is limited in this regard.

Impairment policies for trade receivables

The Group applied the simplified approach in HKFRS 9 to measure the provision for impairment at lifetime expected credit loss. Except for trade receivables with known insolvencies or significant outstanding balances which are assessed individually, the Group determines the expected credit loss on the remaining balances by using a provision matrix grouped by common risk characteristic. As part of the Group’s credit risk management, the Group uses debtor’s aging to assess the provision for credit loss for its customers in relation to its operation because these customers share common risk characteristics that represent their abilities to pay all amounts due in accordance with the contractual terms.

Measurement of expected credit loss

The expected loss rates are based on the aging and deterioration rate of unsettled trade receivables and the corresponding historical credit losses experienced. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The Group has identified the consumer price index of Hong Kong and the PRC in which it sells its beverages to be the most relevant factors, and accordingly adjusts the historical loss rates based on expected changes in these factors.

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The provision for impairment of trade receivables and the corresponding expected loss rates as at 31 December 2018, 2019 and 2020 were determined as follows:

The provision for impairment of trade receivables as at 31 December 2018, 2019 and 2020 were determined as follows:

Past due Not past Past due up Past due 31 Past due 61 over 90 due to 30 days to 60 days to 90 days days Total

At 31 December 2018 Trade receivables (HK$’000).... 187,788 13,359 18,025 6,260 3,835 229,267 Expectedlossrates...... 0.1% 3.0% 0.8% 2.9% 12.7% 0.6%

Provision for impairment (HK$’000)...... 269 406 144 180 486 1,485

At 31 December 2019 Trade receivables (HK$’000).... 209,241 36,024 38,500 1,974 1,440 287,179 Expectedlossrates...... 0.1% 1.8% 1.0% 5.0% 31.5% 0.5%

Provision for impairment (HK$’000)...... 278 657 390 98 454 1,877

At 31 December 2020 Trade receivables (HK$’000).... 170,676 13,092 13,380 2,915 4,152 204,795 Expectedlossrates...... 0.4% 5.0% 1.9% 11.3% 34.7% 1.6%

Provision for impairment (HK$’000)...... 641 655 255 328 1,442 3,321

Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and indicators of severe financial difficulty.

Movements of provision for impairment of trade receivables during the years ended 31 December 2018, 2019 and 2020 are as follows:

2018 2019 2020 HK$’000 HK$’000 HK$’000

At 1 January 1,135 1,485 1,877 Provision for impairment of trade receivables 526 422 2,178 Write-off during the year (121) — (869) Currency translation differences (55) (30) 135

At 31 December 1,485 1,877 3,321

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Other receivables and amounts due from related companies, an associate and directors

For other receivables, amounts due from related companies, an associate and directors, management considers the probability of default upon initial recognition of asset and whether there has been significant increase in credit risk on an ongoing basis. To assess whether there is a significant increase in credit risk, the Group compares risk of a default occurring on the assets as at each reporting date with the risk of default as at the date of initial recognition. Especially the following indicators are incorporated:

. Internal credit rating;

. Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations;

. Actual or expected significant changes in the operating results of the counterparty; and

. Significant changes in the expected performance and behavior of the counterparty, including changes in the payment status of the counterparty.

Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in making a contractual payment/repayable demanded. The expected credit losses for amounts due from related companies, an associate and directors were minimal during the years ended 31 December 2018, 2019 and 2020.

The provision for impairment of other receivables as at 31 December 2018, 2019 and 2020 were determined as follows:

Other receivables 2018 2019 2020 HK$’000 HK$’000 HK$’000

At 1 January — 261 29 Provision for/(reversal of) impairment of other receivables 283 (229) 10 Currency translation differences (22) (3) 2

At 31 December 261 29 41

Impairment losses on trade and other receivables are presented as ‘‘Provision for impairment of trade and other receivables’’ within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.

Liquidity risk refers to a risk an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial assets.

Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities. The Group aims to maintain flexibility in funding by keeping sufficient cash.

The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining year at the date of statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.

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On Less than Between 1 Between 2 demand 1year and 2 years and 5 years Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 31 December 2018 Lease liabilities ...... — 13,209 7,748 2,573 23,530 Bankborrowings...... 5,124 ———5,124 Tradeandotherpayables.... — 192,299 ——192,299 Amount due to a director .... 35,546 ———35,546 Amount due to a related party 1,041 ———1,041

41,711 205,508 7,748 2,573 257,540

At 31 December 2019 Lease liabilities ...... — 14,919 8,106 12,072 35,097 Bankborrowings...... 8,915 ———8,915 Tradeandotherpayables.... — 235,457 ——235,457 Amount due to a director .... 31,946 ———31,946 Amount due to a related party 1,012 ———1,012

41,873 250,376 8,106 12,072 312,427

At 31 December 2020 Lease liabilities ...... — 15,867 9,958 12,982 38,807 Tradeandotherpayables.... — 316,420 ——316,420 Amount due to the ultimate holdingcompany...... 126,035 ———126,035 Amount due to a director .... 26,860 ———26,860

152,895 332,287 9,958 12,982 508,122

The table below summarises the maturity analysis of bank borrowings (excluding bank overdraft) based on agreed scheduled repayments set out in the loan agreements. The amounts include interest payments computed using contractual rates. Taking into account the Group’s combined financial position, the directors do not consider that it is probable that the bank will exercise its discretion to demand immediate repayment. The directors believe that such term loans will be repaid in accordance with the scheduled repayment dates set out in the loan agreements.

On Less than Between 1 Between 2 demand 1year and 2 years and 5 years Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 31 December 2018 Bankborrowings...... — 5,339 ——5,339

At 31 December 2019 Bankborrowings...... — 9,289 ——9,289

3.2 Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholder and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to the shareholder, return capital to the shareholder, issue new shares or sell assets to reduce debt.

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The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings, including bank borrowings and lease liabilities, less cash and cash equivalents. Total capital is calculated as equity, as shown in the statement of financial position, plus net debt. At 31 December 2018, 2019 and 2020, the Group was in a net cash position.

3.3 Fair value estimation

The carrying amounts less impairment provision of the Group’s current financial assets, including cash and cash equivalents, financial assets at fair value through profit or loss, amounts due from fellow subsidiaries/an associate/directors/a related company, trade and other receivables, excluding prepayments, and current financial liabilities, including amounts due to the ultimate holding company/fellow subsidiaries/directors/a related company, trade and other payables, bank borrowings and lease liabilities, approximate their fair values.

(a) Financial assets and liabilities

(i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value in the combined financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Group has classified its financial instruments into the three levels prescribed under the accounting standards. An explanation of each level follows underneath the table:

Level1 Level2 Level3 Total HK$’000 HK$’000 HK$’000 HK$’000

Financialassetsatfairvalue through profit or loss

At 31 December 2019 Structureddeposits...... — 11,144 — 11,144

At 31 December 2020 Structureddeposits...... — 59,438 — 59,438

The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as at the end of the reporting period. There were no transfers between levels 1 and 2 for recurring fair value measurements during the year.

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

(ii) Valuation techniques used to determine fair values

The quoted market prices or dealer quotes for similar instruments were used to value the structured deposits. All of the resulting fair value estimates are included in level 2.

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4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements used in preparing the financial statements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

(i) Estimated useful lives of property, plant and equipment

The Group determines the estimated useful lives and related depreciation charges for its property, plant and equipment. The estimate is based on historical experience of the actual useful lives of property, plant and equipment of similar natures and functions. It would change significantly as a result of technical innovations and competition actions in response to severe industry cycles. Management will revise the depreciation charges where useful lives are foreseen to differ from original estimates and write down technically obsolete or non-strategic assets that have been abandoned or sold.

(ii) Impairment of trade and other receivables

For trade receivables, the Group applies the simplified approach to provide for expected credit losses as prescribed by HKFRS 9, which requires the use of the lifetime expected credit loss for all trade receivables. Management’s judgement is involved in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Details of the key assumptions and inputs used are disclosed in Note 3.1(b).

5 REVENUE AND SEGMENT INFORMATION

The Group is principally engaged in the wholesale and distribution of wine and spirits, beverage and beer. Revenue recognised during the years ended 31 December 2018, 2019 and 2020 is as follows:

2018 2019 2020 HK$’000 HK$’000 HK$’000

Salesofgoods...... 1,355,477 1,838,808 1,857,605

The breakdown of the Group’s revenue by principal place of operations are as below:

2018 2019 2020 HK$’000 HK$’000 HK$’000

HongKong...... 958,732 982,392 873,338 ThePRC...... 396,745 856,416 984,267

1,355,477 1,838,808 1,857,605

During the years ended 31 December 2018, 2019 and 2020, all sources of revenue were recognised at a point in time.

(a) Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. The chief operating decision-makers (‘‘CODM’’), who are responsible for allocating resources and assessing performance of the operating segments, have been identified as the executive directors of the Company who make strategic and operating decisions.

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CODM oversees the business by the nature of the underlying products and separated the operations of the Group into different operating segments accordingly. As the Group is engaged in trading of different types of beverages, the performance of each operating segments is assessed based on their corresponding segment gross margins. CODM has identified three reportable operating segments by nature of products as follows:

(i) Natural, healthy and/or functional beverages, including ready-to-drink tea and other functional non- alcoholic beverages;

(ii) International spirits and wines, including different types of alcoholic beverages; and

(iii) Others, including packaged drinking water and soft drinks.

The gross margin of each operating segment is measured consistently throughout the Track Record Period, with operating expenses such as selling and distribution expenses and administrative expenses excluded from such measure.

Year ended 31 December 2018

Natural, healthy and/or International functional spirits and beverages wines Others Total HK$’000 HK$’000 HK$’000 HK$’000

Revenue...... 449,088 669,103 237,286 1,355,477 Costofsales...... (276,694) (464,904) (155,532) (897,130)

Gross profit ...... 172,394 204,199 81,754 458,347 Otherincome...... 10,662 Othergains,net...... 4,691 Provision for impairment of receivables...... (809) Selling and distribution expenses . . . . (228,655) Administrativeexpenses...... (87,441)

156,795

Financeincome...... 2,258 Financecosts...... (835)

Financeincome,net...... 1,423 Shareofprofitofanassociate...... 440

Profit before income tax ...... 158,658

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Year ended 31 December 2019

Natural, healthy and/or International functional spirits and beverages wines Others Total HK$’000 HK$’000 HK$’000 HK$’000

Revenue...... 480,087 1,121,688 237,033 1,838,808 Costofsales...... (288,574) (765,467) (152,962) (1,207,003)

Gross profit ...... 191,513 356,221 84,071 631,805 Otherincome...... 9,649 Otherlosses,net...... (3,987) Provision for impairment of receivables...... (193) Selling and distribution expenses . . . . (240,140) Administrativeexpenses...... (99,832)

297,302

Financeincome...... 3,616 Financecosts...... (1,876)

Financeincome,net...... 1,740 Shareofprofitofanassociate...... 441

Profit before income tax ...... 299,483

Year ended 31 December 2020

Natural, healthy and/or International functional spirits and beverages wines Others Total HK$’000 HK$’000 HK$’000 HK$’000

Revenue...... 438,672 1,216,729 202,204 1,857,605 Costofsales...... (260,946) (838,855) (139,679) (1,239,480)

Gross profit ...... 177,726 377,874 62,525 618,125 Otherincome...... 23,738 Othergains,net...... 4,573 Provision for impairment of receivables...... (2,188) Selling and distribution expenses . . . . (256,204) Administrativeexpenses...... (104,166)

283,878

Financeincome...... 4,707 Financecosts...... (1,511)

Financeincome,net...... 3,196 Shareofprofitofanassociate...... 529

Profit before income tax ...... 287,603

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As at 31 December 2018

Natural, healthy and/or International functional spirits and beverages wines Others Total HK$’000 HK$’000 HK$’000 HK$’000

Inventories...... 32,607 241,471 13,454 287,532

Non-currentassets...... 127,967 Currentassets...... 605,328 Investmentinanassociate...... 2,574

Total assets ...... 1,023,401

Other liabilities...... (274,246) Bankborrowings...... (5,124)

Net assets ...... 744,031

As at 31 December 2019

Natural, healthy and/or International functional spirits and beverages wines Others Total HK$’000 HK$’000 HK$’000 HK$’000

Inventories...... 31,713 311,307 30,944 373,964

Non-currentassets...... 139,153 Currentassets...... 792,755 Investmentinanassociate...... 2,724

Total assets ...... 1,308,596

Other liabilities...... (334,913) Bankborrowings...... (8,915)

Net assets ...... 964,768

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As at 31 December 2020

Natural, healthy and/or International functional spirits and beverages wines Others Total HK$’000 HK$’000 HK$’000 HK$’000

Inventories...... 33,024 399,515 22,058 454,597

Non-currentassets...... 149,799 Currentassets...... 904,439 Investmentinanassociate...... 3,165

Total assets ...... 1,512,000

Other liabilities...... (534,862)

Net assets ...... 927,138

During the years ended 31 December 2018, 2019 and 2020, there were one, one and one customer which individually contributed 10% or more to the revenue of the Group, respectively.

The Group’s non-current assets by geographical location are as follows:

As at 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

HongKong...... 123,492 112,361 112,350 ThePRC...... 7,049 29,516 40,614

130,541 141,877 152,964

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6 EXPENSES BY NATURE

2018 2019 2020 HK$’000 HK$’000 HK$’000

Cost of inventories sold (Note 16) ...... 878,768 1,189,555 1,221,014 Employee benefit expenses (Note 7) ...... 129,479 139,426 146,465 Advertisingexpenses...... 72,467 67,350 69,394 Warehousingandlogisticsserviceexpenses...... 23,302 31,502 36,490 Freightandmotorvehicleexpenses...... 25,143 26,198 24,881 Benefits and interests of directors (Note 8) ...... 8,628 9,109 9,253 Auditor’s remuneration — Auditservices...... 569 635 971 — Non-auditservices...... 123 109 109 Legalandprofessionalfees...... 2,723 3,191 2,336 Depreciation of property, plant and equipment (Note 14) . 15,712 16,913 17,730 Depreciation of right-of-use assets (Note 24(b)) ...... 9,910 16,720 17,581 Expenses related to short-term leases (Note 24(b)) ..... 2,764 770 810 Entertainmentexpenses...... 7,915 7,483 9,226 Travelling expenses...... 7,694 8,587 6,156 Insurance...... 3,844 4,016 3,992 Provisionforinventories...... 201 121 362 Others...... 23,984 25,290 33,080

1,213,226 1,546,975 1,599,850

Represented by: Costofsales...... 897,130 1,207,003 1,239,480 Selling and distribution expenses ...... 228,655 240,140 256,204 Administrativeexpenses...... 87,441 99,832 104,166

1,213,226 1,546,975 1,599,850

7 EMPLOYEE BENEFIT EXPENSES (EXCLUDING DIRECTORS’ EMOLUMENTS)

2018 2019 2020 HK$’000 HK$’000 HK$’000

Wagesandsalaries...... 114,867 124,220 132,112 Contributiontopensionsplan...... 12,223 12,809 10,363 Otherstaffbenefits...... 2,389 2,397 3,990

129,479 139,426 146,465

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8 BENEFITS AND INTERESTS OF DIRECTORS

(a) The remuneration of the directors for the years ended 31 December 2018, 2019 and 2020 are as follows:

Discretionary Allowances Employer’s Fees Salaries bonuses and benefit contribution Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Year ended 31 December 2018 Ms.FongSoChing,Lucia..... — 1,383 346 426 223 2,378 Mr.FongChunMan...... — 1,383 346 2,044 247 4,020 Mr. Fong Chun Keung, Vincent . . — 1,394 797 39 — 2,230

— 4,160 1,489 2,509 470 8,628

Year ended 31 December 2019 Ms.FongSoChing,Lucia..... — 1,591 607 419 244 2,861 Mr.FongChunMan...... — 1,591 607 2,090 268 4,556 Mr. Fong Chun Keung, Vincent . . — 1,577 69 46 — 1,692

— 4,759 1,283 2,555 512 9,109

Year ended 31 December 2020 Ms.FongSoChing,Lucia..... — 1,861 146 495 250 2,752 Mr.FongChunMan...... — 1,861 146 2,135 274 4,416 Mr. Fong Chun Keung, Vincent . . — 1,838 169 78 — 2,085

— 5,560 461 2,708 524 9,253

The remuneration shown above represents remuneration received by the chief executive and the directors in their capacity as employees of the subsidiaries of the Group and no directors waived any emolument during the years ended 31 December 2018, 2019 and 2020.

(b) Directors’ retirement benefits

None of the directors received or will receive any retirement benefits during the years ended 31 December 2018, 2019 and 2020.

None of the directors received or will receive any termination benefits during the years ended 31 December 2018, 2019 and 2020.

(d) Consideration provided to third parties for making available directors’ services

During the years ended 31 December 2018, 2019 and 2020, the Group did not pay consideration to any third parties for making available directors’ services.

(e) Information about loans, quasi-loans and other dealings in favour of directors, controlled bodies corporate by and connected entities with such directors

During the years ended 31 December 2018, 2019 and 2020, there were no loans, quasi-loans and other dealing arrangements in favour of directors, or controlled bodies corporate by and connected entities with such directors.

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(f) Directors’ material interests in transactions, arrangements or contracts

Save as disclosed elsewhere in this combined financial statements, no significant transactions, arrangements andcontractsinrelationtotheGroup’s business to which the Group was a party and in which a director of the Group had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the years ended 31 December 2018, 2019 and 2020.

9 FIVE HIGHEST PAID INDIVIDUALS

The five individuals whose emoluments were the highest in the Group for the years ended 31 December 2018, 2019 and 2020 included 2 directors respectively, whose emoluments are reflected in the analysis shown in Note 8. Details of the emoluments of the remaining 3 highest paid non-director individuals during the Track Record Period are set out as below: Year ended 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Wagesandsalaries...... 5,464 5,707 5,207 Contributiontopensionplan...... 338 368 368

5,802 6,075 5,575

The number of highest paid individuals whose emoluments fell within the following bands: Year ended 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Emolument bands NiltoHK$500,000...... ——— HK$500,001–HK$1,000,000...... ——— HK$1,000,001–HK$1,500,000 ...... —— 1 HK$1,500,001–HK$2,000,000 ...... 2 2 1 HK$2,000,001–HK$2,500,000 ...... 1 1 1

333

10 OTHER INCOME AND OTHER GAINS/(LOSSES), NET

(a) Other income

Year ended 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Government grant (Note 1) ...... ——14,964 Government subsidies (Note 2) ...... 1,798 3,019 6,608 Compensationincome...... 7,440 5,669 — Electricityincome...... ——1,133 Others...... 1,424 961 1,033

10,662 9,649 23,738

Note 1:

Government grant represented the subsidies received from the Employment Support Scheme launched by the government of the Hong Kong Special Administrative Region. As at 31 December 2020, there were no unfulfilled conditions or other contingencies attached to this grant.

Note 2:

Government subsidies represented the tax support subsidies received by the PRC subsidiaries from local authorities.

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(b) Other gains/(losses), net

Year ended 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Exchangegains/(losses),net...... 4,886 (3,639) 5,351 (Losses)/gains on disposal of property, plant and equipment (Note 25(b)) ...... (195) 1 (863) Fair value gain on financial assets at fair value through profit or loss (Note 18) ...... ——12 Others...... — (349) 73

4,691 (3,987) 4,573

11 FINANCE INCOME, NET

Year ended 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Finance income: — Interestincomefromshorttermbankdeposits...... 2,258 3,616 4,707

Finance costs: — Interestexpensesonbankborrowings...... (310) (546) (189) — Interest elements on lease liabilities (Note 24(b)) .... (525) (1,330) (1,322)

(835) (1,876) (1,511)

Financeincome,net...... 1,423 1,740 3,196

12 INCOME TAX EXPENSE

Hong Kong profits tax has been provided for at the two tiered rate of 8.25% for the first HK$2 million of the estimated assessable profit for one of the Group’s Hong Kong subsidiaries and 16.5% on the estimated assessable profit of the remaining Hong Kong subsidiaries for the years ended 31 December 2019 and 2020. The Hong Kong subsidiaries are subject to tax rate of 16.5% for the year ended 31 December 2018. The Group’s subsidiaries in the PRC are subject to the China Corporate Income Tax (‘‘CIT’’) at a rate of 25% for the years ended 31 December 2018, 2019 and 2020.

The amount of taxation charged to profit or loss represents:

Year ended 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Current income tax: — HongKongprofitstax...... 16,743 20,871 16,522 — PRCcorporateincometax...... 13,956 40,485 50,503 Overprovisionsinprioryears...... (60) (60) (559) Deferred income tax (credited)/charged (Note 23) ...... (1,649) 1,395 (5,469)

Incometaxexpense...... 28,990 62,691 60,997

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The tax on the Group’s profit before income tax differs from the theoretical amount that would arise using the respective tax rates where the subsidiaries of the Group operate as follows:

Year ended 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Profitbeforeincometax...... 158,658 299,483 287,603

Tax calculated at the respective tax rates at corresponding placeofoperations...... 29,885 63,367 62,456 Effectoftwo-tiertaxation...... — (165) (165) Incomenotsubjecttotax...... (1,266) (671) (1,729) Expensesnotdeductiblefortaxpurpose...... 504 293 1,076 Overprovisionsinprioryears...... (60) (60) (559) Taxeffectofshareofprofitofanassociate...... (73) (73) (82)

28,990 62,691 60,997

13 EARNINGS PER SHARE

Earnings per share information is not presented as its inclusion, for the purpose of this report, is not considered meaningful due to the Reorganisation and the presentation oftheresultsfortheTrackRecordPeriodonacombinedbasis as disclosed in Note 1.3.

14 PROPERTY, PLANT AND EQUIPMENT

Furniture, Land and Leasehold fixtures and Motor building improvements equipment Vehicles Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 1 January 2018 Cost...... 62,443 15,752 115,135 22,502 215,832 Accumulated depreciation . . (15,337) (12,447) (63,796) (12,778) (104,358)

Net book amount ...... 47,106 3,305 51,339 9,724 111,474

Year ended 31 December 2018 Opening net book amount . . 47,106 3,305 51,339 9,724 111,474 Additions...... — 2,067 3,621 1,547 7,235 Depreciation (Note 6) ..... (1,643) (1,226) (11,020) (1,823) (15,712) Disposals (Note 25(b))..... — (78) (158) (68) (304) Currency translation differences...... — (27) (39) (2) (68)

Closing net book amount . . . 45,463 4,041 43,743 9,378 102,625

At 31 December 2018 Cost...... 62,443 17,698 116,655 23,348 220,144 Accumulated depreciation . . (16,980) (13,657) (72,912) (13,970) (117,519)

Net book amount ...... 45,463 4,041 43,743 9,378 102,625

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Furniture, Land and Leasehold fixtures and Motor building improvements equipment Vehicles Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Year ended 31 December 2019 Opening net book amount . . 45,463 4,041 43,743 9,378 102,625 Additions...... — 5,910 8,545 3,497 17,952 Depreciation (Note 6) ..... (1,643) (1,758) (11,232) (2,280) (16,913) Disposals (Note 25(b))..... — (12) (391) (460) (863) Currency translation differences...... — (15) (15) (29) (59)

Closing net book amount . . . 43,820 8,166 40,650 10,106 102,742

At 31 December 2019 Cost...... 62,443 21,468 121,575 25,087 230,573 Accumulated depreciation . . (18,623) (13,302) (80,925) (14,981) (127,831)

Net book amount ...... 43,820 8,166 40,650 10,106 102,742

Year ended 31 December 2020 Opening net book amount . . 43,820 8,166 40,650 10,106 102,742 Additions...... — 6,564 11,305 1,856 19,725 Depreciation (Note 6) ..... (1,643) (2,235) (11,406) (2,446) (17,730) Disposals (Note 25(b))..... — (224) (1,307) (137) (1,668) Currency translation differences...... — 168 106 100 374

Closing net book amount . . . 42,177 12,439 39,348 9,479 103,443

At 31 December 2020 Cost...... 62,443 26,924 128,632 25,718 243,717 Accumulated depreciation . . (20,266) (14,485) (89,284) (16,239) (140,274)

Net book amount ...... 42,177 12,439 39,348 9,479 103,443

During the years ended 31 December 2018, 2019 and 2020, depreciation expenses of approximately HK$15,712,000, HK$16,913,000 and HK$17,730,000, respectively, were charged to administrative expenses in the combined statements of comprehensive income.

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15 INVESTMENT IN AN ASSOCIATE

2018 2019 2020 HK$’000 HK$’000 HK$’000

Investmentinunlistedshares,atcost...... 1,250 1,250 1,541

Share of results: At1January...... 2,425 2,574 2,724 Profitfortheyear...... 440 441 529 Capitalinjections...... ——291 Dividenddeclared...... (291) (291) (379)

At31December...... 2,574 2,724 3,165

Investmentinanassociateat31December...... 2,574 2,724 3,165

Details of the associate as at 31 December 2018, 2019 and 2020 are as follows:

Particulars of Place of registered Particulars of Name incorporation Principal activities share capital additional paid-in capital Interest held 2018 2019 2020 2018 2019 2020

Telford Macau Macau Wholesale and distribution MOP50,000 MOP5,105,000 MOP5,105,000 MOP6,305,000 25% 25% 25% Limited of wine and spirits, beverage and beers

There are no contingent liabilities relating to the Group’s investment in an associate.

16 INVENTORIES

2018 2019 2020 HK$’000 HK$’000 HK$’000

Rawmaterials...... 3,534 4,370 4,130 Goods in transit ...... 55,107 68,964 75,846 Finished goods ...... 228,891 300,630 374,621

287,532 373,964 454,597

The cost of inventories sold recognised as expenses and included in cost of sales in the combined statements of comprehensive income for the years ended 31 December 2018, 2019 and 2020 has amounted to approximately HK$878,768,000, HK$1,189,555,000 and HK$1,221,014,000, respectively.

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17 TRADE AND OTHER RECEIVABLES

2018 2019 2020 HK$’000 HK$’000 HK$’000

Tradereceivables,net...... 227,782 285,302 201,474 Deposits...... 26,497 30,379 27,073 Prepayments...... 6,176 7,892 15,644 Dividend receivable from an associate (Note 15) ...... 291 291 379 Otherreceivables...... 9,795 7,607 13,599

270,541 331,471 258,169 Less:Non-currentportion...... (2,320) (4,692) (4,919)

268,221 326,779 253,250

The Group generally grants a credit period of 30 to 90 days to customers.

The Group applies HKFRS 9 simplified approach in measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. For details, please refer to Note 3.1(b).

The ageing analysis of the Group’s trade receivables, net based on invoice date are as follows:

2018 2019 2020 HK$’000 HK$’000 HK$’000

0–30days...... 80,022 114,590 79,217 31–60days...... 60,969 53,554 57,708 61–90days...... 45,945 62,913 38,663 Over90days...... 40,846 54,245 25,886

227,782 285,302 201,474

The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:

2018 2019 2020 HK$’000 HK$’000 HK$’000

HK$...... 194,277 228,964 166,788 US$...... 3,832 3,513 3,346 RMB...... 68,686 93,056 81,377 Euro (‘‘EUR’’)...... 1,327 1,060 1,113 Others...... 99 186 626

268,221 326,779 253,250

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. The Group does not hold any collateral as security.

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18 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

(i) Classification of financial assets at fair value through profit or loss

The Group classifies its structured deposits to be measured at fair value through profit or loss:

Year ended 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Current assets Structureddeposits...... — 11,144 59,438

(ii) Amounts recognised in profit or loss

During the years ended 31 December 2018, 2019 and 2020, the following gains were recognised in profit or loss:

Year ended 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Current assets Fair value gains on structured deposits at FVPL recognised in other gains/(losses), net (Note 10(b)) ...... ——12

(iii) Risk exposure and fair value measurements

For information about the methods and assumptions used in determining fair value, please refer to Note 3.3.

19 CASH, CASH EQUIVALENTS AND SHORT-TERM BANK DEPOSITS

2018 2019 2020 HK$’000 HK$’000 HK$’000

Cashatbanks...... 100,421 164,239 278,468 Cashonhand...... 159 186 243 Deposits with original maturities of less than 3 months . . 25,000 — 23,807

Cashandcashequivalents...... 125,580 164,425 302,518 Short-termbankdeposits...... 127,858 184,600 221,158

253,438 349,025 523,676

Maximumexposuretocreditrisk...... 253,279 348,839 523,433

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The carrying amounts of the Group’s cash, cash equivalents and short-term bank deposits are denominated in the following currencies:

2018 2019 2020 HK$’000 HK$’000 HK$’000

HK$...... 155,689 153,688 193,217 US$...... 51,434 65,228 28,313 RMB...... 44,799 129,795 274,202 EUR...... 1,394 94 5,572 Australian dollars (‘‘AUD’’)...... 39 39 13,056 Others...... 83 181 9,316

253,438 349,025 523,676

20 COMBINED CAPITAL

The Reorganisation set out in Note 1.2 has not been completed as at 31 December 2020. As mentioned in Note 1.2, the Historical Financial Information has been prepared as if the Group structure after the Reorganisation had been in existence throughout the years ended 31 December 2018, 2019 and 2020.

Combined capital as at 31 December 2018, 2019 and 2020 represented the combined share capital of the companies now comprising the Group. There were no movements in combined capital during the years ended 31 December 2018, 2019 and 2020.

21 TRADE AND OTHER PAYABLES AND CONTRACT LIABILITIES

2018 2019 2020 HK$’000 HK$’000 HK$’000

Tradepayables...... 102,727 146,967 187,864 Accruals — Advertisingexpenses...... 13,151 8,252 21,243 — Others...... 26,046 22,609 26,235 Advertisingfundfromsuppliers...... 6,206 11,600 12,640 Provisionforsalesrebates...... — 1,815 22,244 Warehouseservicecostspayable...... 12,407 9,111 9,118 Securitydepositsfromcustomers...... 5,779 9,214 15,909 Otherpayables...... 25,983 25,889 21,167

192,299 235,457 316,420

Contract liabilities ...... 2,873 4,407 2,053

195,172 239,864 318,473

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The carrying amounts of trade and other payables and contract liabilities are denominated in the following currencies:

2018 2019 2020 HK$’000 HK$’000 HK$’000

HK$...... 92,895 89,176 75,295 US$...... 18,767 10,128 10,321 RMB...... 66,612 55,768 97,040 EUR...... 5,463 60,183 77,961 AUD...... 1,565 18,208 27,118 Others...... 9,870 6,401 30,738

195,172 239,864 318,473

The ageing analysis of the Group’s trade payables based on invoice date are as follows:

2018 2019 2020 HK$’000 HK$’000 HK$’000

0to30days...... 65,318 104,440 91,891 31to60days...... 20,470 26,345 74,594 61to90days...... 6,596 14,545 14,102 Over90days...... 10,343 1,637 7,277

102,727 146,967 187,864

The following table shows how much of the revenue recognised during the years ended 31 December 2018, 2019 and 2020 relates to carried-forward contract liabilities.

2018 2019 2020 HK$’000 HK$’000 HK$’000

Revenue recognised that was included in the contract liabilities balance at beginning of the year — Sales of goods ...... 5,271 2,873 4,407

22 BANK BORROWINGS

2018 2019 2020 HK$’000 HK$’000 HK$’000

Current portion Bank borrowings — Unsecured...... 5,124 8,915 —

As at 31 December 2018, 2019 and 2020, the Group’s bank borrowings are repayable as follows:

2018 2019 2020 HK$’000 HK$’000 HK$’000

Within1year...... 5,124 8,915 —

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The effective interest rates (per annum) at 31 December 2018, 2019 and 2020 are as follows:

2018 2019 2020 HK$’000 HK$’000 HK$’000

Bank borrowings — Unsecured...... 4.2% 4.2% N/A

The carrying amounts of borrowings of the Group approximate their fair values as at 31 December 2018 and 2019 and are denominated in RMB.

As at 31 December 2018, 2019 and 2020, banking facilities made available to the Group were as follows:

2018 2019 2020 HK$’000 HK$’000 HK$’000

Available facilities: — Secured...... 110,000 110,000 110,000 — Unsecured...... 43,019 33,420 67,328

153,019 143,420 177,328

Facilities utilised by the Group: — Bank borrowings — Unsecured...... 5,124 8,915 —

As at 31 December 2018, 2019 and 2020, certain of the above banking facilities were secured by:

i. Retail shops held by a fellow subsidiary;

ii. Car park spaces held by a fellow subsidiary;

iii. An office premise held by a fellow subsidiary;

iv. An unlimited corporate guarantee provided by a fellow subsidiary; and

v. Joint personal guarantees provided by certain directors of the Company up to an aggregate amount of approximately HK$163,300,000.

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23 DEFERRED INCOME TAX

Deferred income tax is calculated in full on temporary differences under the liability method using a principal tax rate of 16.5% for the subsidiaries incorporated in Hong Kong and 25.0% for the subsidiaries incorporated in the PRC during the years ended 31 December 2018, 2019 and 2020. The net movement on the deferred income tax account is as follows:

2018 2019 2020 HK$’000 HK$’000 HK$’000

Atbeginningoftheyear...... (10,393) (8,782) (10,176) Charged/(credited) to the combined statements of comprehensiveincome...... 1,649 (1,395) 5,469 Currencytranslationdifferences...... (38) 1 278

Atendoftheyear...... (8,782) (10,176) (4,429)

(a) The movements in deferred income tax assets and liabilities during the year, without taking into consideration in the offsetting of balances with the same tax jurisdiction, are as follows:

Deferred income tax assets

Tax losses 2018 2019 2020 HK$’000 HK$’000 HK$’000

At1January...... 3,317 1,007 — Charged to the combined statements of comprehensiveincome...... (2,310) (1,007) —

At31December...... 1,007 ——

Provisions 2018 2019 2020 HK$’000 HK$’000 HK$’000

At1January...... 284 406 731 Credited to the combined statements of comprehensiveincome...... 144 340 5,071 Currencytranslationdifferences...... (22) (15) 339

At31December...... 406 731 6,141

Others 2018 2019 2020 HK$’000 HK$’000 HK$’000

At1January...... — 285 — Credited/(charged) to the combined statements of comprehensiveincome...... 301 (284) 112 Currencytranslationdifferences...... (16) (1) 6

At31December...... 285 — 118

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Deferred income tax liabilities

Accelerated tax depreciation 2018 2019 2020 HK$’000 HK$’000 HK$’000

At1January...... (11,449) (10,314) (10,377) Credited/(charged) to the combined statements of comprehensiveincome...... 1,135 (72) 453 Currencytranslationdifferences...... — 9(37)

At31December...... (10,314) (10,377) (9,961)

Leases 2018 2019 2020 HK$’000 HK$’000 HK$’000

At1January...... — (7) (307) Charged to the combined statements of comprehensiveincome...... (7) (306) (149) Currencytranslationdifferences...... — 6(29)

At31December...... (7) (307) (485)

Others 2018 2019 2020 HK$’000 HK$’000 HK$’000

At1January...... (2,545) (159) (223) Credited/(charged) to the combined statements of comprehensiveincome...... 2,386 (66) (18) Currencytranslationdifferences...... — 2(1)

At31December...... (159) (223) (242)

The Group takes into account the probability that deductible temporary differences or tax losses carried forward can be utilised against future taxable profits on recognition of deferred income tax assets. In assessing recoverability of deferred income tax assets, the Group takes into account scheduled reversal of deferred income tax liabilities, projected future taxable profit and tax planning.

As a result of the assessment of the recoverability of deferred income tax assets, the Group recognised all tax losses carried forward.

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(b) Unrecognised temporary differences

As at 31 December 2018, 2019 and 2020, the Group has undistributed earnings from its subsidiaries incorporated in the PRC of approximately HK$54,686,000, HK$176,109,000 and HK$306,738,000, respectively. Such undistributed earnings, if paid out as dividends, would be subject to tax in the hands of the recipient. An assessable temporary difference exists, but no deferred income tax liability has been recognised the Group is able to control the timing of distributions from these PRC subsidiaries and is not expected to distribute these profits in the foreseeable future.

As at 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Netdeferredincometaxassets...... 913 — 5,161 Net deferred income tax liabilities ...... (9,695) (10,176) (9,590)

(8,782) (10,176) (4,429)

24 LEASES

(a) Amounts recognised in the combined statements of financial position

The combined statements of financial position shows the following amounts relating to leases:

As at 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Right-of-use assets Officepremises...... 18,106 30,560 31,878 Warehouses...... 3,896 1,151 3,465

22,002 31,711 35,343

Lease liabilities Currentportion...... 12,768 13,204 14,768 Non-currentportion...... 9,260 19,935 21,733

22,028 33,139 36,501

Additions to right-of-use assets have amounted to approximately HK$25,182,000, HK$26,936,000 and HK$20,121,000 during the years ended 31 December 2018, 2019 and 2020, respectively.

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The carrying amounts of the Group’s lease liabilities are denominated in the following currencies:

2018 2019 2020 HK$’000 HK$’000 HK$’000

HK$...... 18,706 10,699 9,821 RMB...... 3,322 22,440 26,680

22,028 33,139 36,501

(b) Amounts recognised in the combined statements of comprehensive income

2018 2019 2020 HK$’000 HK$’000 HK$’000

Depreciation of right-of-use assets: Officepremises...... 8,317 13,976 15,017 Warehouses...... 1,593 2,744 2,564

9,910 16,720 17,581

Expenses relating to: Short-termleases...... 2,764 770 810 Imputed interest from lease liabilities ...... (525) (1,330) (1,322)

The total cash outflow for lease payments have amounted to approximately HK$10,633,000, HK$17,326,000 and HK$17,304,000 during the years ended 31 December 2018, 2019 and 2020, respectively.

The total cash outflow for short-term lease payments have amounted to approximately HK$2,764,000, HK$770,000 and HK$810,000 during the years ended 31 December 2018, 2019 and 2020, respectively.

The Group leases various offices premises and warehouses. Rental contracts are typically made for fixed periods ranging from 6 months to 5 years. The average incremental borrowing rate applied to the Group’slease liabilities at inception of leases was approximately 4.3%.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used by the Group as security for borrowing purposes.

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25 CASH FLOW INFORMATION

(a) Reconciliation of profit before income tax to cash generated from operating activities:

2018 2019 2020 HK$’000 HK$’000 HK$’000

Profitbeforeincometax...... 158,658 299,483 287,603

Adjustments for: — Depreciation of property, plant and equipment (Note 14) andintangibleassets...... 15,714 17,012 18,005 — Depreciation of right-of-use assets (Note 24(b)) ...... 9,910 16,720 17,581 — Net loss/(gain) on disposal of property, plant and equipment (Note 10(b)) ...... 195 (1) 863 — Finance income (Note 11) ...... (2,258) (3,616) (4,707) — Finance costs (Note 11)...... 835 1,876 1,511 — Share of profit of an associate (Note 15) ...... (440) (441) (529) — Inventory written-off...... 1,554 474 1,069 — Provision for impairment of trade receivables (Note 17) ...... 809 193 2,188 — Provision for impairment of inventories (Note 6) ..... 201 121 362

185,178 331,821 323,946 Changes in working capital: — Inventories...... (82,334) (87,892) (76,892) — Tradeandotherreceivables...... 1,288 (61,918) 74,132 — Tradeandotherpayables...... (18,622) 43,724 77,363 — Amounts due from fellow subsidiaries ...... (4,565) (129) (320) — Contract liabilities ...... 2,873 1,534 (2,354) — Amount due (from)/to an associate ...... (4,474) 786 583 — Amount due to/(from) a related company ...... 1,012 (53) (1,071)

Cashgeneratedfromoperatingactivities...... 80,356 227,873 395,387

(b) Proceeds from disposal of property, plant and equipment comprise:

2018 2019 2020 HK$’000 HK$’000 HK$’000

Net book amount (Note 14) ...... 304 863 1,668 Net (losses)/gains on disposal of property, plant and equipment (Note 10(b)) ...... (195) 1 (863)

Proceedsfromdisposalofproperty,plantandequipment.... 109 864 805

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Amount due (from)/to the ultimate Amount due Lease holding (from)/to liabilities Borrowings company directors Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 1 January 2018...... 6,956 833 (72,436) (3,000) (67,647) Cash flow — Payments of principal element of lease liabilities ...... (10,108) ———(10,108) — Payments of interest element of lease liabilities ...... (525) ———(525) — Repayment of bank borrowings . . . . — (833) ——(833) — Proceeds from new bank borrowings. — 5,124 ——5,124 — Repaymentfromdirectors...... ———38,546 38,546 — Repayment from the ultimate holding company...... ——6,000 — 6,000 Non-cash movements — Acquisition of leases ...... 25,182 ———25,182 — Interest on lease liabilities ...... 525 ———525 — Currency translation differences. . . . (2) ——— (2)

At 31 December 2018...... 22,028 5,124 (66,436) 35,546 (3,738)

At 1 January 2019...... 22,028 5,124 (66,436) 35,546 (3,738) Cash flow — Payments of principal element of lease liabilities ...... (15,996) ———(15,996) — Payments of interest element of lease liabilities ...... (1,330) ———(1,330) — Proceeds from new bank borrowings. — 3,791 ——3,791 — Advancestodirectors...... ———(3,600) (3,600) — Advances to the ultimate holding company...... ——(6,480) — (6,480) Non-cash movements — Acquisition of leases ...... 26,936 ———26,936 — Interest on lease liabilities ...... 1,330 ———1,330 — Currency translation differences. . . . 171 ———171

At 31 December 2019...... 33,139 8,915 (72,916) 31,946 1,084

At 1 January 2020...... 33,139 8,915 (72,916) 31,946 1,084 Cash flow — Payments of principal element of lease liabilities ...... (15,982) ———(15,982) — Payments of interest element of lease liabilities ...... (1,322) ———(1,322) — Repayment of bank borrowings . . . . — (8,915) ——(8,915) — Repaymentfromdirectors...... ———(5,086) (5,086) — Advances to the ultimate holding company...... ——(36,249) — (36,249) Non-cash movements — Acquisition of leases ...... 20,121 ———20,121 — Interest on lease liabilities ...... 1,322 ———1,322 — Dividends...... ——235,200 — 235,200 — Currency translation differences. . . . (777) ———(777)

At 31 December 2020...... 36,501 — 126,035 26,860 189,396

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(d) Non-cash investing activities

Non-cash investing activities include dividends declared or satisfied by the issue of shares under the dividend reinvestment plan for the investment in an associate.

26 DIVIDENDS

2018 2019 2020 HK$’000 HK$’000 HK$’000

Dividends...... 11,000 12,000 235,200

Dividends during each of the years ended 31 December 2018, 2019 and 2020 represented dividends declared by the companies now comprising the Group to the equity holders of the companies for each of the years ended 31 December 2018, 2019 and 2020, after elimination of intra-group dividends. The rates for dividends and the number of shares ranking for dividends are not presented as such information is not considered meaningful for the purpose of this report.

27 RELATED PARTY TRANSACTIONS AND BALANCES

Parties are considered to be related if one party has the ability, directly or indirectly, control the other party or exercise significant influence over the other party in making financial and operation decisions. Parties are also considered to be related if they are subject to common control. Members of key management of the Group and their close family members are also considered as related parties.

Major related parties that had transactions with the Group during the Track Record Period are as follows:

Relationship with the Group Related parties as at 31 December 2018, 2019 and 2020

Ms. Fong So Ching, Lucia Director and shareholder Mr. Fong Chun Man Director and shareholder Mr. Fong Chun Keung, Vincent Director and shareholder Mr. Fong Chin Yue Shareholder Ms. Fong So Kam, Emily Shareholder Eminent Leader Limited The ultimate holding company Ming Tai Wholesaling Company Limited A company controlled by the ultimate holding company Telford International Enterprise Limited A company controlled by the ultimate holding company Richmen Enterprises Limited A company controlled by the ultimate holding company Gritus Limited A company controlled by the ultimate holding company Allied Bottling Company Limited A company controlled by common directors of the Company

The following transactions were carried out between the Group and its related party during the Track Record Period. In the opinion of the directors of the Company, the related party transactions were carried out in the ordinary course of business, at terms negotiated and mutually agreed between the Group and the respective related parties.

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(a) Balances with the ultimate holdings company, fellow subsidiaries, associate, directors and related parties

At as 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Non-trade in nature: Amount due from the ultimate holding company — EminentLeaderLimited...... 66,436 72,916 —

Amount due from a fellow subsidiary — TelfordInternationalEnterpriseLimited..... 12,468 12,568 12,888

Amounts due from directors — FongChunMan...... — 8,000 36,000 — FongSoChing,Lucia...... — 8,000 15,300

— 16,000 51,300

Amount due to the ultimate holding company — Eminent Leader Limited (Note) ...... ——(126,035)

Amount due to a director — FongChunKeung,Vincent...... (35,546) (31,946) (26,860)

Amount due to a related company — Allied Bottling Company Limited...... (1,012) (1,012) —

Lease liabilities due to a fellow subsidiary — RichmenEnterpriseLimited...... (11,682) (7,270) (3,233)

Trade in nature: Amount due from an associate — TelfordMacauLimited...... 4,765 4,270 3,775

Amount due from a related company — GritusLimited...... — 53 112

Amount due to a fellow subsidiary — Ming Tai Wholesaling Company Limited . . . . (29) ——

Note:

As at 31 December 2020, amount due to the ultimate holding company represented the dividends declared by the companies now comprising the Group that remained unsettled as at year end.

As at 31 December 2018, 2019 and 2020, the amounts due from/to the ultimate holding company, fellow subsidiaries, associate and directors were unsecured, interest free and repayable on demand.

The carrying amounts of these balances approximate their fair values and are denominated in HK$.

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(b) Transactions with related parties

Year ended 31 December 2018 2019 2020 HK$’000 HK$’000 HK$’000

Sales to a related company — GritusLimited...... 42 394 443

Sales to a fellow subsidiary — Ming Tai Wholesaling Company Limited . . . . 30 27 2

Sales to an associate — TelfordMacauLimited...... 33,222 32,743 25,957

Dividend income from an associate — TelfordMacauLimited...... 291 291 379

Loan to directors — FongChunMan...... — (8,000) (36,000) — FongSoChing,Lucia...... — (8,000) (15,300)

Purchase of goods from a fellow subsidiary — Ming Tai Wholesaling Company Limited . . . . (224) (11) (71)

Rental expenses paid to a fellow subsidiary — RichmenEnterpriseLimited...... (4,732) (5,335) (5,241)

All transactions with the related parties were conducted based on terms negotiated and mutually agreed between the Group and the respective related parties.

28 FINANCIAL INSTRUMENTS BY CATEGORY

2018 2019 2020 HK$’000 HK$’000 HK$’000

Assets Financial assets at amortised costs Trade and other receivables (excluding prepayments) . . . 262,045 318,887 237,606 Amountduefromtheultimateholdingcompany...... 66,436 72,916 — Amountsduefromafellowsubsidiary...... 12,468 12,568 12,888 Amountsduefromdirectors...... — 16,000 51,300 Amountduefromanassociate...... 4,756 4,270 3,775 Amountduefromarelatedcompany...... — 53 112 Short-term deposits (Note 19)...... 127,858 184,600 221,158 Cash and cash equivalents (Note 19) ...... 125,580 164,425 302,518

599,143 773,719 829,357 Financial assets at fair value through profit or loss... — 11,144 59,438

599,143 784,863 888,795

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Financial liabilities at amortised cost 2018 2019 2020 HK$’000 HK$’000 HK$’000

Liabilities Tradeandotherpayables...... 192,299 235,457 316,420 Amount due to the ultimate holding company...... ——126,035 Amountduetoafellowsubsidiary...... 29 —— Amountduetoadirector...... 35,546 31,946 26,860 Amountduetoarelatedparty...... 1,012 1,012 — Lease liabilities (Note 24(a)) ...... 22,028 33,139 36,501 Bank borrowings (Note 22) ...... 5,124 8,915 —

256,038 310,469 505,816

29 CONTINGENT LIABILITIES

As at 31 December 2018, 2019 and 2020, the Group does not have any contingent liabilities.

30 SUBSEQUENT EVENT

On 11 June 2021, the Group acquired a trademark for some of its natural and functional beverages and another trademark for some of its other beverages from Telford International Enterprise Limited, a related company, at a consideration of HK$212,500,000 and HK$17,500,000, respectively.

Pursuant to the written resolutions passed by the sole Shareholder of the Company on 30 June 2020, the Company declared a conditional special interim dividend in the amount of HK$929,000,000. The special dividend is subject to and conditional upon the completion of the [REDACTED] on or before 30 June 2022.

Save as disclosed elsewhere in this report, there are no other material subsequent events undertaken by the Company or the subsidiaries of the Group after 31 December 2020.

III. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Company or any of the companies now comprising the Group in respect of any period subsequent to 31 December 2020 and up to the date of this report.

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The information set out in this Appendix II does not form part of the Accountant’sReportfrom PricewaterhouseCoopers, Certified Public Accountants, the reporting accountant of the Company, as set out in Appendix I to this document, and is included herein for illustrative purpose only. The unaudited pro forma financial information should be read in conjunction with the section entitled ‘‘Financial Information’’ in this document and the Accountant’s Report set out in Appendix I to this document.

A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS

The following unaudited pro forma statement of adjusted net tangible assets of the Group prepared in accordance with Rule 4.29 of the Listing Rules are set out below to illustrate the effect of the [REDACTED] on the net tangible assets of the Group attributable to the owners of the Company as at 31 December 2020 as if the [REDACTED] had taken place on 31 December 2020.

The unaudited pro forma adjusted net tangible assets has been prepared for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the combined net tangible assets of the Group as at 31 December 2020 or at any future dates following the [REDACTED].

Audited Unaudited combined net pro forma tangible assets of adjusted net the Group tangible assets attributable to attributable to owners of the Estimated net owners of the Unaudited pro Company as at Special interim [REDACTED] Company as at forma adjusted 31 December dividend from the 31 December net tangible 2020 declared [REDACTED] 2020 assets per Share HK$’000 HK$’000 HK$’000 HK$’000 HK$’ (Note 1) (Note 2) (Note 3) (Note 4)

Basedonan [REDACTED] of HK$[REDACTED] per Share ...... [976,205] [(929,000)] [REDACTED] [REDACTED] [REDACTED] Basedonan [REDACTED] of HK$[REDACTED] per Share ...... [976,205] [(929,000)] [REDACTED] [REDACTED] [REDACTED]

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Notes:

1. The audited combined net tangible assets attributable to owners of the Company as at 31 December 2020 is extracted from the Accountant’s Report set forth in Appendix I to this document, which is based on the audited combined net assets of the Group as at 31 December 2020 of approximately HK$[977,138,000] with an adjustment for the intangible assets of the Group as at 31 December 2020 of approximately HK$[933,000].

3. The estimated net [REDACTED] from the [REDACTED] are based on [REDACTED] Shares and the indicative [REDACTED] of HK$[REDACTED] per [REDACTED] and HK$[REDACTED] per [REDACTED], being the low end to high end of the indicative [REDACTED] range, respectively, after deduction of the [REDACTED] fees and other related expenses, excluding [REDACTED] expenses of approximately HK$[REDACTED] which has been accounted for in the combined statement of comprehensive income for the year ended 31 December 2020, and does not take account of any Shares which may be issued upon the exercise of the [REDACTED], or any Shares which may be issued upon exercise of any options which may be granted under the Share Option Scheme, or Shares which may be granted and issued or repurchased by the Company pursuant to the general mandate and the repurchase mandate.

5. No other adjustment has been made to the unaudited pro forma adjusted net tangible assets to reflect any trading results or other transactions of the Group entered into subsequent to 31 December 2020.

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[REDACTED]

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[REDACTED]

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[REDACTED]

– II-5 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

Set out below is a summary of certain provisions of the Memorandum and Articles of Association and of certain aspects of Cayman Islands company law.

Our Company was incorporated in the Cayman Islands as an exempted company with limited liability on March 30, 2021 under the Companies Act. Our Company’s constitutional documents consist of the Memorandum of Association and Articles of Association.

1. MEMORANDUM OF ASSOCIATION

(a) The Memorandum states, inter alia, that the liability of members of our Company is limited to the amount, if any, for the time being unpaid on the shares respectively held by them and that the objects for which our Company is established are unrestricted (including acting as an investment company), and that our Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit, as provided in section 27(2) of the Companies Act and in view of the fact that our Company is an exempted company that our Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of our Company carried on outside the Cayman Islands.

(b) Our Company may by special resolution alter the Memorandum with respect to any objects, powers or other matters specified therein.

2. ARTICLES OF ASSOCIATION

The Articles were conditionally adopted on [.], 2021 with effect from the [REDACTED]. The following is a summary of certain provisions of the Articles:

(a) Shares

(i) Classes of Shares

The share capital of our Company consists of ordinary shares.

(ii) Variation of Rights of Existing Shares or Classes of Shares

Subject to the Companies Act, if at any time the share capital of our Company is divided into different classes of shares, all or any of the special rights attached to the shares or any class of shares may (unless otherwise provided for by the terms of issue of that class) be varied, modified or abrogated either with the consent in writing of the holders of not less than three-fourths in nominal value of the issued shares of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. To every such separate general meeting the provisions of the Articles relating to general meetings will mutatis mutandis apply, but so that the necessary quorum (other than at an adjourned meeting) shall be two persons holding or representing by proxy not less than one-third in nominal value of the issued shares of that class and at any adjourned meeting two holders present in person or by proxy (whatever the number of shares held by them) shall be a quorum. Every holder of shares of the class shall be entitled to one vote for every such

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share held by him. Any special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to the terms of issue of such shares, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

(iii) Alteration of Capital

Our Company may by ordinary resolution of our members:

(i) increase our share capital by the creation of new shares;

(ii) consolidate all or any of our capital into shares of larger amount than our existing shares;

(iii) divide our shares into several classes and attach to such shares any preferential, deferred, qualified or special rights, privileges, conditions or restrictions as our Company in general meeting or as our Directors may determine;

(iv) subdivide our shares or any of them into shares of smaller amount than is fixed by the Memorandum; or

(v) cancel any shares which, at the date of passing of the resolution, have not been taken and diminish the amount of our capital by the amount of the shares so cancelled. Our Company may reduce our share capital or any capital redemption reserve or other undistributable reserve in any way by special resolution.

(iv) Transfer of Shares

All transfers of shares may be effected by an instrument of transfer in the usual or common form or in a form prescribed by the Stock Exchange or in such other form as our Board may approve and which may be under hand or, if the transferor or transferee is a clearing house or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as our Board may approve from time to time.

Notwithstanding the foregoing, for so long as any shares are listed on the Stock Exchange, titles to such listed shares may be evidenced and transferred in accordance with the laws applicable to and the rules and regulations of the Stock Exchange that are or shall be applicable to such listed shares. The register of members in respect of its listed shares (whether the principal register or a branch register) may be kept by recording the particulars required by Section 40 of the Companies Act in a form otherwise than legible if such recording otherwise complies with the laws applicable to and the rules and regulations of the Stock Exchange that are or shall be applicable to such listed shares.

The instrument of transfer shall be executed by or on behalf of the transferor and the transferee provided that our Board may dispense with the execution of the instrument of transfer by the transferee. The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register of members in respect of that share.

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Our Board may, in its absolute discretion, at any time transfer any share upon the principal register to any branch register or anyshareonanybranchregistertotheprincipal register or any other branch register.

Our Board may decline to recognize any instrument of transfer unless a fee (not exceeding the maximum sum as the Stock Exchange may determine to be payable) determined by our Directors is paid to our Company, the instrument of transfer is properly stamped (if applicable), it is in respect of only one class of share and is lodged at the relevant registration office or registered office or such other place at which the principal register is kept accompanied by the relevant share certificate(s) and such other evidence as our Board may reasonably require to show the right of the transferor to make the transfer (and if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do).

The registration of transfers may be suspended and the register closed on giving notice by advertisement in any newspaper or by any other means in accordance with the requirements of the Stock Exchange, at such times and for such periods as our Board may determine. The register of members must not be closed for periods exceeding in the whole 30 days in any year.

Subject to the above, fully paid shares are free from any restriction on transfer and free of all liens in favor of our Company.

(v) Power of our Company to Purchase our Own Shares

Our Company is empowered by the Companies Act and the Articles to purchase our own shares subject to certain restrictions and our Board may only exercise this power on behalf of our Company subject to any applicable requirements imposed from time to time by the Stock Exchange.

Where our Company purchases for redemption a redeemable share, purchases not made through the market or by tender must be limited to a maximum price determined by our Company in general meeting. If purchases are by tender, tenders must be made available to all members alike.

Our Board may accept the surrender for no consideration of any fully paid share.

(vi) Power of Any Subsidiary of our Company to Own Shares in our Company

There are no provisions in the Articles relating to ownership of shares in our Company by a subsidiary.

(vii) Calls on Shares and Forfeiture of Shares

Our Board may from time to time make such calls upon the members in respect of any monies unpaid on the shares held by them respectively (whether on account of the nominal value of the shares or by way of premium). A call may be made payable either in one lump

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sum or by installments. If the sum payable in respect of any call or instalment is not paid on or before the day appointed for payment thereof, the person or persons from whom the sum is due shall pay interest on the same at such rate not exceeding 20% per annum as our Board may agree to accept from the day appointed for the payment thereof to the time of actual payment, but our Board may waive payment of such interest wholly or in part. Our Board may, if it thinks fit, receive from any member willing to advance the same, either in money or money’s worth, all or any part of the monies uncalled and unpaid or installments payable upon any shares held by him, and upon all or any of the monies so advanced our Company may pay interest at such rate (if any) as our Board may decide.

If a member fails to pay any call on the day appointed for payment thereof, our Board may serve not less than 14 clear days’ notice on him requiring payment of so much of the call as is unpaid, together with any interest which may have accrued and which may still accrue up to the date of actual payment and stating that, in the event of non-payment at or before the time appointed, the shares in respect of which the call was made will be liable to be forfeited.

If the requirements of any such notice are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of our Board to that effect. Such forfeiture will include all dividends and bonuses declared in respect of the forfeited share and not actually paid before the forfeiture.

A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares but shall, notwithstanding, remain liable to pay to our Company all monies which, at the date of forfeiture, were payable by him to our Company in respect of the shares, together with (if our Board shall in its discretion so require) interest thereon from the date of forfeiture until the date of actual payment at such rate not exceeding 20% per annum as our Board determines.

(b) Directors

(i) Appointment, Retirement and Removal

At each annual general meeting, one third of our Directors for the time being (or if their number is not a multiple of three, then the number nearest to but not less than one third) shall retire from office by rotation provided that every Director shall be subject to retirement at an annual general meeting at least once every three years. Our Directors to retire by rotation shall include any Director who wishes to retire and not offer himself for re-election. Any further Directors so to retire shall be those who have been longest in office since their last re- election or appointment but as between persons who became or were last re-elected Directors on the same day those to retire will (unless they otherwise agree among themselves) be determined by lot.

Neither a Director nor an alternate Director is required to hold any shares in our Company by way of qualification. Further, there are no provisions in the Articles relating to retirement of Directors upon reaching any age limit.

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Our Directors have the power to appoint any person as a Director either to fill a casual vacancy on our Board or as an addition to the existing board. Any Director appointed to fill a casual vacancy shall hold office until the first general meeting of members after his appointment and be subject to re-election at such meeting and any Director appointed as an addition to the existing board shall hold office only until the next following annual general meeting of our Company and shall then be eligible for re-election.

ADirectormayberemovedbyanordinaryresolutionofourCompanybeforethe expiration of his period of office (but without prejudice to any claim which such Director may have for damages for any breach of any contract between him and our Company) and members of our Company may by ordinary resolution appoint another in his place. Unless otherwise determined by our Company in general meeting, the number of Directors shall not be less than two. There is no maximum number of Directors.

The office of Director shall be vacated if:

(aa) he resigns by notice in writing delivered to our Company;

(bb) he becomes of unsound mind or dies;

(cc) without special leave, he is absent from meetings of our Board for six consecutive months, and our Board resolves that his office is vacated;

(dd) he becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors;

(ee) he is prohibited from being a Director by law; or

(ff) he ceases to be a Director by virtue of any provision of law or is removed from office pursuant to the Articles.

Our Board may appoint one or more of its body to be managing director, joint managing director, or deputy managing director or to hold any other employment or executive office with our Company for such period and upon such terms as our Board may determine and our Board may revoke or terminate any of such appointments. Our Board may delegate any of its powers, authorities and discretions to committees consisting of such Director or Directors and other persons as our Board thinks fit, and it may from time to time revoke such delegation or revoke the appointment of and discharge any such committees either wholly or in part, and either as to persons or purposes, but every committee so formed must, in the exercise of the powers, authorities and discretions so delegated, conform to any regulations that may from time to time be imposed upon it by our Board.

(ii) Power to Allot and Issue Shares and Warrants

Subject to the provisions of the Companies Act and the Memorandum and Articles and to any special rights conferred on the holders of any shares or class of shares, any share may be issued (a) with or have attached thereto such rights, or such restrictions, whether with

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regard to dividend, voting, return of capital, or otherwise, as our Directors may determine, or (b) on terms that, at the option of our Company or the holder thereof, it is liable to be redeemed.

Our Board may issue warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for any class of shares or securities in the capital of our Company on such terms as it may determine.

Subject to the provisions of the Companies Act and the Articles and, where applicable, the rules of the Stock Exchange and without prejudice to any special rights or restrictions for the time being attached to any shares or any class of shares, all unissued shares in our Company are at the disposal of our Board, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times, for such consideration and on such terms and conditions as it in its absolute discretion thinks fit, but so that no shares shall be issued at a discount to their nominal value.

Neither our Company nor our Board is obliged, when making or granting any allotment of, offer of, option over or disposal of shares, to make, or make available, any such allotment, offer, option or shares to members or others with registered addresses in any particular territory or territories being a territory or territories where, in the absence of a registration statement or other special formalities, this would or might, in the opinion of our Board, be unlawful or impracticable. Members affected as a result of the foregoing sentence shall not be, or be deemed to be, a separate class of members for any purpose whatsoever.

(iii) Power to Dispose of the Assets of our Company or any of our Subsidiaries

There are no specific provisions in the Articles relating to the disposal of the assets of our Company or any of our subsidiaries. Our Directors may, however, exercise all powers and do all acts and things which may be exercised or done or approved by our Company and which are not required by the Articles or the Companies Act to be exercised or done by our Company in general meeting.

(iv) Borrowing Powers

Our Board may exercise all the powers of our Company to raise or borrow money, to mortgage or charge all or any part of the undertaking, property and assets and uncalled capital of our Company and, subject to the Companies Act, to issue debentures, bonds and other securities of our Company, whether outright or as collateral security for any debt, liability or obligation of our Company or of any third party.

(v) Remuneration

The ordinary remuneration of our Directors is to be determined by our Company in general meeting, such sum (unless otherwise directed by the resolution by which it is voted) to be divided amongst our Directors in such proportions and in such manner as our Board may agree or, failing agreement, equally, except that any Director holding office for part only of the period in respect of which the remunerationispayableshallonlyrankinsuchdivision

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in proportion to the time during such period for which he held office. Our Directors are also entitled to be prepaid or repaid all travelling, hotel and incidental expenses reasonably expected to be incurred or incurred by them in attending any board meetings, committee meetings or general meetings or separate meetings of any class of shares or of debentures of our Company or otherwise in connection with the discharge of their duties as Directors.

Any Director who, by request, goes or resides abroad for any purpose of our Company or who performs services which in the opinion of our Board go beyond the ordinary duties of a Director may be paid such extra remuneration as our Board may determine and such extra remunerationshallbeinadditiontoorinsubstitutionforanyordinaryremunerationasa Director. An executive Director appointed to be a managing director, joint managing director, deputy managing director or other executive officer shall receive such remuneration and such other benefits and allowances as our Board may from time to time decide. Such remuneration may be either in addition to or in lieu of his remuneration as a Director.

Our Board may establish or concur or join with other companies (being subsidiary companies of our Company or companies with which it is associated in business) in establishing and making contributions out of our Company’s monies to any schemes or funds for providing pensions, sickness or compassionate allowances, life assurance or other benefits for employees (which expression as used in this and the following paragraph shall include any Director or past Director who may hold or have held any executive office or any office of profit with our Company or any of our subsidiaries) and ex-employees of our Company and their dependents or any class or classes of such persons.

Our Board may pay, enter into agreements to pay or make grants of revocable or irrevocable, and either subject or not subject to any terms or conditions, pensions or other benefits to employees and ex-employees and their dependents, or to any of such persons, including pensions or benefits additional to those, if any, to which such employees or ex- employees or their dependents are or may become entitled under any such scheme or fund as is mentioned in the previous paragraph. Any such pension or benefit may, as our Board considers desirable, be granted to an employee either before and in anticipation of, or upon or at any time after, his actual retirement.

Our Board may resolve to capitalize all or any part of any amount for the time being standing to the credit of any reserve or fund (including a share premium account and the profit and loss account) whether or not the same is available for distribution by applying such sum in paying up unissued shares to be allotted to (i) employees (including Directors) of our Company and/or our affiliates (meaning any individual, corporation, partnership, association, joint-stock company, trust, unincorporated association or other entity (other than our Company) that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, our Company) upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the members in general meeting, or (ii) any trustee of any trust to whom shares are to be allotted

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and issued by our Company in connection with the operation of any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the members in general meeting.

(vi) Compensation or Payments for Loss of Office

Pursuant to the Articles, payments to any Director or past Director of any sum by way of compensation for loss of office or as consideration for or in connection with his retirement from office (not being a payment to which our Director is contractually entitled) must be approved by our Company in general meeting.

(vii) Loans and Provision of Security for Loans to Directors

Our Company must not make any loan, directly or indirectly, to a Director or his close associate(s) if and to the extent it would be prohibited by the Companies Ordinance as if our Company were a company incorporated in Hong Kong.

(viii) Disclosure of Interests in Contracts with our Company or any of our Subsidiaries

A Director may hold any other office or place of profit with our Company (except that of the auditor of our Company) in conjunction with his office of Director for such period and upon such terms as our Board may determine, and may be paid such extra remuneration therefor in addition to any remuneration provided for by or pursuant to the Articles. A Director may be or become a director or other officer of, or otherwise interested in, any company promoted by our Company or any other company in which our Company may be interested, and shall not be liable to account to our Company or the members for any remuneration, profits or other benefits received by him as a director, officer or member of, or from his interest in, such other company. Our Board may also cause the voting power conferred by the shares in any other company held or owned by our Company to be exercised in such manner in all respects as it thinks fit, including the exercise thereof in favor of any resolution appointing our Directors or any of them to be directors or officers of such other company, or voting or providing for the payment of remuneration to the directors or officers of such other company.

No Director or proposed or intended Director shall be disqualified by his office from contracting with our Company, either with regard to his tenure of any office or place of profit or as vendor, purchaser or in any other manner whatsoever, nor shall any such contract or any other contract or arrangement in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to our Company or the members for any remuneration, profit or other benefits realized by any such contract or arrangement by reason of such Director holding that office or the fiduciary relationship thereby established. A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with our Company must declare the nature of his interest at the meeting of our Board at which the question of entering into the contract or arrangement is first taken into consideration, if he knows his interest then exists, or in any other case, at the first meeting of our Board after he knows that he is or has become so interested.

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A Director shall not vote (nor be counted in the quorum) on any resolution of our Board approving any contract or arrangement or other proposal in which he or any of his close associates is materially interested, but this prohibition does not apply to any of the following matters, namely:

(aa) any contract or arrangement for giving to such Director or his close associate(s) any security or indemnity in respect of money lent by him or any of his close associates or obligations incurred or undertaken by him or any of his close associates at the request of or for the benefit of our Company or any of our subsidiaries;

(bb) any contract or arrangement for the giving of any security or indemnity to a third party in respect of a debt or obligation of our Company or any of our subsidiaries for which our Director or his close associate(s) has himself/themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;

(cc) any contract or arrangement concerning an offer of shares or debentures or other securities of or by our Company or any other company which our Company may promote or be interested in for subscription or purchase, where our Director or his close associate(s) is/are or is/are to be interested as a participant in the underwriting or sub-underwriting of the offer;

(dd) any contract or arrangement in which our Director or his close associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of our Company by virtue only of his/their interest in shares or debentures or other securities of our Company; or

(ee) any proposal or arrangement concerning the adoption, modification or operation of a share option scheme, a pension fund or retirement, death, or disability benefits scheme or other arrangement which relates both to Directors, his close associates and employees of our Company or of any of our subsidiaries and does not provide in respect of any Director, or his close associate(s), as such any privilege or advantage not accorded generally to the class of persons to which such scheme or fund relates.

Our Board may meet for the dispatch of business, adjourn and otherwise regulate its meetings as it considers appropriate. Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes, the chairman of the meeting shall have an additional or casting vote.

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(d) Alterations to Constitutional Documents and our Company’sName

The Articles may be rescinded, altered or amended by our Company in general meeting by special resolution. The Articles state that a special resolution shall be required to alter the provisions of the Memorandum, to amend the Articles or to change the name of our Company.

(e) Meetings of Members

(i) Special and Ordinary Resolutions

A special resolution of our Company must be passed by a majority of not less than three-fourths of the votes cast by such members as, being entitled so to do, vote in person or, in the case of such members as are corporations, by their duly authorized representatives or, where proxies are allowed, by proxy at a general meeting of which notice has been duly given in accordance with the Articles.

Under the Companies Act, a copy of any special resolution must be forwarded to the Registrar of Companies in the Cayman Islands within 15 days of being passed.

An ordinary resolution is defined in the Articles to mean a resolution passed by a simple majority of the votes of such members of our Company as, being entitled to do so, vote in person or, in the case of corporations, by their duly authorized representatives or, where proxies are allowed, by proxy at a general meeting of which notice has been duly given in accordance with the Articles.

(ii) Voting Rights and Right to Demand a Poll

Subject to any special rights or restrictions as to voting for the time being attached to any shares, at any general meeting on a poll every member present in person or by proxy or, in the case of a member being a corporation, by its duly authorized representative shall have one vote for every fully paid share of which he is the holder but so that no amount paid up or credited as paid up on a share in advance of calls or installments is treated for the foregoing purposes as paid up on the share. A member entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.

At any general meeting a resolution put to the vote of the meeting is to be decided by way of a poll save that the chairman of the meeting may in good faith, allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands in which case every member present in person (or being a corporation, is present by a duly authorized representative), or by proxy(ies) shall have one vote provided that where more than one proxy is appointed by a member which is a clearing house (or its nominee(s)), each such proxy shall have one vote on a show of hands.

If a recognized clearing house (or its nominee(s)) is a member of our Company it may authorize such person or persons as it thinks fit to act as its representative(s) at any meeting of our Company or at any meeting of any class of members of our Company provided that, if more than one person is so authorized, the authorization shall specify the number and class of

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shares in respect of which each such person is so authorized. A person authorized pursuant to this provision shall be deemed to have been duly authorized without further evidence of the facts and be entitled to exercise the same powers on behalf of the recognized clearing house (or its nominee(s)) as if such person was the registered holder of the shares of our Company held by that clearing house (or its nominee(s)) including, where a show of hands is allowed, the right to vote individually on a show of hands.

Where our Company has any knowledge that any shareholder is, under the rules of the Stock Exchange, required to abstain from voting on any particular resolution of our Company or restricted to voting only for or only against any particular resolution of our Company, any votes cast by or on behalf of such shareholder in contravention of such requirement or restriction shall not be counted.

(iii) Annual General Meetings and Extraordinary General Meetings

Our Company must hold an annual general meeting of our Company every year within a period of not more than 15 months after the holding of the last preceding annual general meeting or a period of not more than 18 months from the date of adoption of the Articles, unless a longer period would not infringe the rules of the Stock Exchange.

Extraordinary general meetings may be convened on the requisition of one or more shareholders holding, at the date of deposit of the requisition, not less than one-tenth of the paid up capital of our Company having the right of voting at general meetings. Such requisition shall be made in writing to our Board or the secretary for the purpose of requiring an extraordinary general meeting to be called by our Board for the transaction of any business specified in such requisition. Such meeting shall be held within two months after the deposit of such requisition. If within 21 days of such deposit, our Board fails to proceed to convene such meeting, the requisitionist(s) himself/herself (themselves) may do so in the same manner, and all reasonable expenses incurred by the requisitionist(s) as a result of the failure of our Board shall be reimbursed to the requisitionist(s) by our Company.

(iv) Notices of Meetings and Business to be Conducted

An annual general meeting must be called by notice of not less than 21 clear days and not less than 20 clear business days. All other general meetings must be called by notice of at least 14 clear days and not less than ten clear business days. The notice is exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and must specify the time and place of the meeting and particulars of resolutions to be considered at the meeting and, in the case of special business, the general nature of that business.

In addition, notice of every general meeting must be given to all members of our Company other than to such members as, under the provisions of the Articles or the terms of issue of the shares they hold, are not entitled to receive such notices from our Company, and also to, among others, the auditors for the time being of our Company.

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Any notice to be given to or by any person pursuant to the Articles may be served on or delivered to any member of our Company personally, by post to such member’s registered address or by advertisement in newspapers in accordance with the requirements of the Stock Exchange. Subject to compliance with Cayman Islands law and the rules of the Stock Exchange, notice may also be served or delivered by our Company to any member by electronic means.

All business that is transacted at an extraordinary general meeting and at an annual general meeting is deemed special, save that in the case of an annual general meeting, each of the following business is deemed an ordinary business:

(aa) the declaration and sanctioning of dividends;

(bb) the consideration and adoption of the accounts and balance sheet and the reports of our Directors and the auditors;

(cc) the election of Directors in place of those retiring;

(dd) the appointment of auditors and other officers; and

(ee) the fixing of the remuneration of our Directors and of the auditors.

(v) Quorum for Meetings and Separate Class Meetings

No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business, but the absence of a quorum shall not preclude the appointment of a chairman.

The quorum for a general meeting shall be two members present in person (or, in the case of a member being a corporation, by its duly authorized representative) or by proxy and entitled to vote. In respect of a separate class meeting (other than an adjourned meeting) convened to sanction the modification of class rights the necessary quorum shall be two persons holding or representing by proxy not less than one-third in nominal value of the issued shares of that class.

(vi) Proxies

Any member of our Company entitled to attend and vote at a meeting of our Company is entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of our Company or at a class meeting. A proxy need not be a member of our Company and is entitled to exercise the same powers on behalf of a member who is an individual and for whom he acts as proxy as such member could exercise. In addition, a proxy is entitled to exercise the same powers on behalf of a member which is a corporation and for which he acts as proxy as such member could exercise as if it were an individual member. Votes may be given either personally (or, in the case of a member being a corporation, by its duly authorized representative) or by proxy.

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(f) Accounts and Audit

Our Board shall cause true accounts to be kept of the sums of money received and expended by our Company, and the matters in respect of which such receipt and expenditure take place, and of the property, assets, credits and liabilities of our Company and of all other matters required by the Companies Act or necessary to give a true and fair view of our Company’s affairs and to explain its transactions.

The accounting records must be kept at the registered office or at such other place or places as our Board decides and shall always be open to inspection by any Director. No member (other than a Director) shall have any right to inspect any accounting record or book or document of our Company except as conferred by law or authorized by our Board or our Company in general meeting. However, an exempted company must make available at its registered office in electronic form or any other medium, copies of its books of account or parts thereof as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Act of the Cayman Islands.

A copy of every balance sheet and profit and loss account (including every document required by law to be annexed thereto) which is to be laid before our Company at our general meeting, together with a printed copy of our Directors’ report and a copy of the auditors’ report, shall not less than 21 days before the date of the meeting and at the same time as the notice of annual general meeting be sent to every person entitled to receive notices of general meetings of our Company under the provisions of the Articles; however, subject to compliance with all applicable laws, including the rules of the Stock Exchange, our Company may send to such persons summarized financial statements derived from our Company’s annual accounts and our Directors’ report instead provided that any such person may by notice in writing served on our Company, demand that our Company sends to him, in addition to summarized financial statements, a complete printed copy of our Company’s annual financial statement and our Directors’ report thereon.

At the annual general meeting or at a subsequent extraordinary general meeting in each year, the members shall appoint an auditor to audit the accounts of our Company and such auditor shall hold office until the next annual general meeting. Moreover, the members may, at any general meeting, by special resolution remove the auditor at any time before the expiration of his terms of office and shall by ordinary resolution at that meeting appoint another auditor for the remainder of his term. The remuneration of the auditors shall be fixed by our Company in general meeting or in such manner as the members may determine.

The financial statements of our Company shall be audited by the auditor in accordance with generally accepted auditing standards which may be those of a country or jurisdiction other than the Cayman Islands. The auditor shall make a written report thereon in accordance with generally accepted auditing standards and the report of the auditor must be submitted to the members in general meeting.

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(g) Dividends and Other Methods of Distribution

Our Company in general meeting may declare dividends in any currency to be paid to the members but no dividend shall be declared in excess of the amount recommended by our Board.

The Articles provide dividends may be declared and paid out of the profits of our Company, realized or unrealized, or from any reserve set aside from profits which our Directors determine is no longer needed. With the sanction of an ordinary resolution dividends may also be declared and paid out of share premium account or any other fund or account which can be authorized for this purpose in accordance with the Companies Act.

Except in so far as the rights attaching to, or the terms of issue of, any share may otherwise provide, (i) all dividends shall be declared and paid according to the amounts paid up on the shares in respect whereof the dividend is paid but no amount paid up on a share in advance of calls shall for this purpose be treated as paid up on the share and (ii) all dividends shall be apportioned and paid pro rata according to the amount paid up on the shares during any portion or portions of the period in respect of which the dividend is paid. Our Directors may deduct from any dividend or other monies payable to any member or in respect of any shares all sums of money (if any) presently payable by him to our Company on account of calls or otherwise.

Whenever our Board or our Company in general meeting has resolved that a dividend be paid or declared on the share capital of our Company, our Board may further resolve either (a) that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up, provided that the shareholders entitled thereto will be entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment, or (b) that shareholders entitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as our Board may think fit.

Our Company may also upon the recommendation of our Board by an ordinary resolution resolve in respect of any one particular dividend of our Company that it may be satisfied wholly in the form of an allotment of shares credited as fully paid up without offering any right to shareholders to elect to receive such dividend in cash in lieu of such allotment.

Any dividend, interest or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post addressed to the holder at his registered address, or in the case of joint holders, addressed to the holder whose name stands first in the register of our Company in respect of the shares at his address as appearing in the register or addressed to such person and at such addresses as the holder or joint holders may in writing direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the register in respect of such shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to our Company. Any one of two or more joint holders may give effectual receipts for any dividends or other moneys payable or property distributable in respect of the shares held by such joint holders.

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Whenever our Board or our Company in general meeting has resolved that a dividend be paid or declared our Board may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind.

All dividends or bonuses unclaimed for one year after having been declared may be invested or otherwise made use of by our Board for the benefit of our Company until claimed and our Company shall not be constituted a trustee in respect thereof. All dividends or bonuses unclaimed for six years after having been declared may be forfeited by our Board and shall revert to our Company.

No dividend or other monies payable by our Company on or in respect of any share shall bear interest against our Company.

(h) Inspection of Corporate Records

Pursuant to the Articles, the register and branch register of members shall be open to inspection for at least two hours during business hours by members without charge, or by any other person upon a maximum payment of HK$2.50 or such lesser sum specified by our Board, at the registered office or such other place at which the register is kept in accordance with the Companies Act or, upon a maximum payment of HK$1.00 or such lesser sum specified by our Board, at the office where the branch register of members is kept, unless the register is closed in accordance with the Articles.

(i) Rights of Minorities in Relation to Fraud or Oppression

There are no provisions in the Articles relating to rights of minority shareholders in relation to fraud or oppression. However, certain remedies are available to shareholders of our Company under Cayman Islands law, as summarized in paragraph 3(f) of this Appendix III.

(j) Procedures on Liquidation

A resolution that our Company be wound up by the court or be wound up voluntarily shall be a special resolution.

Subject to any special rights, privileges or restrictions as to the distribution of available surplus assets on liquidation for the time being attached to any class or classes of shares:

(i) if our Company is wound up and the assets available for distribution amongst the members of our Company shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed pari passu amongst such members in proportion to the amount paid up on the shares held by them respectively; and

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(ii) if our Company is wound up and the assets available for distribution amongst the members as such shall be insufficient to repay the whole of the paid-up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up on the shares held by them respectively.

If our Company is wound up (whether the liquidation is voluntary or by the court) the liquidator may, with the authority of a special resolution and any other sanction required by the Companies Act divide among the members in specie or kind the whole or any part of the assets of our Company whether the assets shall consist of property of one kind or shall consist of properties of different kinds and the liquidator may, for such purpose, set such value as he deems fair upon any one or more class or classes of property to be divided as aforesaid and may determine how such division shall be carried out as between the members or different classes of members. The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator, with the like authority, shall think fit, but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability.

(k) Subscription Rights Reserve

The Articles provide that to the extent that it is not prohibited by and is in compliance with the Companies Act, if warrants to subscribe for shares have been issued by our Company and our Company does any act or engages in any transaction which would result in the subscription price of such warrants being reduced below the par value of a share, a subscription rights reserve shall be established and applied in paying up the difference between the subscription price and the par value of a share on any exercise of the warrants.

3. CAYMAN ISLANDS COMPANY LAW

Our Company is incorporated in the Cayman Islands subject to the Companies Act and, therefore, operates subject to Cayman Islands law. Set out below is a summary of certain provisions of Cayman Islands company law, although this does not purport to contain all applicable qualifications and exceptions or to be a complete review of all matters of Cayman Islands company law and taxation, which may differ from equivalent provisions in jurisdictions with which interested parties may be more familiar:

(a) Company Operations

As an exempted company, our Company’s operations must be conducted mainly outside the Cayman Islands. Our Company is required to file an annual return each year with the Registrar of Companies of the Cayman Islands and pay a fee which is based on the amount of our authorized share capital.

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(b) Share Capital

The Companies Act provides that where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the value of the premiums on those shares shall be transferred to an account, to be called the ‘‘share premium account.’’ At the option of a company, these provisions may not apply to premiums on shares of that company allotted pursuant to any arrangement in consideration of the acquisition or cancellation of shares in any other company and issued at a premium.

The Companies Act provides that the share premium account may be applied by the company subject to the provisions, if any, of its memorandum and articles of association in (a) paying distributions or dividends to members; (b) paying up unissued shares of the company to be issued to members as fully paid bonus shares; (c) the redemption and repurchase of shares (subject to the provisions of section 37 of the Companies Act); (d) writing-off the preliminary expenses of the company; and (e) writing-off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company.

No distribution or dividend may be paid to members out of the share premium account unless immediately following the date on which the distribution or dividend is proposed to be paid, the company will be able to pay its debts as they fall due in the ordinary course of business.

The Companies Act provides that, subject to confirmation by the Grand Court of the Cayman Islands (the ‘‘Court’’), a company limited by shares or a company limited by guarantee and having a share capital may, if so authorized by its articles of association, by special resolution reduce its share capital in any way.

There is no statutory restriction in the Cayman Islands on the provision of financial assistance by a company to another person for the purchase of, or subscription for, its own or its holding company’s shares. Accordingly, a company may provide financial assistance if the directors of the company consider, in dischargingtheirdutiesofcareandactingingoodfaith,for a proper purpose and in the interests of the company, that such assistance can properly be given. Such assistance should be on an arm’s-length basis.

(d) Purchase of Shares and Warrants by a Company and its Subsidiaries

A company limited by shares or a company limited by guarantee and having a share capital may, if so authorized by its articles of association, issue shares which are to be redeemed or are liable to be redeemed at the option of the company or a shareholder and the Companies Act expressly provides that it shall be lawful for the rights attaching to any shares to be varied, subject to the provisions of the company’s articles of association, so as to provide that such shares are to be or are liable to be so redeemed. In addition, such a company may, if authorized to do so by its articles of association, purchase its own shares, including any redeemable shares. However, if the articles of association do not authorize the manner and terms of purchase, a company cannot purchase any of its own shares unless the manner and terms of purchase have first been authorized by an ordinary resolution of the company. At no time may a company redeem or purchase its

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shares unless they are fully paid. A company may not redeem or purchase any of its shares if, as a result of the redemption or purchase, there would no longer be any issued shares of the company other than shares held as treasury shares. A payment out of capital by a company for the redemption or purchase of its own shares is not lawful unless immediately following the date on which the payment is proposed to be made, the company shall be able to pay its debts as they fall due in the ordinary course of business.

Shares purchased by a company is to be treated as cancelled unless, subject to the memorandum and articles of association of the company, the directors of the company resolve to hold such shares in the name of the company as treasury shares prior to the purchase. Where shares of a company are held as treasury shares, the company shall be entered in the register of members as holding those shares, however, notwithstanding the foregoing, the company is not be treated as a member for any purpose and must not exercise any right in respect of the treasury shares, and any purported exercise of such a right shall be void, and a treasury share must not be voted, directly or indirectly, at any meeting of the company and must not be counted in determining the total number of issued shares at any given time, whether for the purposes of the company’sarticlesof association or the Companies Act.

A company is not prohibited from purchasing and may purchase its own warrants subject to and in accordance with the terms and conditions of the relevant warrant instrument or certificate. There is no requirement under Cayman Islands law that a company’s memorandum or articles of association contain a specific provision enabling such purchases and the directors of a company may rely upon the general power contained in its memorandum of association to buy and sell and deal in personal property of all kinds.

Under Cayman Islands law, a subsidiary may hold shares in its holding company and, in certain circumstances, may acquire such shares.

(e) Dividends and Distributions

The Companies Act permits, subject to a solvency test and the provisions, if any, of the company’s memorandum and articles of association, the payment of dividends and distributions out of the share premium account. With the exception of the foregoing, there are no statutory provisions relating to the payment of dividends. Based upon English case law, which is regarded as persuasive in the Cayman Islands, dividends may be paid only out of profits.

No dividend may be declared or paid, and no other distribution (whether in cash or otherwise) of the company’s assets (including any distribution of assets to members on a winding up) may be made to the company, in respect of a treasury share.

(f) Protection of Minorities and Shareholders’ Suits

The Courts ordinarily would be expected to follow English case law precedents which permit a minority shareholder to commence a representative action against or derivative actions in the name of the company to challenge (a) an act which is ultra vires the company or illegal, (b) an act

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which constitutes a fraud against the minority and the wrongdoers are themselves in control of the company, and (c) an irregularity in the passing of a resolution which requires a qualified (or special) majority.

In the case of a company (not being a bank) having a share capital divided into shares, the Court may, on the application of members holding not less than one fifth of the shares of the company in issue, appoint an inspector to examine into the affairs of the company and to report thereon in such manner as the Court shall direct.

Any shareholder of a company may petition the Court which may make a winding up order if the Court is of the opinion that it is just and equitable that the company should be wound up or, as an alternative to a winding up order, (a) an order regulating the conduct of the company’s affairs in the future, (b) an order requiring the company to refrain from doing or continuing an act complained of by the shareholder petitioner or to do an act which the shareholder petitioner has complained it has omitted to do, (c) an order authorizing civil proceedings to be brought in the name and on behalf of the company by the shareholder petitioner on such terms as the Court may direct, or (d) an order providing for the purchase of the shares of any shareholders of the company by other shareholders or by the company itself and, in the case of a purchase by the company itself, a reduction of the company’s capital accordingly.

Generally claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by the company’s memorandum and articles of association.

(g) Disposal of Assets

The Companies Act contains no specific restrictions on the power of directors to dispose of assets of a company. However, as a matter of general law, every officer of a company, which includes a director, managing director and secretary, in exercising his powers and discharging his duties must do so honestly and in good faith with a view to the best interests of the company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(h) Accounting and Auditing Requirements

A company must cause proper books of account to be kept with respect to (i) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; (ii) all sales and purchases of goods by the company; and (iii) the assets and liabilities of the company.

Proper books of account shall not be deemed to be kept if there are not kept such books as are necessary to give a true and fair view of the state of the company’s affairs and to explain its transactions.

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An exempted company must make available at its registered office in electronic form or any other medium, copies of its books of account or parts thereof as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Act of the Cayman Islands.

(i) Exchange Control

There are no exchange control regulations or currency restrictions in the Cayman Islands.

(j) Taxation

Pursuant to the Tax Concessions Act of the Cayman Islands, our Company has obtained an undertaking:

(1) that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciation shall apply to our Company or our operations; and

(2) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on or in respect of the shares, debentures or other obligations of our Company.

The undertaking for our Company is for a period of twenty years from April 12, 2021.

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likelytobematerialtoourCompanyleviedbythe Government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments executed in or brought within the jurisdiction of the Cayman Islands. The Cayman Islands are a party to a double tax treaty entered into with the United Kingdom in 2010 but otherwise is not party to any double tax treaties.

(k) Stamp Duty on Transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands.

(l) Loans to Directors

There is no express provision in the Companies Act prohibiting the making of loans by a company to any of its directors.

(m) Inspection of Corporate Records

The notice of registered office is a matter of public record. A list of the names of the current directors and alternate directors (if applicable) is made available by the Registrar of Companies for inspection by any person on payment of a fee. The register of mortgages is open to inspection by creditors and members.

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Members of our Company have no general right under the Companies Act to inspect or obtain copies of the register of members or corporate records of our Company. They will, however, have such rights as may be set out in the Articles.

(n) Register of Members

An exempted company may maintain its principal register of members and any branch registers at such locations, whether within or without the Cayman Islands, as the directors may, from time to time, think fit. The register of members shall contain such particulars as required by Section 40 of the Companies Act. A branch register must be kept in the same manner in which a principal register is by the Companies Act required or permitted to be kept. The company shall causetobekeptattheplacewherethecompany’s principal register is kept a duplicate of any branch register duly entered up from time to time.

There is no requirement under the Companies Act for an exempted company to make any returns of members to the Registrar of Companies of the Cayman Islands. The names and addresses of the members are, accordingly, not a matter of public record and are not available for public inspection. However, an exempted company shall make available at its registered office, in electronic form or any other medium, such register of members, including any branch register of members, as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Act of the Cayman Islands.

(o) Register of Directors and Officers

Our Company is required to maintain at our registered office a register of directors and officers which is not available for inspection by the public. A copy of such register must be filed with the Registrar of Companies in the Cayman Islands and any change must be notified to the Registrar within 30 days of any change in such directors or officers.

(p) Beneficial Ownership Register

An exempted company is required to maintain a beneficial ownership register at its registered office that records details of the persons who ultimately own or control, directly or indirectly, 25% or more of the equity interests or voting rights of the company or have rights to appoint or remove a majority of the directors of the company. The beneficial ownership register is not a public document and is only accessible by a designated competent authority of the Cayman Islands. Such requirement does not, however, apply to an exempted company with its shares listed on an approved stock exchange, which includes the Stock Exchange. Accordingly, for so long as the shares of our Company are [REDACTED] on the Stock Exchange, our Company is not required to maintain a beneficial ownership register.

(q) Winding Up

A company may be wound up (a) compulsorily by order of the Court, (b) voluntarily, or (c) under the supervision of the Court.

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The Court has authority to order winding up in a number of specified circumstances including where the members of the company have passed a special resolution requiring the company to be wound up by the Court, or where the company is unable to pay its debts, or where it is, in the opinion of the Court, just and equitable to do so. Where a petition is presented by members of the company as contributories on the ground that it is just and equitable that the company should be wound up, the Court has the jurisdiction to make certain other orders as an alternative to a winding-up order, such as making an order regulating the conduct of the company’saffairsinthe future, making an order authorising civil proceedings to be brought in the name and on behalf of the company by the petitioner on such terms as the Court may direct, or making an order providing for the purchase of the shares of any of the members of the company by other members or by the company itself.

A company (save with respect to a limited duration company) may be wound up voluntarily when the company so resolves by special resolution or when the company in general meeting resolves by ordinary resolution that it be wound up voluntarily because it is unable to pay its debts as they fall due. In the case of a voluntary winding up, such company is obliged to cease to carry on its business (except so far as it may be beneficial for its winding up) from the time of passing the resolution for voluntary winding up or upon the expiry of the period or the occurrence of the event referred to above.

For the purpose of conducting the proceedings in winding up a company and assisting the Court therein, there may be appointed an official liquidator or official liquidators; and the court may appoint to such office such person, either provisionally or otherwise, as it thinks fit, and if more persons than one are appointed to such office, the Court must declare whether any act required or authorized to be done by the official liquidator is to be done by all or any one or more of such persons. The Court may also determine whether any and what security is to be given by an official liquidator on his appointment; if no official liquidator is appointed, or during any vacancy in such office, all the property of the company shall be in the custody of the Court.

As soon as the affairs of the company are fully wound up, the liquidator must make a report and an account of the winding up, showing how the winding up has been conducted and how the property of the company has been disposed of, and thereupon call a general meeting of the company for the purposes of laying before it the account and giving an explanation thereof. This final general meeting must be called by at least 21 days’ notice to each contributory in any manner authorized by the company’s articles of association and published in the Gazette.

(r) Reconstructions

There are statutory provisions which facilitate reconstructions and amalgamations approved by a majority in number representing 75% in value of shareholders or class of shareholders or creditors, as the case may be, as are present at a meeting called for such purpose and thereafter sanctioned by the Court. Whilst a dissenting shareholder would have the right to express to the Court his view that the transaction for which approval is sought would not provide the shareholders with a fair value for their shares, the Court is unlikely to disapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith on behalf of management.

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(s) Take-overs

Where an offer is made by a company for the shares of another company and, within four months of the offer, the holders of not less than 90% of the shares which are the subject of the offer accept, the offeror may at any time within two months after the expiration of the said four months, by notice in the prescribed manner require the dissenting shareholders to transfer their shares on the terms of the offer. A dissenting shareholder may apply to the Court within one month of the notice objecting to the transfer. The burden is on the dissenting shareholder to show that the Court should exercise its discretion, which it will be unlikely to do unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing out minority shareholders.

(t) Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Court to be contrary to public policy (e.g. for purporting to provide indemnification against the consequences of committing a crime).

(u) Economic Substance Requirements

Pursuant to the International Tax Cooperation (Economic Substance) Act, 2018 of the Cayman Islands (‘‘ES Act’’) that came into force on January 1, 2019, a ‘‘relevant entity’’ is required to satisfy the economic substance test set out in the ES Act. A ‘‘relevant entity’’ includes an exempted company incorporated in the Cayman Islands as is our Company; however, it does not include an entity that is tax resident outside the Cayman Islands. Accordingly, for so long as our Company is a tax resident outside the Cayman Islands, including in Hong Kong, it is not required to satisfy the economic substance test set out in the ES Act.

4. GENERAL

Conyers Dill & Pearman, our Company’s special legal counsel on Cayman Islands law, have sent to our Company a letter of advice summarizing certain aspects of Cayman Islands company law. This letter, together with a copy of the Companies Act, is available for inspection as referred to in ‘‘Appendix V — Documents Delivered to the Registrar of Companies and Available for Inspection — Documents Available for Inspection.’’ Any person wishing to have a detailed summary of Cayman Islands company law or advice on the differences between it and the laws of any jurisdiction with which he is more familiar is recommended to seek independent legal advice.

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A. FURTHER INFORMATION ABOUT OUR COMPANY

1. Incorporation

Our Company was incorporated in the Cayman Islands under the Companies Act as an exempted company with limited liability on March 30, 2021. We have established our principal place of business in Hong Kong at 2/F, Tower A, Regent Centre, 63 Wo Yi Hop Road, Kwai Chung, New Territories, Hong Kong and been registered with the Registrar of Companies in Hong Kong as a non-Hong Kong company under Part 16 of the Companies Ordinance on May 21, 2021, with Mr. Kenneth Fong being appointed as the authorized representative of our Company for the acceptance of service of process and notices on behalf of our Company in Hong Kong.

As our Company was incorporated in the Cayman Islands, we operate subject to the Companies Act and to our constitution comprising the Memorandum and Articles of Association. A summary of certain provisions of the Memorandum and Articles of Association and relevant aspects of the Companies Act are set out in Appendix III.

2. Changes in the Share Capital of Our Company

The authorized share capital of our Company as of the date of our incorporation was HK$380,000 divided into 38,000,000 Shares of HK$0.01 each. Upon our incorporation, one Share (the ‘‘Subscriber Share’’) was allotted and issued, nil paid, to our initial subscriber. On the same day, the Subscriber Share was transferred to Eminent Leader. Pursuant to a sale and purchase agreement dated June 21, 2021, Eminent Leader transferred its entire shareholding in Eminent Dragon to our Company in consideration of our Company allotting and issuing nine Shares to Eminent Leader, credited as fully paid, and crediting as fully paid the Subscriber Share.

On [.], the authorized share capital of our Company was increased from HK$380,000 divided into 38,000,000 Shares of HK$0.01 each to HK$[REDACTED] divided into [REDACTED] Shares of HK$0.01 each by the creation of an additional [REDACTED] Shares of HK$0.01 each which rank pari passu in all respect with the existing Shares.

Save as disclosed in this Appendix IV and as set out in ‘‘History, Reorganization, Development and Corporate Structure,’’ there has been no alteration in the share capital of our Company within the two years immediately preceding the date of this document.

3. Changes in the Share Capital of Our Subsidiaries

Our subsidiaries are set out in the Accountant’s Report, the text of which is set out in Appendix I.

On January 29, 2021, Xihai (Shanghai) was established in the PRC with limited liability and wholly-owned by Telford Wine & Spirits (S), with a registered capital of RMB100,000.

On May 13, 2021, Telford Beverage Brands was incorporated in Hong Kong with limited liability. On the same day, Eminent Dragon subscribed for and Telford Beverage Brands allotted and issued to Eminent Dragon one fully paid share for the consideration of HK$1.00. As a result, Telford Beverage Brands became a wholly-owned subsidiary of Eminent Dragon, with an issued share capital of HK$1.00.

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On May 13, 2021, Telford Spirits Brands was incorporated in Hong Kong with limited liability. On the same day, Eminent Dragon subscribed for and Telford Spirits Brands allotted and issued to Eminent Dragon one fully paid share for the consideration of HK$1.00. As a result, Telford Spirits Brands became a wholly-owned subsidiary of Eminent Dragon, with an issued share capital of HK$1.00.

Save as disclosed above and in ‘‘History, Reorganization, Development and Corporate Structure,’’ there has been no alteration in the share capital of our subsidiaries within the two years immediately preceding the date of this document.

4. Written Resolutions of the Sole Shareholder Passed on [.], 2021

By written resolutions of the sole Shareholder passed on [.], 2021, amongst other things:

(a) our Company approved and adopted the Memorandum with immediate effect and conditionally approved and adopted the Articles of Association with effect from the [REDACTED];

(b) the authorized share capital of our Company was increased from HK$380,000 divided into 38,000,000 Shares to HK$[REDACTED] divided into [REDACTED] Shares by the creation of an additional [REDACTED] Shares, which rank pari passu in all respects with the Shares in issue as of the date of such resolutions;

(c) conditional on (i) the [REDACTED] granting approval for the [REDACTED] of, and permission to deal in, our Shares in issue and to be issued pursuant to the [REDACTED] and the [REDACTED] (including any additional Shares pursuant to the exercise of the [REDACTED]) and our Shares which may be issued upon exercise of the options to be granted under the Share Option Scheme on the Main Board of the Stock Exchange on described in this document and the approval not having been revoked; (ii) the execution and delivery of the [REDACTED] on or around the [REDACTED]; (iii) the [REDACTED] having been agreed between us and the [REDACTED] (on behalf of the [REDACTED]); and (iv) the obligations of the [REDACTED] under both the [REDACTED] and the [REDACTED] having become unconditional and not having been terminated in accordance with their respective terms, in each case on or before the dates and times specified in the respective [REDACTED] (unless and to the extent such conditions are waived on or before such dates and times) and in any event not later than [REDACTED] (being 30 days after the date of this document):

(i) the [REDACTED] and the grant of the [REDACTED] were approved and our Directors were authorized to (aa) allot and issue the [REDACTED] pursuant to the [REDACTED] and such number of Shares as may be required to be allotted and issued upon the exercise of the [REDACTED], on and subject to the terms and conditions thereof as set out in this document; (bb) implement the [REDACTED] and the [REDACTED]; and (cc) do all things and execute all documents in

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connection with or incidental to the [REDACTED] and the [REDACTED] with such amendments or modifications (if any) as our Directors may consider necessary and/or appropriate;

(ii) the rules of the Share Option Scheme, the principal terms of which are set out in ‘‘— D. Share Option Scheme’’ were approved and adopted and our Directors were authorized to approve any amendment(s) or modification(s) to the rules of the Share Option Scheme as may be acceptable or not objected to by the Stock Exchange, and at their absolute discretion (but subject to the terms and conditions of the Share Option Scheme) to grant options to subscribe for Shares thereunder and to allot, issue and deal with the Shares pursuant to the exercise of options which may be granted under the Share Option Scheme and to take all such steps as may be necessary, desirable or expedient to carry into effect and implement the Share Option Scheme;

(iii) conditional on the share premium account of our Company having sufficient balance, or otherwise being credited as a result of the allotment and issue of new Shares by our Company pursuant to the [REDACTED], our Directors were authorized to [REDACTED] HK$[REDACTED] standing to the credit of the share premium account of our Company by applying such sum to pay up in full at par a total of [REDACTED] new Shares for allotment and issue to the holder of Shares (the ‘‘Relevant Shareholder’’) whose name appears on the register of members of our Company at the close of business on the business day immediately preceding the [REDACTED] or in accordance with the direction of the Relevant Shareholder and our Directors were authorized to give effect to such [REDACTED] and to allot and issue Shares pursuant thereto and the Shares to be allotted and issued pursuant to this resolution shall rank pari passu in all respects with the then existing issued Shares and the name of the Relevant Shareholder be entered in the register of members of our Company as holder of the relevant number of Shares allottedandissuedtoit;

(iv) a general unconditional mandate was granted to our Directors to exercise all powers of our Company to allot, issue and deal with Shares or securities convertible into Shares or options, warrants or similar rights to subscribe for Shares or such convertible securities andtomakeorgrantoffers,agreementsor options which would or might require Shares to be allotted and issued or dealt with, otherwise than pursuant to a rights issue, any scrip dividend schemes or similar arrangements providing for allotment and issue of Shares in lieu of the whole or in part of a dividend on Shares in accordance with the Articles, or a specific authority granted by the Shareholders in general meeting, or the exercise of any subscription rights attached to any warrants or securities which are convertible into Shares or the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme or any other option scheme, an aggregate number of Shares not exceeding the sum of (aa) 20% of the total number of Shares in issue immediately following completion of the [REDACTED] and the [REDACTED] (but not taking into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options

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which may be granted under the Share Option Scheme); and (bb) the aggregate number of Shares which may be purchased by our Company pursuant to the authority granted to our Directors as referred to in sub-paragraph (v) below, until the conclusion of the next annual general meeting of our Company, or the date by which the next annual general meeting of our Company is required by the Articles or any other applicable laws of the Cayman Islands to be held, or the passing of an ordinary resolution by our Shareholders in general meeting revoking or varying or renewing the authority given to our Directors, whichever occurs first;

(v) a general unconditional mandate was granted to our Directors to exercise all powers of our Company to repurchase on the Stock Exchange or on any other stock exchange(s) on which the securities of our Company may be listed and which is recognized by the SFC and the Stock Exchange for this purpose (the ‘‘Repurchase Mandate’’), in accordance with all applicable laws and the requirements of the Listing Rules or equivalent rules or regulations of such other stock exchange(s), an aggregate number of Shares not exceeding 10% of the total number of Shares in issue immediately following completion of the [REDACTED] and the [REDACTED] (but not taking into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme), until the conclusion of the next annual general meeting of our Company, or the date by which the next annual general meeting of our Company is required by the Articles or any other applicable laws of the Cayman Islands to be held, or the passing of an ordinary resolution by our Shareholders in general meeting revoking or varying or renewing the authority given to our Directors, whichever occurs first; and

(vi) the general unconditional mandate mentioned in sub-paragraph (iv) above was extended by the addition to the aggregate number of Shares which may be allotted or agreed to be allotted by our Directors pursuant to such general mandate of an amount representing the aggregate number of Shares repurchased by our Company pursuant to the Repurchase Mandate as referred to in sub-paragraph (v) above, provided that such extended amount shall not exceed 10% of the total number of Shares in issue immediately following completion of the [REDACTED] and the [REDACTED] (but not taking into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme).

5. Reorganization

The companies comprising our Group underwent the Reorganization in preparation for the [REDACTED]. For details, see ‘‘History, Reorganization, Development and Corporate Structure — Reorganization.’’

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6. Repurchase by Our Company of Our Own Securities

This Appendix IV includes information required by the Stock Exchange to be included in this document concerning the repurchase by our Company of our own securities.

(a) Provisions of the Listing Rules

The Listing Rules permit companies with a primary listing on the Stock Exchange to repurchase their shares on the Stock Exchange subject to certain restrictions, the most important of which are summarized below.

(i) Shareholders’ Approval

The Listing Rules provide that all proposed repurchases of shares (which must be fully paid in the case of shares) by a company with a primary listing on the Stock Exchange must be approved in advance by an ordinary resolution of the Shareholders, either by way of general mandate(1) or by specific approval of a particular transaction.

(1) Pursuant to the written resolutions of the sole Shareholder passed on [.], 2021, the Repurchase Mandate was granted to our Directors to exercise all powers of our Company to repurchase on the Stock Exchange or any other stock exchange(s) on which the securities of our Company may be [REDACTED] and which is recognized by the SFC and the Stock Exchange for this purpose, an aggregate number of Shares not exceeding 10% of the total number of Shares in issue immediately following completion of the [REDACTED] and the [REDACTED] (but not taking into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme), and the Repurchase Mandate shall remain in effect until the conclusion of the next annual general meeting of our Company, or the date by which the next annual general meeting of our Company is required by the Articles or any other applicable laws of the Cayman Islands to be held, or the passing of an ordinary resolution by our Shareholders in general meeting revoking or varying or renewing the authority given to our Directors, whichever occurs first.

(ii) Source of Funds

Repurchases of the Shares must be funded out of funds legally available for the purpose in accordance with the Memorandum and Articles of Association and the Companies Act. A listed company may not repurchase its own shares on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange.

Any repurchase(s) of the Shares by us may be made out of profits, share premium or out of the proceeds of a fresh issue of Shares made for the purpose of the repurchase or, subject to the Companies Act, out of capital and, in the case of any premium payable on the repurchase, out of profits of our Company or out of our Company’s share premium account before or at the time the Shares are repurchased or, subject to the Companies Act, out of capital.

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(iii) Connected Parties

The Listing Rules prohibit our Company from knowingly repurchasing Shares on the Stock Exchange from a core connected person, which includes a Director, chief executive or substantial Shareholders of our Company or any of the subsidiaries or a close associate of any of them and a core connected person shall not knowingly sell Shares to our Company.

(b) Reasons for Repurchases

Our Directors believe that it is in the best interests of our Company and our Shareholders as a whole for our Directors to have a general authority from our Shareholders to enable our Company to repurchase Shares in the market. Such repurchases may, depending on the market conditions and funding arrangements at the time, lead to an enhancement of our Company’s net asset value per Share and/or earnings per Share and will only be made when our Directors believe that such repurchases will benefit our Company and our Shareholders as a whole. The number of Shares to be repurchased on any occasion and the price and other terms upon which the same are repurchased will be decided by our Directors at the relevant time having regard to the circumstances then pertaining.

In repurchasing Shares, our Company may only apply funds legally available for such purpose in accordance with the Memorandum and Articles of Association, the Listing Rules and the applicable laws of the Cayman Islands.

There could be a material adverse impact on the working capital or gearing position of our Company (as compared with the position disclosed in this document) if the Repurchase Mandate were to be carried out in full at any time during the Share repurchase period. However, our Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing levels of our Company which, in the opinion of our Directors, are from time to time appropriate for our Company.

(d) General

The exercise in full of the Repurchase Mandate, on the basis of [REDACTED] Shares in issue immediately after the [REDACTED] (assuming the [REDACTED] is not exercised and no options are granted under the Share Option Scheme), would result in up to [REDACTED] Shares being repurchased by our Company during the period in which the Repurchase Mandate remains in force.

None of our Directors nor, to the best of their knowledge, having made all reasonable enquiries, any of their respective close associates, has any present intention to sell any Share(s) to our Company.

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Our Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of the Cayman Islands.

If, as a result of a repurchase of Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of our Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code. Accordingly, a Shareholder or a group of Shareholders acting in concert, depending on the level of increase of the Shareholders’ interest, could obtain or consolidate control of our Company and may become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code as a result of any such increase. Save as disclosed above, our Directors are not aware of any consequence that would arise under the Takeovers Code as a result of a repurchase of Shares pursuant to the Repurchase Mandate.

Our Directors will not exercise the Repurchase Mandate if the repurchase would result in the number of Shares which are in the hands of the public falling below 25% of the total number of Shares in issue (or such other percentage as may be prescribed as the minimum public shareholding under the Listing Rules).

No core connected person of our Company has notified our Company that he/she/it has a present intention to sell Shares to our Company, or has undertaken not to do so, if the Repurchase Mandate is exercised.

B. FURTHER INFORMATION ABOUT OUR BUSINESS

1. Summary of Material Contracts

The following contracts (not being contracts in the ordinary course of business) have been entered into by members of our Group within the two years preceding the date of this document and are or may be material:

(a) the sale and purchase agreement dated June 21, 2021 entered into among Eminent Leader, Mr. C.Y. Fong, Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong, Mr. Vincent Fong and our Company for the transfer of all the issued shares of Eminent Dragon to our Company in consideration of our Company allotting and issuing nine Shares to Eminent Leader credited as fully paid and crediting as fully paid the initial Share held by Eminent Leader;

(b) the deed of assignment of trademarks dated June 11, 2021 entered into among Telford Enterprise (as assignor) and Telford Beverage Brands (as assignee) pursuant to which Telford Enterprise assigned all of its right, title and interest in relation to Tao Ti trademarks registered or being applied for registration in Hong Kong, the PRC and other jurisdictions, together with the goodwill, to Telford Beverage Brands for the consideration of HK$212,500,000;

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(c) the deed of assignment of trademarks dated June 11, 2021 entered into among Telford Enterprise (as assignor) and Telford Beverage Brands (as assignee) pursuant to which Telford Enterprise assigned all of its right, title and interest in relation to Meko trademarks registered in Hong Kong, the PRC and other jurisdictions, together with the goodwill, to Telford Beverage Brands for the consideration of HK$17,500,000;

(d) the Deed of Indemnity;

(e) the Deed of Non-competition; and

(f) the [REDACTED].

2. Intellectual Property Rights

As of the Latest Practicable Date, the following intellectual property rights are material to our business:

(a) Trademarks

(i) As of the Latest Practicable Date, we had registered the following trademarks which are material to our business:

Place of Registration Registration No. Trademark Registered owner registration Class number date Renewal date

1. Telford Beverage Hong Kong 30 1999B01505 August 12, 1994 August 12, 2025 Brands

2. Telford Beverage Hong Kong 29 199913210 December 11, December 11, Brands 1997 2024

3. Telford Beverage Hong Kong 30, 32 200108811AA July 25, 2000 July 25. 2027 Brands

4. Telford Beverage Hong Kong 30, 32 301155429 July 8, 2008 July 7, 2028 Brands

5. Telford Beverage Hong Kong 30, 32 300355770 January 18, January 17, Brands 2005 2025

6. Telford Beverage Hong Kong 30, 32, 33 301941246 June 9, 2011 June 8, 2031 Brands

7. Telford Beverage Hong Kong 30, 32, 33 301950101 June 20, 2011 June 19, 2031 Brands

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Place of Registration Registration No. Trademark Registered owner registration Class number date Renewal date

8. Telford Beverage Hong Kong 30, 32, 33 301950129 June 20, 2011 June 19, 2031 Brands

9. Telford Beverage Hong Kong 32 303264174 January 12, January 11, Brands 2015 2025

10. Telford Beverage Hong Kong 32 303284488 January 28, January 27, Brands 2015 2025

11. Telford Beverage Hong Kong 30 2002B08502 October 15, October 15, Brands 1999 2026

12. Telford Beverage Hong Kong 32 2002B08625 June 14, 2001 June 14, 2028 Brands

13. Telford Beverage Hong Kong 32 300214325 May 14, 2004 May 14, 2024 Brands

14. Telford Beverage Hong Kong 30, 32 300981676 October 29, October 28, Brands 2007 2027

15. Telford Beverage Hong Kong 30, 32, 33 302019717 August 31, 2011 August 30, 2031 Brands

16. Telford Beverage Hong Kong 30 303297989 February 9, February 8, Brands 2015 2025

17. Telford Beverage Hong Kong 30 304888243 April 11, 2019 April 10, 2029 Brands

18. Telford Beverage Hong Kong 39, 41 301331702 April 27, 2009 April 26, 2029 Brands

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Place of Registration Registration No. Trademark Registered owner registration Class number date Renewal date

19. Telford Beverage Hong Kong 30, 32 301758880 November 9, November 8, Brands 2010 2030

20. Telford Beverage Macau 30 N/12688 September 23, September 23, Brands 2004 2025

21. Telford Beverage Macau 32 N/12687 September 23, September 23, Brands 2004 2025

22. Telford Beverage Macau 30 N/12491 December 3, December 3, Brands 2004 2025

23. Telford Beverage Macau 32 N/12492 December 3, December 3, Brands 2004 2025

24. Telford Beverage Macau 32 N/14147 October 8, 2004 October 8, 2025 Brands

25. Telford Beverage PRC 30 1707174 January 28, January 27, Brands 2002 2032

26. Telford Beverage PRC 29 672102 January 7, 2014 January 6, 2024 Brands

27. Telford Beverage PRC 30 672102 January 7, 2014 January 6, 2024 Brands

– IV-10 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. APPENDIX IV STATUTORY AND GENERAL INFORMATION

Place of Registration Registration No. Trademark Registered owner registration Class number date Renewal date

28. Telford Beverage PRC 32 1177701 May 21, 2018 May 20, 2028 Brands

29. Telford Beverage PRC 30 877988 October 7, 2016 October 6, 2026 Brands

30. Telford Beverage PRC 32 7053160 June 21, 2020 June 20, 2030 Brands

31. Telford Beverage PRC 32 1579575 May 28, 2001 May 27, 2031 Brands

32. Telford Beverage PRC 29 1943323 September 14, September 13, Brands 2012 2022

33. Telford Beverage PRC 30 4466633 May 14, 2019 May 13, 2029 Brands

34. Telford Beverage PRC 32 4466634 April 21, 2019 April 20, 2029 Brands

35. Telford Beverage PRC 32 16236657 March 21, 2016 March 20, 2026 Brands

36. Telford Beverage PRC 30 38930022 February 7, February 6, Brands 2020 2030

37. Telford Beverage PRC 30 38930023 December 21, December 20, Brands 2020 2030

38. Telford Beverage PRC 32 34199087 August 7, 2019 August 6, 2029 Brands

39. Telford Beverage PRC 32 34626519 November 7, November 6, Brands 2019 2029

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Place of Registration Registration No. Trademark Registered owner registration Class number date Renewal date

40. Telford Beverage PRC 29 44770840 December 21, December 20, Brands 2020 2030

41. Telford Beverage PRC 30 44760138 December 21, December 20, Brands 2020 2030

42. Telford Beverage PRC 32 44756959 December 21, December 20, Brands 2020 2030

43. Telford Beverage PRC 33 44787072 December 21, December 20, Brands 2020 2030

44. Telford Beverage PRC 35 44759008 December 28, December 27, Brands 2020 2030

45. Telford Beverage Australia 30, 32 670405 August 23, 1995 August 23, 2025 Brands

46. Telford Beverage Australia 32 934462 November 18, November 18, Brands 2002 2022

47. Telford Beverage Australia 32 1627772 June 11, 2014 June 11, 2024 Brands

48. Telford Beverage Canada 30 TMA457840 May 24, 1996 May 24, 2026 Brands

49. Telford Beverage Canada 32 TMA603925 March 3, 2004 March 3, 2034 Brands

50. Telford Beverage European Union 30 005782024 April 1, 2011 March 23, 2027 Brands

51. Telford Beverage United Kingdom 30 UK00905782024 March 23, 2007 March 23, 2027 Brands

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Place of Registration Registration No. Trademark Registered owner registration Class number date Renewal date

52. Telford Beverage European Union 30, 32 005434311 September 20, November 2, Brands 2007 2026

53. Telford Beverage United Kingdom 30, 32 UK00905434311 November 2, November 2, Brands 2006 2026

54. MEKO Telford Beverage European Union 29, 30, 32 014200431 September 7, June 5, 2025 Brands 2017

55. MEKO Telford Beverage United Kingdom 29, 30, 32 UK00914200431 June 5, 2015 June 5, 2025 Brands

56. Telford Beverage Japan 30 3300497 May 2, 1997 May 2, 2027 Brands

57. Telford Beverage Japan 32 5083066 October 12, October 12, Brands 2007 2027

58. MEKO Telford Beverage Japan 32 5796032 October 2, 2015 October 2, 2025 Brands

59. Telford Beverage Korea 30 40–0713181 June 12, 2007 June 12, 2027 Brands

60. Telford Beverage Korea 32 40–0713182 June 12, 2007 June 12, 2027 Brands

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Place of Registration Registration No. Trademark Registered owner registration Class number date Renewal date

61. TAO-TI Telford Beverage Korea 30 40–0713179 June 12, 2007 June 12, 2027 Brands

62. TAO-TI Telford Beverage Korea 32 40–0713180 June 12, 2007 June 12, 2027 Brands

63. MEKO Telford Beverage Korea 32 40–1153900 January 11, January 11, Brands 2016 2026

64. Telford Beverage Malaysia 30 04008939 June 30, 2004 June 30, 2024 Brands

65. Telford Beverage Malaysia 32 04008940 June 30, 2004 June 30, 2024 Brands

66. Telford Beverage Malaysia 32 04008942 June 30, 2004 June 30, 2024 Brands

67. Telford Beverage Malaysia 30 2015052444 February 17, February 17, Brands 2015 2025

68. Telford Beverage New Zealand 30, 32 713523 June 8, 2004 June 8, 2024 Brands

69. Telford Beverage New Zealand 30, 32 713522 June 8, 2004 June 8, 2024 Brands

70. Telford Beverage Philippines 30, 32 4/2015/7721 October 8, 2015 October 8, 2025 Brands

71. MEKO Telford Beverage Philippines 32 4/2015/6432 February 11, February 11, Brands 2016 2026

72. Telford Beverage Singapore 30 T9407386I August 25, 1994 August 25, 2024 Brands

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Place of Registration Registration No. Trademark Registered owner registration Class number date Renewal date

73. Telford Beverage Singapore 30 40201502449P February 12, February 12, Brands 2015 2025

74. MEKO Telford Beverage Singapore 32 40201509738P June 8, 2015 June 8, 2025 Brands

75. Telford Beverage Taiwan 30 00793942 January 16, March 31, 2023 Brands 1998

76. Telford Beverage Taiwan 32 00786385 November 16, March 31, 2023 Brands 1997

77. Telford Beverage Taiwan 30 01961875 January 1, 2019 December 31, Brands 2028

78. Telford Beverage Thailand 30 KOR128862 December 23, December 22, Brands 1999 2029

79. Telford Beverage Thailand 30 KOR128861 December 23, December 22, Brands 1999 2029

80. Telford Beverage United States 30 2072165 June 17, 1997 June 17, 2027 Brands

81. Telford Beverage United States 30 3869406 November 2, November 2, Brands 2010 2030

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Place of Registration Registration No. Trademark Registered owner registration Class number date Renewal date

82. Telford Beverage United States 32 3752965 February 23, February 23, Brands 2010 2030

83. Telford Beverage United States 30, 32 3875820 November 16, November 16, Brands 2010 2030

84. Telford Beverage United States 32 4847054 November 3, November 3, Brands 2015 2025

85. Telford Beverage Vietnam 30, 32 4–0195770 November 15, July 15, 2030 Brands 2012

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(ii) As of the Latest Practicable Date, we had been granted the exclusive right-to-use the following trademarks which are or may be material to our business:

Place of Registration Registration No. Trademark Registered owner registration Class number date Renewal date

1. Telford Enterprise Hong Kong 30 304376287 December 21, December 20, 2017 2027

2. Telford Enterprise Hong Kong 30 304528422 May 16, 2018 May 15, 2028

3. Telford Enterprise Macau 30 N/139220 November 27, November 27, 2018 2025

4. Telford Enterprise PRC 30 31547419 November 7, November 6, 2020 2030

5. Telford Enterprise Taiwan 30 02001916 August 1, 2019 July 31, 2029

6. Telford Enterprise Hong Kong 33 302721537 August 30, 2013 August 29, 2023

7. Telford Enterprise Hong Kong 33 302721627 August 30, 2013 August 29, 2023

8. Telford Enterprise Hong Kong 33 303000031 May 19, 2014 May 18, 2024

9 Telford Enterprise Macau 33 N/078339 February 28, February 28, 2014 2021(1)

10. Telford Enterprise Macau 33 N/078340 February 28, February 28, 2014 2021(1)

11. Telford Enterprise PRC 33 13136123 February 28, December 27, 2014 2024

12. Telford Enterprise PRC 33 13136124 February 28, December 27, 2014 2024

13. Telford Enterprise PRC 33 14221108 April 28, 2015 April 27, 2025

14. Telford Enterprise Australia 33 1626342 June 3, 2014 June 3, 2024

15. Telford Enterprise Canada 33 TMA970976 May 16, 2017 May 16, 2032

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Place of Registration Registration No. Trademark Registered owner registration Class number date Renewal date

16. Telford Enterprise Japan 33 5716203 November 7, November 7, 2014 2024

17. Telford Enterprise Korea 33 40–1100977 April 20, 2015 April 20, 2025

18. Telford Enterprise Malaysia 33 2018054211 February 28, February 29, 2018 2028

19. Telford Enterprise New Zealand 33 1102885 September 19, September 19, 2018 2028

20. Telford Enterprise Singapore 33 40201803693W February 27, February 27, 2018 2028

21. Telford Enterprise Taiwan 33 01682095 December 16, December 15, 2014 2024

22. Telford Enterprise Taiwan 33 01682096 December 16, December 15, 2014 2024

23. Telford Enterprise United Kingdom 33 UK00003292851 February 27, February 27, 2018 2028

24. Telford Enterprise United States 33 4802167 May 19, 2014 May 19, 2024

25. Telford Enterprise Vietnam 33 349554 February 27, February 27, 2018 2028

(1) The registration of this tradermark is in the process of being renewed.

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(iii) As of the Latest Practicable Date, we had applied for registration of the following trademarks which are material to our business:

Trademark Place of application No. Trademark Applicant application Class number Filing date

1. Telford Hong Kong 35 305540832 February 22, International 2021

2. Telford Hong Kong 35 305540850 February 22, International 2021

3. Telford PRC 35 54319229 March 15, 2021 International

4. Telford PRC 30 55674281 April 28, 2021 Beverage Brands

(b) Domain names

As of the Latest Practicable Date, we had registered the following domain names which are material to our business:

Domain name Registrant Expiry date

www.telford.com.hk Telford International October 6, 2023 www.telfordchina.com.cn Telford Wine & Spirits (S) March 15, 2023 www.telford-international.com Telford International February 24, 2024

Save as disclosed above, there are no trademarks, patents, copyrights or other intellectual property rights which are material in relation to our business.

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C. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

1. Particulars of Directors’ Letters of Appointment

We have entered into a letter of appointment with each of our Directors. Each letter of appointment is for an initial term of three years or until the third annual general meeting of our Company since the [REDACTED] (whichever is earlier), subject to rotation, re-nomination and re- election as and when required under the Articles and the Listing Rules.

Pursuant to the terms of the letter of appointment entered into between each executive Director (on the one part) and our Company (on the other part), the annual director’s fees payable by us to each of the executive Directors are HK$300,000 per annum.

Pursuant to the terms of the letter of appointment entered into between each independent non- executive Director (on the one part) and our Company (on the other part), the annual director’s fees payable by us to each of the independent non-executive Directors are HK$200,000 per annum.

An additional fee of HK$100,000 per annum will be payable to the chairperson of each of our Audit Committee and Remuneration Committee.

Each of our Directors is entitled to reimbursement from our Company for all reasonable expenses necessarily incurred in connection with the performance and discharge of his/her duties under his/her letter of appointment.

Save as disclosed above, none of our Directors has entered into any service contracts with any member of our Group (excluding contracts expiring or determinable by the employer within one year, without payment, of compensation (other than statutory compensation)).

2. Directors’ Remuneration

For details of the Directors’ remuneration, see ‘‘Directors and Senior Management — Directors’ Remuneration and Remuneration of Five Highest Paid Individuals.’’

3. Personal Guarantees

All personal guarantees provided by our Directors in favor of lenders in connection with banking facilities granted to our Group will be released and replaced by a corporate guarantee to be provided by our Company upon the [REDACTED].

4. Interests and Short Positions of Our Directors in the Shares, Underlying Shares or Debentures of Our Company and Our Associated Corporations

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Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she is taken or deemed to have under such provisions of the SFO), or which will be required, pursuant to Section 352 of the SFO, to be recorded in the register referred to therein, or which will be required to be notified to our Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, in each case once the Shares are [REDACTED] on the Stock Exchange, will be as follows:

Long Positions in the Shares of Eminent Leader (Associated Corporation)

Capacity/Nature of Number of Percentage of Name of Director interest share(s) shareholding

Ms. Lucia Fong Beneficial owner 1 0.01% Mr. Kenneth Fong Beneficial owner 1 0.01% Mr. Vincent Fong Beneficial owner 1 0.01%

5. Substantial Shareholders

So far as is known to our Directors, immediately following completion of the [REDACTED] and the [REDACTED] (without taking into account any Shares that may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme), the following persons (not being a Director or chief executive of our Company) will have an interest or a short position in the Shares or underlying Shares which would be required to be disclosed to our Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or will be, directly or indirectly, interested in 10% or more of the Shares once the Shares are [REDACTED] on the Stock Exchange:

Long Position in the Shares of Our Company

Capacity/Nature of Number of Percentage of Name of Shareholder interest Shares shareholding

Eminent Leader Beneficial owner [REDACTED] [REDACTED]% Mr. C. Y. Fong Interest of a controlled [REDACTED] [REDACTED]% corporation (1) Ms. Kay Interest of spouse (2) [REDACTED] [REDACTED]%

(2) Ms. Kay is the spouse of Mr. C. Y. Fong and is therefore deemed to be interested in all the Shares held or interested in by Mr. C. Y. Fong by virtue of the SFO.

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6. Related Party Transactions

During the Track Record Period, our Group engaged in the related party transactions as mentioned in Note 27 of the Accountant’s Report set out in Appendix I.

7. Disclaimers

Save as disclosed in this document:

(a) None of our Directors nor the chief executive of our Company has any interests and short positions in the shares, underlying shares and debentures of our Company or any associated corporation (within the meaning of Part XV of the SFO) which will have to be notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she is taken or deemed to have taken under such provisions of the SFO) or which will be required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or will be required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers, to be notified to our Company and the Stock Exchange, in each case once the Shares are [REDACTED] on the Stock Exchange;

(b) So far as is known to any of our Directors or the chief executive of our Company, no person has an interest or short position in the Shares and underlying Shares which would fall to be disclosed to our Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or is directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of our Company or any other member of our Group;

(c) None of our Directors nor any of the persons listed in ‘‘— E. Other Information — 7. Qualifications and Consents of Experts’’ is interested, directly or indirectly, in the promotion of, or in any assets which have been, within the two years immediately preceding the issue of this document, acquired or disposed of by or leased to any member of our Group, or are proposed to be acquired or disposed of by or leased to any member of our Group;

(d) Save in connection with the [REDACTED], none of our Directors nor any of the persons listed in ‘‘— E. Other Information — 7. Qualifications and Consents of Experts’’ is materially interested in any contract or arrangement with our Group subsisting at the date of this document which is significant in relation to the business of our Group; and

(e) None of our Directors has entered or has proposed to enter into any service contracts with our Company or any member of our Group (other than contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

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D. SHARE OPTION SCHEME

Our Company has conditionally adopted the Share Option Scheme, which was approved by the written resolutions of the sole Shareholder passed on [.], 2021. The following is a summary of the principal terms of the Share Option Scheme but does not form part of, nor was it intended to be, part of the Share Option Scheme, nor should it be taken as affecting the interpretation of the rules of the Share Option Scheme.

The terms of the Share Option Scheme are in accordance with the provisions of Chapter 17 of the Listing Rules.

(a) Purpose of the Share Option Scheme

The purpose of this Share Option Scheme is to enable our Board to grant options to selected Eligible Persons (as defined below) as incentives or rewards for their contribution or potential contribution to our Group and/or to recruit and retain high caliber Eligible Persons and attract human resources that are valuable to our Group.

(b) Who May Join

Subject to the provisions in the Share Option Scheme, our Directors may at any time and from time to time within a period of ten years commencing from the date of adoption of the Share Option Scheme at their absolute discretion and subject to such terms, conditions, restrictions or limitations as they may think fit offer, at the consideration of HK$1.00 per grant, to grant option to any person belonging to the following classes of participants (the ‘‘Eligible Person(s)’’):

(i) any employee or proposed employee (whether full-time or part-time, including any director) of any member of our Group or invested entity; and

(ii) any supplier of goods or services, any client, any person or entity that provides research, development or other technological support, any shareholder, consultant or other participant who contributes to the development and growth of our Group or any invested entity.

(i) Notwithstanding anything to the contrary herein, the maximum number of Shares which may be issued upon the exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other schemes of our Company shall not, in aggregate, exceed 30% of the total number of Shares in issue from time to time.

(ii) The total number of Shares which may be issued upon the exercise of all options to be granted under the Share Option Scheme and any other schemes of our Company shall not in aggregate exceed [REDACTED] Shares, being 10% of the total number of Shares (assuming the [REDACTED] is not exercised) in issue on the [REDACTED] (the ‘‘Scheme Limit’’) unless approved by our Shareholders pursuant to sub-paragraph (iv)

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below. Options lapsed in accordance with the terms of the Share Option Scheme or any other schemes of our Company shall not be counted for the purpose of calculating the Scheme Limit.

(iii) Our Company may seek separate approval of the Shareholders in general meeting for refreshing the Scheme Limit provided that such limit as refreshed shall not exceed 10% of the total number of Shares in issue as of the date of the approval of the Shareholders on the refreshment of the Scheme Limit. Options previously granted under the Share Option Scheme or any other schemes of our Company (including options outstanding, cancelled, lapsed in accordance with the terms of the Share Option Scheme or any other schemes of our Company or exercised) will not be counted for the purpose of calculating the limit as refreshed.

For the purpose of seeking the approval of Shareholders, a circular containing the information as required under the Listing Rules shall be sent by our Company to the Shareholders.

(iv) Our Company may seek separate approval of our Shareholders in general meeting for granting options beyond the Scheme Limit provided that the options in excess of the Scheme Limit are granted only to Eligible Persons specifically identified by our Company before such approval is sought and that the proposed grantee(s) and his/her close associates (or his/her associates if the proposed grantee is a connected person) shall abstain from voting in the general meeting. For the purpose of seeking the approval of the Shareholders, our Company shall send a circular to the Shareholders containing a generic description of the specified proposed grantees of such options, the number and terms of the options to be granted, the purpose of granting such options to the proposed grantees with an explanation as to how the terms of options serve such purpose and any other information as required under the Listing Rules.

(d) Maximum Entitlement of Each Eligible Person

No option shall be granted to any Eligible Person if any further grant of options would result in the Shares issued and to be issued upon exercise of all options granted and to be granted to such person (including exercised, cancelled and outstanding options) in the 12-month period up to and including such further grant would exceed 1% of the total number of Shares in issue from time to time (the ‘‘Participant Limit’’), unless:

(i) such grant has been duly approved, in the manner prescribed by the relevant provisions of Chapter 17 of the Listing Rules, by resolution of the Shareholders in general meeting, at which the Eligible Person and his/her close associates shall abstain from voting;

(ii) a circular regarding the grant has been dispatched to the Shareholders in a manner complying with, and containing the information specified in, the relevant provisions of Chapter 17 of the Listing Rules (including the identity of the Eligible Person, the number and terms of the options to be granted and options previously granted to such Eligible Person); and

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(iii) the number and terms (including the exercise price) of such option are fixed before our Shareholders’ approval is sought.

(e) Grant of Options to Connected Persons

(i) Any grant of options to any Director, chief executive, or substantial Shareholder (excluding the proposed Director or chief executive) of our Company or any of their respective associates shall be approved by the independent non-executive Directors (excluding any independent non-executive Director who is any offeree of an option) and shall comply with the relevant provisions of Chapter 17 of the Listing Rules.

(ii) Where an option is to be granted to a substantial Shareholder or an independent non- executive Director (or any of their respective associates), and such grant will result in the Shares issued and to be issued upon exercise of all options already granted and to be granted (including options exercised, cancelled and outstanding) to such person under the Share Option Scheme and any other schemes of our Company in the 12-month period up to and including the date of such grant: (1) representing in aggregate over 0.1% (or such other percentage as may from time to time be specified by the Stock Exchange) of the total number of Shares in issue from time to time; and (2) having an aggregate value, based on the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the date of each grant, in excess of HK$5 million (or such other amount as may from time to time be specified by the Stock Exchange), such grant shall not be valid unless: (aa) a circular containing the details of the grant has been dispatched to the Shareholders in a manner complying with, and containing the matters specified in, the relevant provisions of Chapter 17 of the Listing Rules (including, in particular, a recommendation from the independent non-executive Directors (excluding any independent non-executive Director who is a grantee of an option) to the independent Shareholders as to voting); and (bb) the grant has been approved by the independent Shareholders in general meeting (taken on a poll), at which the proposed grantee, his/her associates and all core connected persons of our Company shall abstain from voting in favor of the grant.

(iii) Where any change is to be made to the terms of any option granted to a substantial Shareholder or an independent non-executive Director (or any of their respective associates), such change shall not be valid unless the change has been approved by the independent Shareholders in general meeting as required under sub-paragraph (ii) above.

(f) Time of Acceptance and Exercise of an Option

An offer of grant of an option may be accepted by an Eligible Person (in whole or in part) within the date as specified in the offer letter issued by our Company, being a date not later than 21 days inclusive of, and from, the date upon which it is made, by which the Eligible Person must accept the offer or be deemed to have declined it, provided that such date shall not be more than ten years after the date of adoption of the Share Option Scheme or after the termination of the Share Option Scheme, and no such offer may be accepted by a person who ceases to be an Eligible Person after the offer has been made.

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An offer shall be deemed to have been accepted on the date when the duly signed duplicate comprising acceptance of the offer by the Eligible Person, together with a payment in favor of our Company of HK$1.00 by way of consideration for the grant thereof is delivered to our Company. Such consideration shall in no circumstances be refundable. Subject to the rules of the Share Option Scheme, an option may be exercised in wholeorinpartbythegranteeatanytimebefore the expiry of the period to be determined and notified by our Board to the grantee which in any event shall not be longer than ten years commencing on the date of the offer letter and expiring on the last day of such ten-year period.

(g) Performance Targets

There is no performance target that has to be achieved or minimum period in which an option must be held before the exercise of any option save as otherwise imposed by our Board in the relevant offer of options.

(h) Exercise Price for Shares

The exercise price of a Share in respect of any particular option granted under the Share Option Scheme shall be such price as determined by our Board, and shall be at least the highest of: (i) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the date (the ‘‘Offer Date’’), which must be a trading day, on which our Board passes a resolution approving the making of an offer of grant of an option to an Eligible Person; (ii) the average closing price of the Shares as stated in the Stock Exchange’s daily quotation sheets for the five trading days immediately preceding the Offer Date; and (iii) the nominal value of a Share on the Offer Date.

Where an option is to be granted, the date of our Board meeting at which the grant was proposed shall be taken to be the date of the offer of such option. For the purpose of calculating theexerciseprice,whereanoptionistobegranted less than five trading days after the [REDACTED], the new issue price shall be taken to be the closing price for any Business Day within the period before the [REDACTED].

(i) Ranking of Shares

The Shares to be allotted and issued upon the exercise of an option granted under the Share Option Scheme shall be subject to all the provisions of our Company’s constitutional documents for the time being in force and shall rank pari passu in all respects with the then existing fully paid Shares in issue as of the date of allotment, or if that date falls on a day on which the register of members of our Company is closed, then as of the first Business Day on which the register of members of our Company is re-opened (the ‘‘Exercise Date’’) and will entitle the holders to participate in all dividends or other distributions declared or recommended or resolved to be paid or made in respect of a record date falling on or after the Exercise Date.

(j) Restrictions on the Time of Grant of Options

No offer of an option shall be made and no option shall be granted to any Eligible Person after inside information (as defined in the Listing Rules) has come to our Board’s knowledge until our Board has announced the information pursuant to the requirements of the Listing Rules. In

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particular, no option shall be granted during the period of one month immediately preceding the earlier of (i) the date of our Board meeting (as such date is first notified to the Stock Exchange in accordance with the Listing Rules) for the approval of our Company’s results for any year, half- year, quarter or any other interim period (whether or not required under the Listing Rules); and (ii) the deadline for our Company to publish an announcement of our results for any year, half-year, quarter or any other interim period (whether or not required under the Listing Rules), and ending on the date of the results announcement.

(k) Period of the Share Option Scheme

Subject to earlier termination by our Company in general meeting or by our Board, the Share Option Scheme shall be valid and effective for a period of ten years commencing on the date of adoption of the Share Option Scheme, after which period no further option shall be granted but the provisions of the Share Option Scheme shall remain in full force and effect in all other respects. All options granted and accepted and remaining unexercised immediately prior to expiry of the Share Option Scheme shall continue to be valid and exercisable in accordance with the terms of the Share Option Scheme.

(l) Rights on Cessation of Employment

Where the grantee of an outstanding option ceases to be an Eligible Person for any reason other than his/her death or the termination of his/her contract of employment or service on one or more of the grounds specified in sub-paragraph (m) below, the grantee may exercise his/her outstanding options within three months following the date of such cessation, and any such options not exercised shall lapse and determine at the end of such three-month period.

(m) Rights on Dismissal

If the grantee of an option is an Eligible Person and ceases to be an Eligible Person by reason of a termination of his/her contract of employment or service on any one or more grounds that he/ she has been guilty of misconduct, or has committed an act of bankruptcy or has become insolvent or has made any arrangement or composition with his/her creditors generally, or has been convicted of any criminal offence involving his/her integrity or honesty, or (if so determined by our Board) on any other ground on which an employer or a company would be entitled to terminate his/her employment or directorship at common law or pursuant to any applicable laws or under the grantee’s contract of employment or service with our Company or our relevant subsidiary, his/her option (to the extent not already exercised) will lapse automatically on the date of cessation of being an Eligible Person.

(n) Rights on Death

Where the grantee of an outstanding option dies before exercising the option in full or at all, the option may be exercised in full or in part (to the extent not already exercised) by his/her personal representative(s) within 12 months from the date of death or such period extended by our Board.

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(o) Rights on a General Offer

If a general or partial offer is made to all our Shareholders (other than the offeror and/or any person controlled by the offeror and/or any personactinginassociationorconcertwiththe offeror), our Directors shall as soon as practicable notify the option holder accordingly. An option holder shall be entitled to exercise his/her outstanding options in whole or in part within 14 days of receipt of such notice. To the extent that any option has not been so exercised, it shall upon the expiry of such period lapse and determine.

(p) Rights on Winding-up

If notice is given of a general meeting of our Company at which a resolution will be proposed for the voluntary winding-up of our Company, our Company shall forthwith give notice thereof to all option holders and each option holder shall be entitled, at any time not later than two Business Days prior to the proposed general meeting of our Company to exercise his/her outstanding options in whole or in part. Our Company shall as soon as possible and in any event no later than one Business Day prior to the date of such general meeting, allot and issue such number of Shares to the option holders which fall to be issued on such exercise. Subject thereto, all options then outstanding shall lapse and determine on the date of commencement of the winding-up.

(q) Rights on Compromise or Arrangement Between Our Company and Our Creditors

If a compromise or arrangement between our Company and our members or creditors is proposed for the purposes of or in connection with a scheme for the reconstruction or amalgamation of our Company, our Company shall give notice thereof to all option holders on the same date as our Company gives notice of the meeting to our Shareholders and creditors, and thereupon each option holder shall be entitled, at any time not later than two Business Days prior to the proposed meeting of our Company, to exercise his/her outstanding options in whole or in part.

Our Company shall as soon as possible and in any event no later than one Business Day prior to the date of such general meeting, allot and issue such number of Shares to the option holders whichfalltobeissuedonsuchexercise.Subjectthereto, all options then outstanding shall lapse and determine upon such compromise or arrangement becoming effective.

(r) Reorganization of Capital Structure

In the event of any alteration in the capital structure of our Company whilst any option remains exercisable, whether by way of capitalization issue, rights issue, subdivision or consolidation of Shares or reduction or any other alteration of the share capital of our Company (other than an issue of Shares as consideration in respect of a transaction), our Company shall (if applicable) make corresponding adjustments (if any) to:

(i) the number or nominal value of Shares comprised in each option for the time being outstanding;

(ii) the exercise price;

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(iii) the Scheme Limit; and/or

(iv) the Participant Limit,

as the auditors or the independent financial advisor to our Company shall certify in writing to our Board to be in their opinion fair and reasonable, provided that:

(i) the aggregate subscription price payable by an option holder on the full exercise of any option shall remain as nearly as possible the same (but shall not be greater than) as it was before such adjustment;

(ii) no adjustment shall be made the effect of which would be to enable a Share to be issued at less than its nominal value;

(iii) no adjustment will be required in circumstances when there is an issue of Shares as consideration in a transaction; and

(iv) any adjustment shall be made in accordance with the provisions of Chapter 17 of the Listing Rules and supplementary guidance on the interpretation of the Listing Rules issued by the Stock Exchange from time to time (including but not limited to the supplemental guidance attached to the letter from the Stock Exchange dated 5 September 2005 to all issuers relating to share option schemes).

In addition, in respect of any such adjustments, other than any made on a capitalization issue, the auditors or independent financial advisor of our Company must confirm to our Directors in writing that the adjustments satisfy the requirements of the relevant provisions of the Listing Rules. The confirmation of such auditors or independent financial advisor shall (in the absence of manifest error) be final and binding on our Company and the grantees.

(s) Cancellation of Options

Our Board may cancel an option granted but not exercised with the approval of the option holder. Any such options cancelled by our Company cannot be re-granted to the same Eligible Person and the issue of new options must be made under the Share Option Scheme with available unissued options (excluding the cancelled options) within the Scheme Limit.

(t) Termination of the Share Option Scheme

Our Company, by resolution in general meeting, or our Board may at any time, terminate the operation of the Share Option Scheme and in such event, no further option will be offered. However, the provisions of the Share Option Scheme shall remain in full force and effect in all other respects. All options granted and accepted and remaining unexercised immediately prior to such termination shall continue to be valid and exercisable in accordance with their terms and the terms of the Share Option Scheme.

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(u) Rights are Personal to Grantee

An option shall be personal to the grantee and shall not be assignable or transferable, and no grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest (whether legal or beneficial) in favor of any third party over or in relation to any option. Any breach of the foregoing shall entitle our Company to cancel any outstanding option or part thereof granted to such grantee.

(v) Lapse of Option

The right to exercise an option (to the extent not already exercised) shall lapse immediately upon the earliest of:

(i) the expiry of the option period to be determined and notified by our Board to the grantee;

(ii) the expiry of the periods as referred to in sub-paragraphs (l), (n), (o), (p) and (q) respectively;

(iii) subject to sub-paragraph (p), the date of the commencement of the winding-up of our Company;

(iv) in the event the grantee is an employee or a director of our Group, the date on which the grantee ceases to be an Eligible Person by reason of the termination of his/her contract of employment or service on any one or more grounds that he/she (aa) has been guilty of misconduct; (bb) has committed an act of bankruptcy or has become insolvent or has made any arrangement or composition with his/her creditors generally; (cc) has been convicted of any criminal offence involving his/her integrity or honesty; or (dd) (if so determined by our Board) on any other ground on which an employer or a company would be entitled to terminate his/her employment or directorship at common law or pursuant to any applicable laws or under the grantee’s contract of employment or service with our Company or our relevant subsidiary; or

(v) the date on which our Directors cancel any outstanding option or part thereof on the ground the grantee commits a breach of sub-paragraph (u).

Our Company shall have no liability to any grantee for the lapsed options.

(w) Alterations to the Share Option Scheme

(i) The Share Option Scheme may be amended or altered in any respect to the extent allowed by the Listing Rules by resolution of our Board except that the following alterations must first be approved by a resolution of the Shareholders in general meeting:

(aa) the purpose of the Share Option Scheme;

(bb) the definitions of ‘‘Eligible Person,’’ ‘‘Option Period’’ and ‘‘Scheme Period;’’

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(cc) the Scheme Limit;

(dd) the Participant Limit;

(ee) the period within which the offer of grant of an option must be accepted;

(ff) the minimum period for which an option must be held before it can be exercised;

(gg) the statement as to performance targets that must be achieved before an option may be exercised;

(hh) the amount payable on acceptance of an option and the period within which it must be paid for such purpose;

(ii) the basis of determination of the exercise price;

(jj) the rights to be attached to the Shares to be issued upon the exercise of options;

(kk) the life of the Share Option Scheme;

(ll) the circumstances under which options will automatically lapse;

(mm)the adjustment made in the event of any alterations of the capital structure of our Company;

(nn) the cancellation of options granted but not exercised;

(oo) the effect on existing options of an early termination of the Share Option Scheme;

(pp) the transferability of options;

(qq) this sub-paragraph (w);

(rr) any alterations to the terms and conditions of the Share Option Scheme which are of a material nature or any change to the terms of options granted to the advantage of such option holders; and

(ss) any change to the authority of our Directors in relation to any alterations to the terms of the Share Option Scheme.

The amended terms of the Share Option Scheme or the options shall comply with Chapter 17 of the Listing Rules.

(ii) Notwithstanding the other provisions of the Share Option Scheme, the Share Option Scheme may be altered in any respect by resolution of our Board without the approval of the Shareholders or the grantee(s) to the extent such amendment or alteration is required by the Listing Rules or any guideline issued by the Stock Exchange from time to time.

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(iii) Our Company must provide to all grantees all details relating to changes in the terms of the Share Option Scheme during the life of the Share Option Scheme immediately upon such changes taking effect.

(x) Conditions

The Share Option Scheme is conditional upon:

(i) the passing of the necessary resolutions by the Shareholder(s) to approve and adopt the Share Option Scheme;

(ii) the [REDACTED] granting approval of the [REDACTED] of, and permission to deal in, the Shares in issue, the Shares to be issued pursuant to the [REDACTED] (including any Shares which may be allotted and issued pursuant to the exercise of the [REDACTED]) and the [REDACTED] and the Shares which may fall to be issued pursuant to the exercise of options to be granted under the Share Option Scheme; and

(iii) the commencement of dealings in the Shares on the Stock Exchange.

If the conditions referred to above are not satisfied on or before the date falling 30 days after the date of this document, the Share Option Scheme shall forthwith terminate and no person shall be entitled to any rights or benefits or be under any obligations under or in respect of the Share Option Scheme.

(y) Present Status of the Share Option Scheme

Application has been made to the [REDACTED] for the [REDACTED] of and permission to deal in the Shares to be allotted and issued pursuant to the exercise of options which may be granted under the Share Option Scheme. The total number of Shares which may be issued upon the exercise of the options which may be granted under the Share Option Scheme and any other scheme(s) of our Company shall not exceed [REDACTED] Shares, being 10% of the total number of Shares in issue as of the [REDACTED] (assuming the [REDACTED] is not exercised) unless our Company obtains the approval of the Shareholders in general meeting for refreshing the said 10% limit under the Share Option Scheme, provided that options lapsed in accordance with the terms of the Share Option Scheme or any other schemes of our Company will not be counted for the purpose of calculating the above-mentioned 10% limit.

As of the date of this document, no options have been granted or agreed to be granted under the Share Option Scheme.

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E. OTHER INFORMATION

1. Tax and Other Indemnities

Each of Eminent Leader, Mr. C. Y. Fong, Ms. Lucia Fong, Mr. Kenneth Fong, Ms. Emily Fong and Mr. Vincent Fong (collectively the ‘‘Indemnifiers’’) has entered into the Deed of Indemnity with and in favor of our Company (for ourselves and as trustee for each of our subsidiaries), being one of the material contracts referred to in ‘‘— B. Further Information about Our Business — 1. Summary of Material Contracts,’’ to provide indemnities on a joint and several basis in respect of, amongst other matters, the following:

(a) any and all amount of tax falling on any member of our Group (collectively the ‘‘Group Members’’ and individually a ‘‘Group Member’’) resulting from or by reference to or in consequence of (i) any income, profits, gains, transactions, events, matters or things earned, accrued, received, entered into or occurring (or deemed to be so earned, accrued, received, entered into or occurring) on or up to the date on which the [REDACTED] becomes unconditional in accordance with the conditions set out in ‘‘Structure of the [REDACTED] — Conditions of the [REDACTED]’’ (the ‘‘Effective Date’’), whether alone or in conjunction with any other circumstances whenever occurring and whether or not such tax is chargeable against or attributable to any other person, firm or company, including any and all tax resulting from the receipt by any Group Member of any amounts paid by the Indemnifiers; (ii) any change in the law or the formal/written interpretation thereof by the relevant tax authorities in any jurisdictions in which any Group Member operates that is promulgated, published and comes into force on or before the Effective Date; (iii) any act or omission of any Group Member regarding the inter-companies transactions on or before the Effective Date; and/or (iv) any transfer of any property to any Group Member or to any other person, entity or company made or deemed to have been made on or before the Effective Date;

(b) any and all amount of tax falling on any Group Member anywhere in the world resulting from any Group Member conducting our business operations in such jurisdictions on or prior to the Effective Date and shall include any costs, expenses, interests, penalties or other liabilities in connection therewith;

(c) all costs (including all legal costs), expenses, interests, penalties or other liabilities which any Group Member may reasonably and properly incur in connection with (i) the investigation, assessment or the contesting of any claim under the Deed of Indemnity; (ii) the settlement of any claim under the Deed of Indemnity; (iii) any legal proceedings in which any Group Member claims under or in respect of the Deed of Indemnity and in which judgement is given in favor of any Group Member; or (iv) the enforcement of any such settlement referred to in (ii) or judgement referred to in (iii);

(d) any and all expenses, payments, sums, outgoings, fees, demands, claims (including counter-claims), complaints, actions, proceedings, suits, litigations, arbitrations, judgments, damages, losses, costs (including but not limited to legal and other professional costs), charges, contributions, liabilities, fines, penalties (collectively the ‘‘Costs’’) in connection with any breach or non-compliance of any applicable laws, rules or regulations (whether currently in force or repealed), duties or obligations

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(whether in contract, tort or otherwise) in the Cayman Islands, the BVI, Hong Kong and/or the PRC by any Group Member on or before the Effective Date or by Migo on or before the date of its disposal which, for the avoidance of doubt, includes the non- compliance incidents disclosed in ‘‘Business — Legal Proceedings and Compliance — Compliance’’;

(e) any and all Costs which any Group Member may incur, suffer or accrue, directly or indirectly, from or on the basis of or in connection with any failure to obtain or delay in obtaining the necessary licenses, consents or permits under the laws of the Cayman Islands, the BVI, Hong Kong and/or the PRC for the valid and legal establishment and/ or operation of any Group Member’s valid and legal establishment and/or operation on or before the Effective Date or by Migo on or before the date of its disposal; and

(f) any and all Costs which any Group Member may incur, suffer or accrue, directly or indirectly, as a result of or in connection with any matters referred to in paragraphs (d) to (e) above on or before the Effective Date or the date of disposal of Migo (as the case may be).

Further, pursuant to the Deed of Indemnity, the Indemnifiers have given indemnity in respect of, amongst other matters, certain liability for estate duty in Hong Kong or any jurisdiction outside Hong Kong with equivalent or similar requirements, if any, which may become payable by any Group Member by reason of any transfer of property to any Group Member at any time on or prior to the Effective Date. Our Directors have been advised that no material liability for estate duty is likely to fall on any member of our Group in the Cayman Islands, the BVI, Hong Kong and the PRC, being jurisdictions in which the companies comprising our Group are incorporated or registered.

The Deed of Indemnity does not cover any tax claim and the Indemnifiers shall be under no liability under the Deed of Indemnity in respect of any tax, tax claim or tax related liability (‘‘such tax liability’’):

(a) to the extent that full provision or reserve has been made for such tax liability in the combined audited accounts of our Group for the years ended December 31, 2018, 2019 and2020(the‘‘Accounts Date’’), as set out in Appendix I and the unaudited accounts of the Group Members for the same period and any previous audited accounts of any Group Member (collectively, the ‘‘Accounts’’);

(b) to the extent that such tax liability would not have arisen but for some act or omission by any Group Member voluntarily effected without the prior written consent or agreement of the Indemnifiers (such consent or agreement not to be unreasonably withheld or delayed), otherwise than (i) in the ordinary course of business after the date of the Deed of Indemnity; (ii) pursuant to a legally binding commitment created on or before the Effective Date; or (iii) pursuant to any statement of intention made in this document;

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(c) for which any Group Member is primarily liable as a result of transactions entered into in the ordinary course of business after the Accounts Date;

(d) to the extent that any provision or reserve made for tax in the Accounts which is finally established to be an over-provision or an excessive reserve in which case the Indemnifiers’ liability (if any) in respect of tax shall be reduced by an amount not exceeding such over-provision or excessive reserve;

(e) to the extent that such tax liability arises or is incurred as a result of the imposition of tax as a consequence of any retrospective change in the law or the interpretation or practice thereof by the relevant authority coming into force after the date of the Deed of Indemnity or to the extent that such tax liability arises or is increased by an increase in tax rates after the date of the Deed of Indemnity with retrospective effect; and

(f) to the extent that such tax liability arises as a result of any Group Member being in breach of any provision of the Deed of Indemnity.

2. Litigation

During the Track Record Period and up to the Latest Practicable Date, neither our Company nor any of our subsidiaries was engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance is known to our Directors to be pending or threatened against our Company or any of our subsidiaries.

3. Joint Sponsors

The Joint Sponsors satisfy the independence criteria applicable to sponsors set out in Rule 3A.07 of the Listing Rules. The Joint Sponsors will receive an aggregate fee of US$1 million for acting as the sponsors for the [REDACTED].

[REDACTED]

4. Compliance Adviser

In accordance with the requirements of the Listing Rules, our Company has appointed HeungKong Capital Limited as its compliance adviser to provide advisory services to our Company to ensure compliance with Rule 3A.19 of the Listing Rules for a period commencing on the [REDACTED] and ending on the date on which our Company complies with the Listing Rules in respect of its financial results for the first full financial year commencing after the [REDACTED].

5. Preliminary Expenses

The preliminary expenses relating to the incorporation of our Company are approximately US$5,600 and are payable by our Company.

– IV-35 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. APPENDIX IV STATUTORY AND GENERAL INFORMATION

6. Promoter

Our Company does not have any promoter (as defined in the Listing Rules). Within the two years immediately preceding the date of this document, no cash, securities or other benefit has been paid, allotted or given nor are any proposed to be paid, allotted or given to any promoters in connection with the [REDACTED] and the related transactions described in this document.

7. Qualifications and Consents of Experts

The qualifications of the experts which have given opinions or advice which are contained in, or referred to in this document are as follows:

Name Qualification

Jefferies Hong Kong Limited Licensed under the SFO to conduct Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities

HSBC Corporate Finance (Hong Licensed under the SFO to conduct Type 6 Kong) Limited (advising on corporate finance) regulated activity

PricewaterhouseCoopers Certified Public Accountants under the Professional Accountants Ordinance (Chapter 50 of the Laws of Hong Kong) and Registered Public Interest Entity Auditor under the Financial Reporting Council Ordinance (Chapter 588 of the Laws of Hong Kong)

Allbright Law Offices (Shenzhen) PRC legal advisor

Conyers Dill & Pearman Cayman Islands attorney-at-law

Mr. Patrick K.C. CHONG Barrister-at-Law in Hong Kong

Cushman & Wakefield Limited Property valuer

Each of the experts named above has given and has not withdrawn its written consent to the issue of this document with the inclusion of its report, letter, opinion or summary of opinion (as the case may be) and/or references to its name included herein in the form and context in which they respectively appear.

As of the Latest Practicable Date, none of the experts named above has any shareholding interest in any member of our Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of our Group.

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8. [REDACTED]

[REDACTED]

9. Taxation of Holders of Shares

(a) Hong Kong

(i) Profits

No tax is imposed in Hong Kong in respect of capital gains from the sale of property such as the Shares. Trading gains from the sale of property by persons carrying on a trade, profession or business in Hong Kong where such gains are derived from or arise in Hong Kong from such trade, profession or business will be chargeable to Hong Kong profits tax. Gains from sales of the Shares effected on the Stock Exchange will be considered to be derived from or arise in Hong Kong. Liability for Hong Kong profits tax would thus arise in respect of trading gains from sales of the Shares realized by persons carrying on a business of trading or dealing in securities in Hong Kong. Such persons will be chargeable to Hong Kong income tax rates of 16.5% on corporations and 15.0% on individuals, unless such gains are chargeable under the respective half- rates of 8.25% and 7.5% that may apply for the first HK$2 million of assessable profits for years of assessment beginning on or after April 1, 2018.

(ii) Stamp Duty

Hong Kong stamp duty will be payable by the purchaser on every purchase and by the seller on every sale of the Shares. The duty is charged at the current rate of 0.20% of the consideration or, if higher, the fair value of the Shares being sold or transferred (the buyer and seller each paying half of such stamp duty). With effect from August 1, 2021, such rate will be increased to 0.26%. In addition, a fixed duty of HK$5 is currently payable on any instrument of transfer of shares.

(iii) Estate Duty

Estate duty has been abolished in Hong Kong by the Revenue (Abolition of Estate Duty) Ordinance 2005 which came into effect on February 11, 2006.

(b) The Cayman Islands

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands.

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Intended holders of the Shares are recommended to consult their professional advisors if they are in any doubt as to the taxation implications of subscribing for, purchasing, holding or disposing of or dealing in the Shares or exercising any rights attaching to them. It is emphasized that none of our Company, our Directors or the other parties involved in the [REDACTED] can accept responsibility for any tax effect on, or liabilities of, holders of the Shares resulting from their subscription for, purchase, holding or disposal of or dealing in the Shares or exercising any rights attaching to them.

10. Bilingual Document

[REDACTED]

In case of any discrepancies between the English language version and the Chinese language version of this document and the [REDACTED], their respective English language version shall prevail.

11. Miscellaneous

(a) Save as disclosed in this document, within the two years immediately preceding the date of this document:

(i) No commissions, discounts, brokerages or other special terms have been granted by our Group to any person (including our Directors and the persons listed in ‘‘— E. Other Information — 7. Qualifications and Consents of Experts’’) in connection with the issue or sale of any capital of our Company or any of our subsidiaries;

(ii) No commission has been paid or is payable for subscribing, agreeing to subscribe or procuring subscription or agreeing to procure subscription for any shares in or debentures of our Company; and

(b) Save as disclosed in ‘‘History, Reorganization, Development and Corporate Structure,’’ ‘‘Share Capital,’’ ‘‘[REDACTED],’’ and in this Appendix IV, within the two years preceding the date of this document, no share or loan capital of our Company or any of our subsidiaries has been issued or has been agreed to be issued fully or partly paid either for cash or for consideration other than cash.

(c) Save as disclosed in ‘‘[REDACTED]’’ and in this Appendix IV, within the two years preceding the date of this document, no share or loan capital of our Company or any of our subsidiaries is under option or is agreed conditionally or unconditionally to be put under option.

(d) No founders, management or deferred shares of our Company or any of our subsidiaries have been issued or agreed to be issued.

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(e) None of the equity and debt securities of our Company is presently listed or dealt in on any other stock exchange nor is any listing or permission to deal being or proposed to be sought.

(f) Subject to the provisions of the Companies Act, the principal register of members of our Company will be maintained in the Cayman Islands by [REDACTED] and a branch register of members of our Company will be maintained in Hong Kong by [REDACTED]. Unless our Directors otherwise agree, all transfers and other documents of title of the Shares must be lodged for registration with and registered by, our Company’s [REDACTED] in Hong Kong and may not be lodged in the Cayman Islands.

(g) Neither our Company nor any of our subsidiaries have any outstanding convertible debt securities or debentures.

(h) There is no arrangement under which future dividends are waived or agreed to be waived.

(i) There has not been any interruption in the business of our Group which may have or has had a significant effect on the financial position of our Group in the 12 months preceding the date of this document.

(j) There is no restriction affecting the remittance of profits or repatriation of capital into Hong Kong and from outside Hong Kong.

– IV-39 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION

A. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES

The documents attached to the copy of this document delivered to the Registrar of Companies in Hong Kong for registration were:

(a) a copy of each of the [REDACTED] and the [REDACTED];

(b) a copy of each of the material contracts referred to in ‘‘Appendix IV — Statutory and General Information — B. Further Information About Our Business — 1. Summary of Material Contracts’’;and

(c) the written consents referred to in ‘‘Appendix IV — Statutory and General Information — E. Other Information — 7. Qualifications and Consents of Experts.’’

B. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the offices of Robertsons at 57th Floor, The Center, 99 Queen’s Road Central, Hong Kong, during normal business hours up to and including the date which is 14 days from the date of this document:

(a) the Memorandum and Articles of Association;

(b) the Accountant’s Report and the report on the unaudited pro forma financial information from PricewaterhouseCoopers, the texts of which are set out in ‘‘Appendix I — Accountant’s Report’’ and ‘‘Appendix II — Unaudited Pro Forma Financial Information,’’ respectively;

(d) the letter from Conyers Dill & Pearman, our Company’s Cayman Islands legal advisor, summarizing the Memorandum and Articles of Association and certain aspects of the Cayman Companies Act referred to in ‘‘Appendix III — Summary of the Constitution of our Company and Cayman Islands Company Law’’;

(e) the legal opinion from Allbright Law Offices (Shenzhen), our Company’s PRC legal advisor, in respect of certain aspects of our Group;

(f) the legal opinion issued by Mr. Patrick K.C. CHONG, Barrister-at-Law in Hong Kong, in respect of certain aspects of our Group;

(g) the fair rent letter issued by Cushman & Wakefield Limited;

(h) the Cayman Companies Act;

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(i) the letters of appointment referred to in ‘‘Appendix IV — Statutory and General Information — C. Further Information About Our Directors and Substantial Shareholders — 1. Particulars of Directors’ Letters of Appointment’’;

(j) the material contracts referred to in ‘‘Appendix IV — Statutory and General Information — B. Further Information About Our Business — 1. Summary of Material Contracts’’;and

(k) the written consents referred to in ‘‘Appendix IV — Statutory and General Information — E. Other Information — 7. Qualifications and Consents of Experts.’’

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