Gelonghui 17 May, Juzhi Group (00917Haktutsfreedailyspin.HK) issue an announcementHaktutsfreedailyspinThe company intends to offer 19.704 million shares globally, 1.9704 million shares in Hong Kong, China and 17.7336 million shares in the International offering; an offering from May 17 to 22, 2024, with an expected pricing date of 23 May; the offering price will be HK $25.00-29.70 per offer share, with Haitong International as the exclusive sponsor; and the shares are expected to be listed on the main board of the Stock Exchange on May 27, 2024.

The Group is a Chinese marketing service provider focusing on the outdoor marketing of fast moving consumer goods ("FMCG"). In the course of business operation, using the extensive vending machine network with interactive marketing functions throughout China, combined with the online platform of technical support, the Group can enable target consumers to have a convenient and interesting experience when trying and obtaining the fast consumer products provided by the Group, and at the same time successfully solicit and complete the necessary interaction and feedback. Specifically, the Group develops vending machines and equips them with various modules to achieve technology-driven interactive functions that are essential for successful marketing activities, including odor emission, action recognition and voice interaction, making interactive machine marketing services possible. According to the data of Fuji Consulting, in 2023, the FMCG outdoor marketing market accounted for 6.4% of the FMCG marketing market share. The outdoor marketing market of FMCG is highly dispersed and there are many participants in the industry, which leads to fierce competition in the industry. In terms of 2023 revenue, the group is the fourth largest outdoor marketing service provider of FMCG in China, with a market share of about 1.2%, while the largest market participant has a market share of 14.3%.

The Group has entered into a cornerstone investment agreement with the Golden Lee Fortis Limited Partnership Fund ("Golden Fortis") under which, subject to certain conditions, Jinli Fortis has agreed to subscribe for or procure its designated entity to subscribe for the number of offer shares that can be purchased at a total amount of US $10 million (equivalent to approximately HK $78.2 million), subject to certain conditions. Assuming an offering price of HK $27.35 per share (the median of the indicative offering price range), Fortis will subscribe for 2.8588 million offer shares, accounting for about 14.51 per cent of the offer shares to be issued under the global offering and about 1.09 per cent of the total issued share capital of the group immediately following the completion of the global offering (assuming options granted under the share incentive scheme have not been exercised).

Assuming the offering price of HK $27.35 per share (the median of the indicative offering price range set out in this prospectus), it is estimated that the Group will receive a net income of approximately HK $465 million from the global offering. Assuming that the selling price is the median of the selling price range, the Group currently intends to use the net proceeds of 32.0% to expand the group's vending machine network and increase market penetration in the next four years; 13.0% will be used to optimize marketing services in the next four years, focusing on improving user operations and the group's service matrix 15.0% will be used to increase the brand awareness of the group, and then to further expand the brand customer base in the next three years; 20.0% will be used to strengthen the group's technical capabilities and R & D efforts in the next four years to improve operational efficiency; 10.0% will be used to seek strategic alliances and acquisitions; and 10.0% will be used for general working capital and general corporate purposes of the group.