Galaxy Payroll Group (GLXG) Registration Filing summary

Company overview and business model

• Provides payroll outsourcing, employment, and consultancy services across Hong Kong, PRC, Taiwan, and Macau, primarily serving multinational clients and global HR channels.

• Operates through a network of subsidiaries and in-country partners, with the majority of revenue generated in Hong Kong and PRC.

• Services include payroll processing, compliance, employment of record, and market research, with a focus on compliance and local expertise.

• Temporarily ceased consultancy and market research services in July 2022, with plans to restart post-IPO.

Financial performance and metrics

• FY2023 revenue: HK$31.5M (US$4.0M), down 33% from FY2022; net income: HK$9.0M (US$1.1M), down 60% from FY2022.

• Six months ended Dec 31, 2023: revenue HK$15.0M (US$1.9M), net income HK$2.1M (US$0.3M), both lower year-over-year.

• Gross profit margin declined due to higher cost of revenues and cessation of high-margin consultancy services.

• High customer concentration: top five customers accounted for 71.4% of FY2023 revenue.

• Cash and restricted cash as of Dec 31, 2023: HK$8.6M (US$1.1M); working capital negative HK$3.4M (US$0.4M).

Use of proceeds and capital allocation

• Net proceeds of ~$6.6M (assuming $4/share IPO price) to be allocated: 20% each to brand promotion, recruitment, office expansion, IT enhancement, and general working capital.

• No proceeds from the resale of 2,240,000 shares by selling shareholders.

• No current plan to pay cash dividends; future dividends subject to board discretion and available profits.