JM Group (JMG) investor relations material

Company overview and business model

• Operates as a Hong Kong-headquartered sourcing solutions provider, sourcing and wholesaling products in eight categories, including toys, sports, home goods, and personal care.

• Customers are primarily retailers, distributors, and wholesalers in the US, Hong Kong, Mexico, and Australia; suppliers are mainly manufacturers in mainland China.

• Offers value-added services such as market research, product design, packaging, and quality management to support its core sourcing and wholesale business.

• Maintains close, long-term relationships with manufacturers but does not enter into binding long-term contracts, providing flexibility but also risk.

• Revenue is highly concentrated, with the top five customers accounting for over 97% of total revenue in recent periods.

Financial performance and metrics

• Revenue increased 85.8% year-over-year to HKD221.2 million (US$28.5 million) for the year ended September 30, 2024.

• Net income for the year ended September 30, 2024 was HKD7.0 million (US$904,643), compared to a net loss of HKD26.3 million in the prior year.

• For the six months ended March 31, 2025, revenue rose 14.1% to HKD147.3 million (US$18.9 million), with net income of HKD12.4 million (US$1.6 million).

• Gross profit margin increased by 4.8% in fiscal 2024 but declined by 2.7% in the first half of fiscal 2025 due to higher costs.

• The company has a significant working capital deficit (HKD25.6 million/US$3.3 million as of March 31, 2025) and its auditor raised substantial doubt about its ability to continue as a going concern.

• Cash flow from operations improved to HKD4.8 million (US$617,403) for the six months ended March 31, 2025.

Use of proceeds and capital allocation

• Net proceeds of approximately $14.86 million (assuming no over-allotment) are planned to be allocated equally among brand promotion and marketing, recruitment of talent, strategic investments/acquisitions, and general working capital.

• Management retains flexibility in the application of proceeds and may invest unused funds in short-term, interest-bearing deposits or debt instruments.