About WING FUNG GROUP Company

As a subcontractor, we are mainly engaged in the supply and installation of mechanical ventilation and air conditioning (“mechanical ventilation and air conditioning”) systems and decoration services for buildings in Hong Kong and Macau. Total revenue for the two years ended December 31, 2016 was approximately HK$128.6 million and HK$134.4 million respectively. The revenue from the Hong Kong business accounted for about 28.0% and 66.5% of our total revenue during the performance period, while the revenue from the Macau business accounted for about 72.0% and about 33.5% of our total revenue for the same period, respectively. According to the Frost & Sullivan report, in terms of total industry revenue in 2015, we ranked 7th and 3rd in the Hong Kong and Macau mechanical ventilation and air conditioning equipment markets, with market shares of about 0.6% and 7.4% respectively. The total revenue of the mechanical ventilation and air conditioning equipment market accounted for about 9.2% and 11.5% of the total revenue of the construction services industry in Hong Kong and Macau in the same year, respectively. The main functions of mechanical ventilation and air conditioning systems include (i) mechanical ventilation, which regulates airflow in and out of the building/room by inputting treated air into the building and removing the exhaust gas; and (ii) air conditioning to control and maintain the temperature and air humidity in the building/room. During the track record, we have undertaken 21 projects in Hong Kong and Macau, 16 of which have already been completed. As of December 31, 2016, we had 5 projects on hand, and the total amount of uncompleted contracts was approximately HK$231.7 million. After the track record period and as of the last viable date, we have been awarded two new projects with a total contract value of approximately HK$42.3 million, and completed another project. Further details of the project are set out in the “Project” section of this section. Our clients mainly include main contractors and subcontractors for various building projects (including infrastructure, commercial and residential projects) in Hong Kong and Macau. We mainly obtain new contracts through customer tenders. More details about customers are set out in the “Customers” section of this section. Generally speaking, we do not keep any inventory during the performance period because materials and equipment are purchased and consumed on a project-by-project basis. During the performance period, the Group's suppliers of goods and services mainly included: (i) suppliers of air conditioning equipment and materials; (ii) suppliers of equipment and materials processing services; and (iii) suppliers of machinery leasing services. Details of suppliers are set out in the “Vendors” section of this section. When implementing projects, the Group is generally responsible for planning engineering work; arranging direct labor and subcontractors; procuring materials and equipment; supervising the project and controlling quality and ensuring compliance with customer requirements. We mainly subcontract mechanical ventilation and air conditioning system installation and decoration projects to subcontractors, and we use the expertise of our in-house engineering team to provide high-quality projects that meet customer expectations and specified schedules. More details about subcontractors are set out in the “Subcontractors” section of this section. According to the Frost & Sullivan report, the market size of mechanical ventilation and air conditioning equipment in Hong Kong is expected to increase from HK$7.3 billion in 2016 to HK$11.6 billion in 2020, with a CAGR of 12.3%. Macau's mechanical ventilation and air conditioning equipment market size is also expected to increase from MOP 1395.2 million in 2016 to MOP 2140.1 million in 2020, with a CAGR of 11.3%. Drivers of the market size of mechanical ventilation and air conditioning installations in Hong Kong and Macau include (i) increasing population density; (ii) increasing public health awareness; and (iii) increasing number of construction projects. With our industry experience, the directors believe we are capable of grasping the growth of the mechanical ventilation and air conditioning installation market in Hong Kong and Macau.