Fenbo (FEBO) Registration Filing summary

Company overview and business model

• Operates as a holding company with subsidiaries in Hong Kong and China, specializing in OEM/ODM manufacturing of personal care electric appliances, mainly hair styling products, and toys for overseas markets.

• Sole customer is Spectrum Brands, for whom it manufactures Remington-branded products sold in Europe, the US, and Latin America.

• Production capacity exceeds three million units per year, with manufacturing based in Shenzhen, China.

• Business model is highly concentrated, with 100% of revenue from a single customer and no long-term contract.

Financial performance and metrics

• FY2023 revenue was HK$119.1 million (US$15.2 million), nearly flat year-over-year.

• Net loss for FY2023 was HK$1.5 million (US$0.2 million), compared to net income of HK$8.7 million in FY2022, which was boosted by a one-off gain on property disposal.

• Gross profit margin improved to 18.6% in FY2023 from 15.7% in FY2022, due to stabilized raw material costs post-COVID.

• Cash balance as of December 31, 2023, was HK$46.3 million (US$5.9 million); working capital was HK$54.9 million (US$7.0 million).

• Accounts receivable accounted for 30.6% of total assets at year-end 2023.

Use of proceeds and capital allocation

• Net proceeds (estimated at $4.29 million if fully subscribed) will be allocated: 20% to R&D, 40% to developing own branded products, 30% to building a sales team, and 10% to working capital.

• Management has broad discretion over use of funds; proceeds may be less if the offering is not fully subscribed.