About SG GROUP HLDGS Company

We are a clothing design and procurement service provider for branded fashion retailers. Our clothing design and procurement services include: (i) design and development, involving: (a) providing an in-house design series for the exhibition to be selected by customers. (b) Tailor-made designs according to customer specifications and requirements; (c) providing design ideas and suggestions on initial designs provided by customers to improve products; (ii) identifying suppliers from approved supplier lists, which are responsible for procuring raw materials and producing clothing products for customers; (iii) production and logistics management, involving monitoring the production process of approved suppliers and arranging delivery of clothing products to customers; and (iv) quality certification, involving external inspection agencies to test clothing products and sample inspection at various stages of production. Our customers mainly include internationally renowned brands (i) fashion retailers such as Monsoon, East, Dunnes, Crew, and Long Tall Sally; and (ii) online fashion retailers, namely ASOS, Lamoda, and Zalando. Most of our major customers have confirmed that we are one of their biggest suppliers. The director believes that the description of one of the leading or largest suppliers refers to the largest supplier of women's clothing in Asia or in terms of customer procurement costs (note). We deal directly with customers and do not operate our business through any purchasing agents. During the performance period, the clothing products we purchased for our customers were women's clothing or children's clothing, and most of the revenue came from sales to UK customers, accounting for about 91.5% and 92.3% of total revenue, respectively. For the years ended April 30, 2015 and April 30, 2016, revenue was approximately HK$140.3 million and HK$158.8 million respectively, an increase of approximately 13.2%. For the year ended April 30, 2015 and April 30, 2016, profit was approximately HK$7.6 million and HK$17.5 million respectively, an increase of approximately 131.0%. We believe opening our showroom in the UK and expanding our Hong Kong showroom during our track record period will help drive our growth. Customers usually visit our showroom regularly to check out our new clothing products. Specifically, the British exhibition hall makes it easier for British customers to view the latest fashion designs, and also speeds up the overall design discussion process with customers. For example, one of our UK clients successfully launched their bridal collection, and the style was selected from our in-house designed bridal collection displayed in our UK showroom. In order to concentrate resources to provide fashion design and procurement services and reduce manufacturing and labor costs, we outsource capital and labor-intensive production processes to approved suppliers. During the track record period and until the last practical date, we have established close and stable relationships with major Chinese approved suppliers of apparel products. The directors believe that compared to manufacturers in other developing countries in Asia, Chinese manufacturers as a whole are capable of manufacturing sophisticated and high-value-added products, and Hong Kong's proximity to mainland China allows us to closely monitor the overall production process for which authorized suppliers are responsible. We have established internal guidelines and policies to manage the process of evaluating and selecting new suppliers and to monitor the continued performance of approved suppliers.