HONG KONG MEDICAL CONSULTANTS HOLDINGS LIMITED

The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility forthe contents of this Application Proof, make no representation as to its accuracy or completeness and expresslydisclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part ofthe contents of this Application Proof.

Application Proof of

HONG KONG MEDICAL CONSULTANTS HOLDINGS LIMITED(a company incorporated in the Cayman Islands with limited liability)

WARNING

The publication of this Application Proof is required by The Stock Exchange of Hong Kong Limited (the‘‘Exchange’’) and the Securities and Futures Commission (the ‘‘Commission’’) solely for the purpose of providinginformation to the public in Hong Kong.

This Application Proof is in draft form. The information contained in it is incomplete and is subject to changewhich can be material. By viewing this document, you acknowledge, accept and agree with Hong Kong MedicalConsultants Holdings Limited (the ‘‘Company’’), its sponsors, advisers or members of the underwriting syndicatethat:

(a) this document is only for the purpose of providing information about the Company to the public in HongKong and not for any other purposes. No investment decision should be based on the information contained inthis document;

(b) the publication of this document or supplemental, revised or replacement pages on the Exchange’s websitedoes not give rise to any obligation of the Company, its sponsors, advisers or members of the underwritingsyndicate to proceed with an offering in Hong Kong or any other jurisdiction. There is no assurance that theCompany will proceed with the offering;

(c) the contents of this document or supplemental, revised or replacement pages may or may not be replicated infull or in part in the actual final listing document;

(d) this Application Proof is not the final listing document and may be updated or revised by the Company fromtime to time in accordance with the Listing Rules;

(e) this document does not constitute a prospectus, offering circular, notice, circular, brochure or advertisementoffering to sell any securities to the public in any jurisdiction, nor is it an invitation to the public to makeoffers to subscribe for or purchase any securities, nor is it calculated to invite offers by the public to subscribefor or purchase any securities;

(f) this document must not be regarded as an inducement to subscribe for or purchase any securities, and no suchinducement is intended;

(g) neither the Company nor any of its affiliates, advisers or underwriters is offering, or is soliciting offers tobuy, any securities in any jurisdiction through the publication of this document;

(h) no application for the securities mentioned in this document should be made by any person nor would suchapplication be accepted;

(i) the Company has not and will not register the securities referred to in this document under the United StatesSecurities Act of 1933, as amended, or any state securities laws of the United States;

(j) as there may be legal restrictions on the distribution of this document or dissemination of any informationcontained in this document, you agree to inform yourself about and observe any such restrictions applicable toyou; and

(k) the application to which this document relates has not been approved for listing and the Exchange and theCommission may accept, return or reject the application for the subject public offering and/or listing.

If an offer or an invitation is made to the public in Hong Kong in due course, prospective investors arereminded to make their investment decisions solely based on the Company’s prospectus registered with theRegistrar of Companies in Hong Kong, copies of which will be distributed to the public during the offerperiod.

If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

HONG KONG MEDICAL CONSULTANTS HOLDINGS LIMITED

中卓醫務控股有限公司

(incorporated in the Cayman Islands with limited liability)

[REDACTED]

Number of [REDACTED] under the[REDACTED]

: [REDACTED] Shares (subject to the[REDACTED])

Number of [REDACTED] : [REDACTED] Shares (subject to reallocation)Number of [REDACTED] : [REDACTED] Shares (subject to reallocation

and the [REDACTED])[REDACTED] : HK$[REDACTED] per [REDACTED], plus

brokerage fee of 1.0%, SFC transaction levyof 0.0027%, the Stock Exchange trading feeof 0.005% and the FRC transaction levy of0.00015% (payable in full on application inHong Kong dollars and subject to refund)

Nominal Value : HK$[0.00001] per Share[REDACTED] : [.]

Sole Sponsor, [REDACTED], [REDACTED] and [REDACTED]

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take noresponsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever forany loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.

A copy of this document, having attached thereto the documents specified in the section headed ‘‘Documents Delivered to the Registrar of Companies andAvailable for Inspection’’ in Appendix VI to this document, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of theCompanies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission and theRegistrar of Companies in Hong Kong take no responsibility for the contents of this document or any other document referred to above.

The [REDACTED] is expected to be determined by agreement between the [REDACTED] (for itself and on behalf of the [REDACTED]) and our Company onthe [REDACTED]. The [REDACTED] is expected to be on or about [REDACTED], (Hong Kong time) and, in any event, not later than [REDACTED] (HongKong time) unless otherwise announced. The [REDACTED] will not be more than HK$[REDACTED] and is currently expected to be not less thanHK$[REDACTED] per [REDACTED]. If, for any reason, the [REDACTED] is not agreed between the [REDACTED] (for itself and on behalf of the[REDACTED]) and our Company on or before [REDACTED] (Hong Kong time) or such other date as announced, the [REDACTED] will not proceed and willlapse.

Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this document, including the risk factorsset out in the section headed ‘‘Risk Factors’’.

The obligations of the [REDACTED] under the [REDACTED] are subject to termination by the [REDACTED] (for itself and on behalf of the [REDACTED]) ifcertain grounds arise prior to 8:00 a.m. on the day that trading in the [REDACTED] commences on the Stock Exchange. Such grounds are set out in the sectionheaded ‘‘[REDACTED] — [REDACTED] Arrangements and Expenses — [REDACTED] — Grounds for termination’’.

The [REDACTED] have not been, and will not be, registered under the Securities Act or the securities laws of any state of the United States and may not be[REDACTED] or sold in the United States, except pursuant to an exemption from, or in transactions not subject to, the registration requirements of the SecuritiesAct. The [REDACTED] will be [REDACTED] and sold only outside the United States in offshore transactions in accordance with Regulation S under theSecurities Act.

ATTENTION

We have adopted a fully electronic application process for the [REDACTED]. We will not provide printed copies of this document or printed copiesof any [REDACTED] to the public in relation to the [REDACTED].

This document is available at the website of the Hong Kong Stock Exchange at www.hkexnews.hk and our website athttp://www.hkmedicalconsultants.com. If you require a printed copy of this document, you may download and print from the website addressesabove.

IMPORTANT

[REDACTED]

THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THEINFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ONTHE COVER OF THIS DOCUMENT.

[REDACTED]

IMPORTANT


[REDACTED]

EXPECTED TIMETABLE

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[REDACTED]

EXPECTED TIMETABLE

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[REDACTED]

EXPECTED TIMETABLE

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IMPORTANT NOTICE TO INVESTORS

This document is issued by our Company solely in connection with the [REDACTED] and the

[REDACTED] and does not constitute an [REDACTED] to sell or a solicitation of an [REDACTED]

to buy any securities other than the [REDACTED]. This document may not be used for the purpose

of, and does not constitute, an [REDACTED] to sell or a solicitation of an [REDACTED] to buy in

any other jurisdiction or in any other circumstances. No action has been taken to permit a

[REDACTED] of the [REDACTED] or the distribution of this document in any jurisdiction outside

Hong Kong. The distribution of this document and the [REDACTED] and sale of the [REDACTED]

in other jurisdictions are subject to restrictions and may not be made except as permitted under the

applicable securities laws of such jurisdictions pursuant to registration with or authorisation by the

relevant securities regulatory authorities or an exemption therefrom.

You should rely only on the information contained in this document and the [REDACTED] to

make your investment decision. We have not authorised anyone to provide you with information that

is different from the information contained in this document. Any information or representation not

included in this document must not be relied on by you as having been authorised by us, the Sole

Sponsor, the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], any of our or

their respective directors, officers, employees, agents, affiliates or advisors or any other party

involved in the [REDACTED]. Information contained in our website, located at http://www.hkmedicalconsultants.com or http://www.hk-imaging.com, does not form part of this document.

Page

Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Information About This Document and the [REDACTED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Directors and Parties Involved in the [REDACTED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Regulatory Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

History, Reorganisation and Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Relationship with Our Controlling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

CONTENTS

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Page

Continuing Connected Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

Directors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

Substantial Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179

Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

Future Plans and [REDACTED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226

[REDACTED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236

Structure of the [REDACTED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248

How to Apply for [REDACTED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257

Appendix I — Accountant’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Appendix II — Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . . . . . II-1

Appendix III — Property Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

Appendix IV — Summary of the Constitution of the Company andCayman Islands Company Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

Appendix V — Statutory and General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Appendix VI — Documents Delivered to the Registrar of Companies andAvailable for Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

CONTENTS

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This summary is intended to provide you with an overview of the information contained in thisdocument. As it is a summary, it does not contain all the information that may be important to you.You should read this document, including the appendices, in its entirety before you decide whether toinvest in the [REDACTED]. There are risks associated with any investment. Some of the particularrisks of investing in the [REDACTED] are set out in the section headed ‘‘Risk Factors’’ in thisdocument. You should read that section carefully before you decide to invest in the [REDACTED].

OVERVIEW

We are an integrated private medical services provider in Hong Kong with specialist doctorsrenowned in their respective fields of expertise, providing specialist medical services and complementedby various allied health services and medical management services. According to Frost & Sullivan, weranked sixth as a multi-specialties medical centre operator in Hong Kong with a market share ofapproximately 1.4% in terms of revenue generated from provision of specialist services (includinginternal medicine and surgery related specialist services) in 2020. We also ranked fourth in terms ofrevenue generated from provision of internal medicine specialty services amongst all private multi-specialties medical centre operators in Hong Kong, according to Frost & Sullivan.

As at the Latest Practicable Date, we operated three medical centres, which comprised of ourIntegrated Flagship Medical Centre, HKMC II and a psychiatric centre under our brand ‘‘Hong KongMedical Consultants’’, and logo ; and we operated two imaging and diagnoses centres and onelaboratory under the our sub-brand ‘‘Hong Kong Imaging and Diagnostic Centre’’, and logo

, all of which are located in Central, Hong Kong. Our clients mainly include individualsseeking high quality medical treatment from our well regarded specialists.

We are committed to delivering efficient and exemplary medical services across specialties anddisciplines. Our medical services business operates under two main service streams:

1. Specialist medical services: we provide a wide range of specialty services includingcardiology, respiratory medicine, gastroenterology & hepatology, nephrology, neurology,psychiatry, endocrinology, diabetes & metabolism, geriatric medicine, oncology, paediatricsrheumatology, dental surgery, family medicine and clinical microbiology and infection at ourMedical Centres as well as inpatient services at private hospitals in Hong Kong; and

2. Allied health services: we provide various allied health services including clinicalpsychology, speech therapy, nutritional therapy and psychological counselling at our MedicalCentres as well as imaging, diagnostic and laboratory services at our Diagnostic Centres. Wealso provide vaccination services at our Medical Centres and CVC Centres.

To a much lesser extent, we provide medical management services to certain medical practitionersin relation to administrative and operational functions. By offering medical management services toselected medical practitioners, we are able to extend and build relationships, and enhance our ability toattract and recruit specialist doctors that we believe would be able to complement our business.

As at the Latest Practicable Date, our medical team consisted of 17 specialist doctors who have asignificant amount of experience with an average of approximately 18 years of specialist qualificationand work for us on an exclusive basis, covering 14 medical specialties. We also have 13 PanelSpecialists that work for us on a non-exclusive basis, covering 11 specialties.

The following table sets out the breakdown of our revenue by service stream for the periodsindicated:

Year ended 31 March Six months ended 30 September2019 2020 2021 2020 2021

HK$’000 % HK$’000 % HK$’000 % HK$’000 % HK$’000 %(Unaudited)

Medical Services:— Specialist medical services 192,273 98.3 232,427 93.6 218,006 86.7 106,398 87.7 127,838 77.0— Allied health services(1) 12 0.0 13,137 5.3 36,483 14.5 16,246 13.4 42,120 25.3

192,285 98.3 245,564 98.9 254,489 101.2 122,644 101.1 169,958 102.3Elimination of inter-segment

revenue — — (1,768) (0.7) (7,586) (3.0) (3,647) (3.0) (6,223) (3.7)

Total Medical Services 192,285 98.3 243,796 98.2 246,903 98.2 118,997 98.1 163,735 98.6

Medical management services 3,375 1.7 4,598 1.8 4,531 1.8 2,266 1.9 2,265 1.4

Total 195,660 100.0 248,394 100.0 251,434 100.0 121,263 100.0 166,000 100.0

SUMMARY

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Note:

(1) We acquired Hong Kong Imaging in October 2019, which is part of our allied health services. Forfurther details, please see the section headed ‘‘History, Reorganisation and Corporate Structure’’.

OUR COMPETITIVE STRENGTHS

We believe that our success is mainly attributable to the following competitive strengths: (i) we areone of the leading multi-specialties medical centre operators in Hong Kong and we are able to attractand retain highly skilled medical practitioners leveraging on our strong brand name and medicalplatform; (ii) our multi-disciplinary specialist medical services enhance our brand and generatessignificant business synergy; (iii) our medical platform is under centralised management withstandardised operation procedures and stringent quality control; and (iv) we have a doctor-ledmanagement team and our healthcare professional team comprises experienced specialist doctors, nursesand allied health professionals. For further information on our competitive strengths, please see thesection headed ‘‘Business — Our Competitive Strengths’’.

OPPORTUNITIES AND STRATEGIES

We strive to continue to become one of the best specialist medical service providers in Hong Kongand we plan to take advantage of the following opportunities and implement the following strategies: (i)expand our medical team to provide a wider span of specialist medical services; (ii) recruit talentedmedical practitioners by taking advantage of the trend towards consolidation of smaller medicalpractices in Hong Kong; (iii) establish an integrated flagship medical centre, and reduce reliance andrisks associated with the rental of properties by establishing an integrated diagnostic centre; and (iv)expand our allied health services network and develop complementary services. For further informationon our opportunities and strategies, please see the section headed ‘‘Business — Opportunities andStrategies’’.

OUR BUSINESS MODEL

We mainly provide medical services to our clients through our specialist medical services andallied health services, and to a much lesser extent, we provide medical management services to certainmedical practitioners. Our services are provided at our Medical Centres and Diagnostic Centres as wellas private hospitals in Hong Kong through our professional team.

Our Services

Specialist medical services

During the Track Record Period, we have grown our business to offer a wide range of specialistmedical services under our brand. We aim to provide a full spectrum of specialist medical servicesthrough (i) clinical services provided at our Medical Centres, including tertiary care such as providingsupport and second opinions to other medical professionals for complicated conditions; and (ii) inpatientservices provided at private hospital in Hong Kong to clients that require advanced medical managementand treatments. For details of the medical specialties covered by our medical team as at the LatestPracticable Date, please see the section headed ‘‘Business — Our Services — Medical Services’’.

Allied health services

We also provide allied health services at our Medical Centres and imaging and diagnoses servicesat our Diagnostic Centres to facilitate our clients’ rehabilitation, diagnostics and other health needs. Ourallied health services mainly include clinical psychology, speech therapy, nutritional therapy,psychological counselling provided by non-doctor panel specialists at Medical Centres, and imaging anddiagnostic services provided by staff at Hong Kong Imaging. We also provide various vaccinationservices at our Medical Centres. Starting in February 2021, we also provided COVID-19 vaccinationservices at the Community Vaccination Centre at the Kowloon Bay Sports Centre (‘‘Kowloon Bay CVCCentre’’) and starting in January 2022 at the Shatin Sports Centre (‘‘Shatin CVC Centre’’ andcollectively with Kowloon Bay CVC Centre, the ‘‘CVC Centres’’); and our contract with the HongKong government to provide such services at the Kowloon Bay CVC Centre will expire in December2021 and our contract for the Shatin CVC Centre is expected to end around June 2022 depending on theon-going COVID-19 situation.

SUMMARY

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Medical management services

During the Track Record Period, we provided medical management services to certain medicalpractitioners in relation to administrative and operational functions such as clinic management,accounting and finance, human resources, central procurement of pharmaceuticals and clinical supplies,facilities and lease management, regulatory compliance, marketing and business development, medicalrecord management and information technology systems for maintaining patient and financial records.We currently provide medical management services to the HKMC Ophthalmologists.

Our Professional Team

Our professional team comprises of our medical team and allied health services team along with ateam of pharmacists, nurses and medical assistants. Our specialist medical services are provided by ourmedical team which comprises of (i) 17 specialist doctors covering 14 medical specialties and (ii) ninedoctor panel specialists covering seven specialties. Our allied health services are provided by our alliedhealth service team, which comprises of (i) four non-doctor panel specialists covering four specialties atMedical Centres; and (ii) doctors, radiologists, nurses, healthcare assistants and other technicians atHong Kong Imaging. For details, please see the section headed ‘‘Business — Our Professional Team’’.

Compensation arrangements with our Founding Doctors and Equity Partner Doctors

Of our 17 specialist doctors as at the Latest Practicable Date, five are Founding Doctors, seven areEquity Partner Doctors, and five are Employee Doctors. The compensation we pay to our specialistdoctors that are Founding Doctors and Equity Partner Doctors has had a significant impact on ourfinancial results during the Track Record Period and this is expected to continue after the[REDACTED].

During the Track Record Period, we paid no service fees to our Founding Doctors. Our FoundingDoctors were willing to accept no service fees for the medical services they provided to us because asfounding shareholders, they were willing to take up the risk and rewards of the business, and futureearnings generated by the Group. As Founding Doctors, they rely mainly on dividends distributed by usas their primary source of income. During the Track Record Period, the amount of dividends declaredthat was attributable to the Founding Doctors amounted to HK$103.1 million. Should we have paidservice fees to the Founding Doctors during the Track Record Period, our profit during the TrackRecord Period would have be substantially lower. Please see the section headed ‘‘Business — OurProfessional Team — Hypothetical Net Profit Taking into Account Market Compensation of ourFounding Doctors’’ for further information.

In contrast to our Founding Doctors, our Equity Partner Doctors’ service fees were calculated asthe difference between his/her annual fee contribution (e.g. EBITDA or Doctor Operating Profit) andhis/her committed fee contribution to us. The service fee arrangements that our Equity Partner Doctorshave with us effectively cap the potential profitability that the Group can retain from them toapproximately the total amount of Fixed Committed Fee Contributions, which was HK$9.3 million peryear (excluding Dr. Stanley Yu, who provides a Variable Committed Fee Contribution) during the TrackRecord Period; and this is expected to continue to limit our profitability attributable to them for theforeseeable future.

Please see the section headed ‘‘Business — Our Professional Team — Compensation Arrangementswith Specialist Doctors and Panel Specialists’’ for further information on our compensationarrangements. Please also see the section headed ‘‘Risk Factors — Risks Relating to Our Business —

The compensation we pay to our specialist doctors that are Founding Doctors and Equity PartnerDoctors have had, and are expected to continue to have, a significant impact on our business, financialposition and profitability’’.

New service agreements with Founding Doctors and Equity Partner Doctors

All of our Founding Doctors and Equity Partner Doctors will enter into New Service Agreementswith us, which will become effective upon the [REDACTED] to (i) extend the termination date of theirexisting service agreement to 31 March 2026 and (ii) pay us an early termination fee should theyterminate their services to us prior to 31 March 2026 or we terminate the New Service Agreements priorto 31 March 2026 upon the occurrence of any termination event caused by these doctors, including,without limitation, (a) their inability to provide medical services to our Group due to termination orsuspension of their medical licence; and (b) material breach of the terms of the New Service Agreementsresulting from their fraud, wilful default or gross negligence. The key terms of the New Service

SUMMARY

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Agreements for each of our Founding Doctors and Equity Partner Doctors, including with respect toservice fees, will remain the same as their existing service agreements, except with respect to theextended term and termination fee.

Please see the section headed ‘‘Business — Our Professional Team — New Service Agreementswith Founding Doctors and Equity Partner Doctors’’ for further information.

Pricing

Our medical services primarily include consultation fees, medication fees, treatment fees andlaboratory and diagnostic fees. Our management takes into account various factors such as (i) marketprice range charged by our competitors, (ii) operating costs, (iii) time costs and complexity of thetreatment, (iv) the type of specialty involved and (v) the level of seniority of our medical practitioners,when determining our rates chargeable to our individual clients. For our corporate clients, we may offerdiscounts for certain medical schemes and insurance companies, subject to negotiation. We generallyadopt a cost-plus basis of our cost in providing medical management services.

OUR CLIENTS AND SUPPLIERS

During the Track Record Period, our clients primarily consisted of individual clients and corporateclients for our medical services, and medical practitioners for our medical management services. For theyear ended 31 March 2019, our single largest client was an individual patient and the revenue generatedfrom this patient was HK$8.1 million, representing 4.2% of our total revenue during the year. For theyear ended 31 March 2020, our single largest client was an insurance provider, and the revenuegenerated from this corporate client was HK$8.2 million, representing 3.3% of our total revenue duringthe year. For the year ended 31 March 2021, our single largest client was an insurance provider, and therevenue generated from this corporate client was HK$8.9 million, representing 3.5% of our total revenueduring the period. For the six months ended 30 September 2021, our single largest client was aninsurance company, and the revenue from this corporate client was HK$3.9 million, representing 2.4%of our total revenue during the period. For the years ended 31 March 2019, 2020 and 2021 and the sixmonths ended 30 September 2021, revenue from our five largest clients, included individual andcorporate clients, and doctors that we provided medical management services to, amounted to HK$16.9million, HK$18.0 million, HK$18.9 million and HK$9.0 million, respectively, representing 8.7%, 7.3%,7.5% and 5.4% of our total revenue, respectively.

During the Track Record Period, our suppliers mainly consisted of pharmaceutical distributors andlaboratories and imaging centres located in Hong Kong. For the years ended 31 March 2019, 2020 and2021 and the six months ended 30 September 2021, purchases from our single largest supplier, whichwas a provider of pharmaceutical products, amounted to HK$15.8 million, HK$20.1 million, HK$20.8million and HK$12.8 million, respectively, representing 33.9%, 33.4%, 35.9% and 41.3% of our totalpurchase costs, respectively. For the years ended 31 March 2019, 2020 and 2021 and the six monthsended 30 September 2021, purchases from our five largest suppliers amounted to HK$37.1 million,HK$47.0 million, HK$49.1 million and HK$26.9 million, respectively, representing 79.6%, 78.1%,84.8% and 86.4% of our total purchase costs, respectively.

RISK FACTORS

Our Directors believe there are certain risks involved in our operations, which may be broadlycategorised into (a) risks relating to our business, (b) risks relating to our industry, and (c) risks relatingto the [REDACTED] and Shares. A detailed discussion of the risk factors that we believe areparticularly relevant to us is set out in the section headed ‘‘Risk Factors’’. Set out below are some of themajor risks that investors should be aware of: (i) we are dependent on our professional team of specialistdoctors and our ability to attract and retain skilled and qualified healthcare professionals; (ii) thecompensation we pay to our specialist doctors that are Founding Doctors and Equity Partner Doctorshave had, and are expected to continue to have, a significant impact on our business, financial positionand profitability; (iii) we rely on our brand and reputation within the healthcare service industry in HongKong, which may be adversely affected by malpractice claims and negative publicity; (iv) our businesshas been and is likely to be adversely affected by the outbreak of COVID-19, and may be affected byother communicable diseases in the future; and (v) our financial statements during the Track RecordPeriod may not be easily comparable and past performance is not necessarily indicative of future results.

FINANCIAL AND OPERATIONAL INFORMATION

The following table sets out selected financial data from our consolidated statements ofcomprehensive income during the Track Record Period, details of which are set out in the Accountant’sReport in Appendix I to this document. Our historical results presented below are not necessarilyindicative of the results that may be expected for any future period. Please see the section headed‘‘Financial Information — Results of Operation of Our Group’’ for further information.

SUMMARY

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Year ended 31 MarchSix months ended30 September

2019 2020 2021 2020 2021HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Revenue 195,660 248,394 251,434 121,264 166,000Cost of sales (111,145) (172,814) (185,504) (86,731) (125,998)

Gross profit 84,515 75,580 65,930 34,533 40,002

Other loss — — — — (963)Selling and marketing expenses (913) (1,212) (2,328) (1,431) (746)Administrative expenses (6,747) (16,421) (36,371) (16,489) (15,339)Provision for impairment losses

on financial assets (4,622) (150) (200) — 55

Operating profit 72,233 57,797 27,031 16,613 (23,009)

Finance (costs)/income, net (614) 1,385 (242) 354 (2,725)

Profit before income tax 71,619 59,182 26,789 16,967 (20,284)

Income tax expenses (11,659) (9,489) (6,396) (3,687) (4,630)

Profit for the period 59,960 49,693 20,393 13,280 15,654

Profit attributable to:Owners of the Company 59,960 50,194 21,643 13,869 15,270Non-controlling interests — (501) (1,250) (589) 384

Profit for the period 59,960 49,693 20,393 13,280 15,654

Revenue

Our revenue increased from HK$195.7 million for the year ended 31 March 2019 to HK$248.4million for the year ended 31 March 2020. The increase in our revenue was primarily due to the increasein revenue generated from specialist medical services.

Our revenue generated from the provision of services by specialists increased by HK$40.1 million,or 20.9%, from HK$192.3 million for the year ended 31 March 2019 to HK$232.4 million for the yearended 31 March 2020, which was primarily due to increase in patient visits/admissions. The increase inpatient visits/admissions was primarily driven by the full-year service contribution from the five EquityPartner Doctors in FY2020 that joined at various dates during FY2019; coupled with the fact that Dr.Eddie Cheung (paediatrics) joined us as a doctor in August 2019.

Our revenue increased from HK$248.4 million for the year ended 31 March 2020 to HK$251.4million for the year ended 31 March 2021. The increase in our revenue was primarily due to the increasein revenue generated from allied health services, partially offset by a decrease in revenue from specialistmedical services. Our revenue generated from the provision of services by specialists decreased byHK$14.4 million, or 6.2%, from HK$232.4 million for the year ended 31 March 2020 to HK$218.0million for the year ended 31 March 2021, which was primarily due a slight decrease in patient visits/admissions coupled with lower average revenue per patient visit/admission. The decrease in patientvisits/admissions was primarily driven lower number of patient visits/admissions for Dr. Kenneth Tsang(respiratory medicine), Dr. Adam Leung (cardiology), Dr. Jason Fong (neurology), Dr. Clement Lee(cardiology), Dr. Mathew Ng (gastroenterology & hepatology) and Dr. Ada Ma (oncology) because ofthe COVID-19 outbreak along with the related delays in seeking non-urgent medical treatment; partlyoffset by increased patient visits/admission because Dr. Eddie Cheung (paediatrics) joined us in August2019 and Dr. Stanley Yu (oncology) joined us in August 2020. Overall average revenue per patientvisit/admission decreased from HK$5,661 for the year ended 31 March 2020 to HK$5,364 for yearended 31 March 2021 mainly because (i) Dr. Eddie Cheung’s average revenue per patient is substantiallylower than other specialist doctors and (ii) change in service mix, with a lower proportion of in-patienthospital admissions which generally have a higher revenue per admission.

Our revenue increased from HK$121.3 million for the six months ended 30 September 2020 toHK$166.0 million for the six months ended 30 September 2021. The increase in our revenue wasprimarily due to (i) the addition of three new Employee Doctors coupled with an increase in patientvisits due to the recovery from the COVID-19 pandemic; (ii) revenue generated from COVID-19vaccination services at the Kowloon Bay CVC Centre; and (iii) an increase in revenue from provision ofimaging services.

SUMMARY

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Gross Profit

Our gross profit decreased by HK$8.9 million, or 10.6%, from HK$84.5 million for the year ended31 March 2019 to HK$75.6 million for the year ended 31 March 2020 primarily due to increased servicefees provided to our Equity Partner Doctors. Our gross profit margin decreased from 43.2% in FY2019to 30.4% in FY2020 mainly due to the addition of the five Equity Partner Doctors, starting in FY2019,which resulted in greater service fees paid to them. Under their service agreements with us, the EquityPartner Doctors contributed only a fixed amount to our profit before tax during the Track Record Period.Please see the section headed ‘‘Business — Our Professional Team — Compensation Arrangements withSpecialist Doctors and Panel Specialists’’ for further details.

Our gross profit decreased by HK$9.7 million, or 12.8%, from HK$75.6 million for the year ended31 March 2020 to HK$65.9 million for the year ended 31 March 2021 primarily due to (i) lowerrevenue from specialist medical services as a result of COVID-19 outbreak as discussed above and (ii)increased cost of sales, including employee benefit expenses, depreciation and medical reporting fees.Our gross profit margin decreased from 30.4% in the year ended 31 March 2020 to 26.2% in the yearended 31 March 2021 mainly due to lower revenue from specialist medical services while we incurredgreater fixed costs such as employment benefit expenses and depreciation expenses as a percentage ofrevenue.

Our gross profit increased by HK$5.5 million, or 15.8%, from HK$34.5 million for the six monthsended 30 September 2020 to HK$40.0 million for the six months ended 30 September 2021 primarilydue to increase in hospital income and revenue from COVID-19 vaccination services at the KowloonBay CVC Centre.

Operating Profit

Our operating profit decreased by HK$14.4 million, or 20.0%, from HK$72.2 million for the yearended 31 March 2019 to HK$57.8 million for the year ended 31 March 2020 driven by lower grossprofit as a result of increased service fees paid to our Equity Partner Doctors coupled with greateradministrative expenses to support our business growth. In addition, we recorded an operating loss fromour allied health services segment for the year ended 31 March 2020 of HK$2.4 million due to lossesfrom Hong Kong Imaging, which we acquired in October 2019, due to a slow down of its business fromthe COVID-19 outbreak coupled with higher repair and maintenance cost for diagnostic equipment. Ouroperating profit margin decreased from 36.9% for the year ended 31 March 2019 to 23.3% for the yearended 31 March 2020, mainly due to lower gross profit margins as a result of service fees paid to ourEquity Partner Doctors and increased administrative expenses as discussed above.

Our operating profit decreased by HK$30.8 million, or 53.2%, from HK$57.8 million for the yearended 31 March 2020 to HK$27.0 million for the year ended 31 March 2021 driven by lower grossprofit as a result of lower revenues due to the COVID-19 outbreak coupled with greater administrativeexpenses for the [REDACTED] and to support our business growth. We recorded an operating loss fromour allied health services segment of HK$1.8 million for the year ended 31 March 2021. Accordingly,our operating profit margin decreased from 23.3% for the year ended 31 March 2020 to 10.8% for theyear ended 31 March 2021.

Our operating profit increased by HK$6.4 million, or 38.5%, from HK$16.6 million for the sixmonths ended 30 September 2020 to HK$23.0 million for the six months ended 30 September 2021 wasmainly driven by an increase in gross profit and decreased [REDACTED] expenses.

Profit for the year/period

Changes in our net profit during the Track Record Period were mainly driven by changes inoperating profit as discussed above. Our net profit for the year ended 31 March 2020 and the year ended31 March 2021 included net losses attributable to non-controlling interests of HK$0.5 million andHK$1.3 million, respectively. These net losses related to minority interest held under our subsidiary,HKID Limited, which operates our imaging and diagnostic business.

SUMMARY

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The following table sets out our condensed consolidated balance sheet as at the dates indicated:

As at 31 MarchAs at

30 September20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

Total non-current assets 27,457 56,766 298,262 295,970

Inventories 7,935 10,112 12,351 10,860Trade receivables 16,099 16,107 19,108 19,693Other receivables, deposits and prepayments 847 5,852 10,347 12,238

Amounts due from shareholders 137,143 36,116 4,145 5,199Amounts due from directors 27,130 51,535 1,600 2,361Amount due from the ultimate holding company 20 36 4 5Amount due from the immediate holding company 10 18 — —Income tax recoverable — 336 849 128Cash and cash equivalents 39,771 159,860 95,267 112,645

Total current assets 228,955 279,972 143,671 163,129

Total assets 256,412 336,738 441,933 459,099

Total non-current liabilities 10,491 10,292 76,620 139,466

Trade payables 5,444 6,307 6,111 6,148Contract liabilities 411 431 2,947 375Accruals and other payables 8,081 19,262 25,077 29,757Lease liabilities 7,349 15,327 17,551 19,290Provision of re-instatement costs for leaseholdimprovements — — 2,101 1,007

Amount due to a shareholder 279 — — —Amount due to a related company 100 — — —Dividend payable — 66,720 — —Bank borrowing — — 75,000 8,199Current income tax payable 8,304 3,943 496 1,311

Total current liabilities 29,968 111,990 129,283 66,087

Total liabilities 40,459 122,282 205,903 205,553

Net current assets 198,987 167,982 14,388 97,042

Capital and reserves attributable to equity holders ofthe Company 215,953 209,944 232,768 249,900

Non-controlling interests — 4,512 3,262 3,646

Net assets/Total equity 215,953 214,456 236,030 253,546

Total non-current assets and liabilities significantly increased from 31 March 2020 to 31 March2021 mainly due to the acquisition of the 6th floor of Euro Trade Centre (i.e. the Integrated DiagnosticCentre) on 31 March 2021 and the new lease of the entire 9th floor of Central Building (i.e. theIntegrated Flagship Medical Centre) in February 2021. Net current assets decreased from HK$168.0million as at 31 March 2020 to HK$14.4 million as at 31 March 2021 primarily due to cash used andbank borrowing for the acquisition of offices for the Integrated Diagnostic Centre. Changes to our netassets during the Track Record Period were mainly due to the changes of reserves as a result of Pre-[REDACTED] Investments and increased retained earnings due to net profits partly offset by dividendpayments. Non-controlling interests represent minority shareholding interest held under HKID Limited.Our net current assets increased from HK$14.4 million as at 31 March 2021 to HK$97.0 million as at 30September 2021 mainly due to cash generated from operations and the shift of short-term bankborrowings to long-term bank borrowings. Please see the section headed ‘‘Financial Information —Description of Selected Consolidated Statement of Financial Position Items’’ for further information.

SUMMARY

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NUMBER OF CLIENT VISITS/ADMISSIONS AND AVERAGE REVENUE

The table below sets out the key operational information of our Group during the Track RecordPeriod:


2019 2020 2021 2020 2021

Number of patient visits/admissionsClinical services provided at our Medical Centres 28,505 33,048 32,490 15,966 18,370Inpatient services provided at private hospitals 5,477 8,013 8,156 3,836 5,050Allied health services provided at our Medical

Centres and Diagnostic Centres(1) 10 7,794 19,453 7,239 8,653

Total 33,992 48,855 60,099 27,041 32,073


2019 2020 2021 2020 2021

HK$ HK$ HK$ HK$ HK$(Unaudited)

Average revenue per patient visit/admission(2)

Clinical services provided at our Medical Centres 3,598 4,253 4,241 4,270 4,363Inpatient services provided at private hospitals 16,380 11,465 9,837 9,965 9,442Allied health services provided at our Medical

Centres and Diagnostic Centres 1,200 1,686 1,875 2,244 2,578

Notes:

(1) We acquired Hong Kong Imaging in October 2019 which led to the significant increase in patient visits for the years ended31 March 2020 and 2021.

(2) Average revenue per visit is calculated by dividing the revenue generated from the particular category of service by the totalnumber of patient visits/admissions under the same category.

Changes to our average revenue per patient visit/admission during the Track Record Period wereprimarily due to changes in type of specialist medical services provided as well as the addition ofspecialist doctors that joined us during the period which affected the mix of services and fees charged.For further information, please see the section headed ‘‘Business — Our Services — Medical Services— Operational Information’’.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets out selected cash flow data from the consolidated statements of cash flowsfor the periods indicated:

Year ended 31 March

Six monthsended

30 September20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

Operating cash flow before changes in working capital 87,889 79,296 55,722 43,183Changes in working capital (8,735) 10,385 (29) 8,489Income taxes paid (8,260) (15,343) (11,589) (2,438)

Net cash generated from operating activities 70,894 74,338 44,104 49,234

Net cash used in investing activities (34,507) (62,115) (177,753) (25,305)Net cash (used in)/generated from financing activities (10,722) 107,866 69,056 (6,551)

Net increase/(decrease) in cash and cash equivalents 25,665 120,089 (64,593) 17,378Cash and cash equivalents at beginning of

the period 14,106 39,771 159,860 95,267

Cash and cash equivalents at end of the period 39,771 159,860 95,267 112,645

SUMMARY

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For the year ended 31 March 2020, we had net cash generated from financing activities ofHK$107.9 million, which primarily consisted of [REDACTED] of HK$125.0 million from issuance ofshares to our Pre-[REDACTED] Investors, partially offset by the principal and interest payments oflease liabilities of HK$15.4 million. The decrease in net cash generated from operating activities for theyear ended 31 March 2021 as compared the same period in 2020 was mainly due to lower profit for theyear; and the increase in net cash used in investing activities for the year ended 31 March 2021 wasprimarily due to the acquisition offices for the Integrated Diagnostic Centre.

Please see the section headed ‘‘Financial Information — Liquidity and Capital Resources’’ forfurther information.

KEY FINANCIAL RATIOS

As at/Year ended 31 March

As at/Six months

ended30 September

20212019 2020 2021

Profitability ratiosGross profit margin (%) 43.2 30.4 26.2 24.1Net profit margin (%) 30.6 20.0 8.1 9.4Return on equity (%) 48.6 23.3 9.6 N/AReturn on total assets (%) 38.3 16.9 5.6 N/A

Liquidity ratiosCurrent ratio (times) 7.6 2.5 1.1 2.5Quick ratio (times) 7.4 2.4 1.0 2.3

Capital adequacy ratiosGearing ratio (%) 7.9 10.5 71.2 64.9

The decreases to our gross profit margin during the Track Record Period were primarily due to theaddition of Equity Partner Doctors and greater service fees paid to them as they generally onlycontribute a fixed amount to our profit before tax, and for the year ended 31 March 2021, greater fixedcost such as employment benefit expenses and depreciation expenses. The decreases in our net profitmargin during the Track Record Period were mainly driven by decreases in gross profit margin asdiscussed above as well as higher administrative expenses, and particularly [REDACTED] expenses forthe year ended 31 March 2021.

The decreases to the return on equity and return on assets during the Track Record Period wereprimarily due to decreases in net profit coupled with a general increase in total equity and total assets asa result of Pre-[REDACTED] Investments and new lease of the Integrated Flagship Medical Centre, andthe acquisition of offices for the Integrated Diagnostic Centre during the year ended 31 March 2021.

The decreases to the current and quick ratios from 31 March 2019 to 31 March 2020 wereprimarily due to a significant increase in current liabilities mainly due to dividends payable and accrualsfor service fees and lease liabilities as a result of business growth. These ratios decreased from 31March 2020 to 31 March 2021 mainly due to increase in short-term bank borrowing for the acquisitionof offices for the Integrated Diagnostic Centre, partly offset by the settlement of dividend payablesduring the year ended 31 March 2021.

The increases to the gearing ratio during the Track Record Period were primarily driven byincreased lease liabilities, particularly for the Integrated Flagship Medical Centre, and increased bankborrowings for the purchase of offices for Integrated Diagnostic Centre.

Please see the section headed ‘‘Financial Information — Key Financial Ratios’’ for calculationformula of key financial ratios and further information.

DIVIDENDS

During the Track Record Period, we declared a dividend in the amount of HK$66.7 million inFebruary 2020, which was subsequently paid in April 2020, and we declared an additional dividend ofHK$60.0 million in October 2020 (collectively the ‘‘TRP Dividend’’), all of which were settled as at 31March 2021. In December 2021, we further declared a dividend of HK$20.4 million (the ‘‘SpecialDividend’’ and collectively with the TRP Dividend, the ‘‘Pre-[REDACTED] Dividends’’), which isexpected to be settled prior to the [REDACTED]. We do not have any fixed dividend policy or dividendpay-out ratio to be adopted after the [REDACTED]. Any dividends to be declared by the Company after

SUMMARY

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the [REDACTED] will be determined at the discretion of our Directors. Our Directors may recommendor declare dividends in the future after taking into account the Group’s operating performance and cashflows over the preceding year, operating plans moving forward, planned capital expenditures, as well asother use of funds that may affect or are deemed relevant to the Group’s financial position. The dividenddistribution record in the past may not be used as a reference or basis to determine the level ofdividends that may be declared or paid by the Company in the future. Please see the section headed‘‘Financial Information — Dividends and Dividend Policy’’ for further information.

PROPERTY INTERESTS AND PROPERTY VALUATION

Knight Frank Petty Limited, an independent property valuer, has valued our property interests as at30 September 2021 and is of the opinion that the total market value of the property in which we had aninterest as at such date was HK$165.0 million and the attributable market value to us was HK$165.0million. The full text of the letter and summary disclosure of property valuation with regard to ourproperty interests are set out in ‘‘Appendix III — Property Valuation Report’’ to this document.

OUR CONTROLLING SHAREHOLDERS

Immediately following the [REDACTED] and the [REDACTED] (without taking into account anyShares which may be allotted and issued pursuant to the exercise of the [REDACTED] or any optionswhich may be granted under the Share Option Scheme), our Company will be directly owned as to[REDACTED]% by CHG, which is in turn owned as to 42.42% by Peak Summit (a company whollyowned by Dr. Kenneth Tsang), 23.74% by Heroic Wealth (a company wholly owned by Dr. AdamLeung), 10.74% by Mastermind Intelligence (a company wholly owned by Dr. Jason Fong), 2.46% byGrateful Mind (a company wholly owned by Dr. Chu Leung Wing), 6.54% by Property Linkage (acompany wholly owned by Dr. Jenny Tsang), 9.10% by Wealth Basin (a company wholly owned by Mr.Shiu) and 5.00% by Les Trois (a company wholly owned by Mrs. Chen), respectively. On 23 October2020, CHG, Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing, Dr. JennyTsang, Mr. Shiu and Mrs. Chen, together with Peak Summit, Heroic Wealth, Mastermind Intelligence,Grateful Mind, Property Linkage, Wealth Basin and Les Trois entered into the Concert Party Deed,confirming, among others, that they have been acting and will continue to act in concert with each otherto obtain and/or to consolidate effective control of our Group. Accordingly, CHG, Dr. Kenneth Tsang,Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing, Dr. Jenny Tsang, Mr. Shiu, Mrs. Chen, PeakSummit, Heroic Wealth, Mastermind Intelligence, Grateful Mind, Property Linkage, Wealth Basin andLes Trois are a group of our Controlling Shareholders. For further details, please refer to the sectionheaded ‘‘Relationship with Our Controlling Shareholders — Controlling Shareholders of Our Company’’in this document.

PRE-[REDACTED] INVESTMENTS

Our Group entered into agreements with the Pre-[REDACTED] Investors in five tranches, whichwere completed on 31 March 2019, 23 August 2019, 30 October 2019, 1 August 2020 and 27 August2020 (together with a supplemental agreement dated 15 September 2020), respectively. The Pre-[REDACTED] Investments involved a total of 18 Pre-[REDACTED] Investors in five tranches. TheTranche 1 Pre-[REDACTED] Investors are companies beneficially owned by individuals who are allIndependent Third Parties. The Tranche 2 Pre-[REDACTED] Investor is a company beneficially ownedby Dr. Eddie Cheung, a specialist in paediatrics and an Equity Partner Doctor. The Tranche 3 Pre-[REDACTED] Investors are Dr. Ooi Gaik Cheng, Ms. Tang Wan Yin, Mr, Lo Wai Keung, Peter, Dr.Lau Chu Pak and Dr. Liu Chi Leung, who are a specialist in radiology, a registered radiographer(diagnostic), a practising solicitor of Hong Kong, a specialist in cardiology and a specialist in generalsurgery, respectively. The Tranche 4 Pre-[REDACTED] Investors are companies beneficially owned byDr. Stanley Yu, a specialist in oncology, and Dr. Michele Yuen, a specialist in endocrinology, diabetesand metabolism, respectively. Both Dr. Stanley Yu and Dr. Michele Yuen are Equity Partner Doctors.The Tranche 5 Pre-[REDACTED] Investor is a company beneficially owned by Mr. Li Kai Sing, Mr.Hong Ching Wei and Mr. Yeung Wan Yiu. Among these 18 Pre-[REDACTED] Investors, each of Dr.Ooi Gaik Cheng and Ms. Tang Wan Yin is a core connected person of our Company and the remainingones are Independent Third Parties.

Upon [REDACTED], the Pre-[REDACTED] Investors will be interested in approximately[REDACTED]% of the issued share capital of our Company. For further details, please refer to thesection headed ‘‘History, Reorganisation and Corporate Structure — The Pre-[REDACTED]Investments’’ in this document.

SUMMARY

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THE SHARE OPTION SCHEME

Pursuant to the written resolutions of our Shareholders on [.], we have conditionally adopted theShare Option Scheme, which will be effective upon [REDACTED]. As at the date of this document, nooption had been granted by our Company under the Share Option Scheme. The principal terms of theShare Option Scheme are set out in the section headed ‘‘Statutory and General Information — G. ShareOption Scheme’’ in Appendix V to this document.

[REDACTED] STATISTICS

The statistics below are based on the assumption that [REDACTED] [REDACTED] are issuedunder the [REDACTED]:

Based on the low end of theindicative [REDACTED] ofHK$[REDACTED] per

[REDACTED]

Based on the high end of theindicative [REDACTED] ofHK$[REDACTED] per

[REDACTED]

Market capitalisation of our Shares(1) HK$[REDACTED] million HK$[REDACTED] millionUnaudited pro forma adjusted consolidated net tangible

asset value per Share(2) HK$[REDACTED] HK$[REDACTED]

Notes:

(1) The calculation of market capitalisation is based on [REDACTED] Shares expected to be in issue immediately uponcompletion of the [REDACTED] and the [REDACTED] (assuming the [REDACTED] is not exercised).

(2) For details of the bases and assumptions, please see ‘‘Unaudited Pro Forma Financial Information’’ in Appendix II to thisdocument. No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of the Groupto reflect any trading results or other transactions of the Group entered into subsequent to 30 September 2021.

[REDACTED] EXPENSES

Assuming that the [REDACTED] is not exercised, the [REDACTED] expenses in relation to the[REDACTED] (including [REDACTED] fees, professional fees and other fees) are estimated to beHK$[REDACTED] million (based on the mid-point of the indicative [REDACTED] for the[REDACTED]), of which approximately HK$[REDACTED] million and HK$[REDACTED] millionwere charged to the consolidated statements of comprehensive income for the year ended 31 March 2021and the six months ended 30 September 2021, respectively. We expect that approximatelyHK$[REDACTED] million will be further charged to the consolidated statements of comprehensiveincome for the year ending 31 March 2022 and HK$[REDACTED] million will be accounted for as adeduction from equity upon completion of the [REDACTED].

Our [REDACTED] expenses as a percentage of [REDACTED] (assuming the mid-point of theindicative [REDACTED] for the [REDACTED] of HK$[REDACTED] per [REDACTED] and the[REDACTED] is not exercised) is estimated to be approximately [REDACTED]%.

[REDACTED]

The aggregate [REDACTED] that we expect to receive from the [REDACTED] will beapproximately HK$[REDACTED] million (assuming an [REDACTED] of HK$[REDACTED] per[REDACTED], being the mid-point of the indicative [REDACTED] range of HK$[REDACTED] toHK$[REDACTED] per Share), after deducting [REDACTED] fees and estimated expenses payable by usin connection with the [REDACTED] and assuming the [REDACTED] is not exercised. We currentlyintend to use such [REDACTED] for the following purposes:

1. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for theestablishment of an integrated diagnostic centre (‘‘Integrated Diagnostic Centre’’),including (i) the repayment of the mortgage loan relating to the Property Purchase, (ii) thepurchase of new equipment, and (iii) the hiring of a few doctors and other necessary supportstaff to operate this centre;

2. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used to repay bankloans to replenish and restore the Group’s cash resources used for or associated with theProperty Purchase (including the purchase price, stamp duties and real estate commissions);

3. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for thedevelopment of a main integrated medical centre (‘‘Integrated Flagship Medical Centre’’),including (i) for its renovation, (ii) the purchase of new equipment, and (iii) the hiring ofdoctors and other necessary support staff;

SUMMARY

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4. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for theestablishment of a new oncology centre under our brand (‘‘HKMC Oncology Centre’’),including the hiring of a couple new doctors and several support staff, and entering into anew lease agreement with GFA of approximately 5,000 sq.ft. in Central, Hong Kong;

5. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for theestablishment of a new dental centre under our brand (‘‘HKMC Dental Centre’’), includingthe hiring of a couple new dentists and several support staff, and entering into a new leaseagreement with GFA of approximately 1,500 sq.ft. in Central, Hong Kong;

6. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for theestablishment of a new dermatology centre under our brand (‘‘HKMC SKIN Centre’’),including the hiring of a few dermatologists and several support staff, and entering into anew lease agreement with GFA of approximately 1,500 sq.ft. in Admiralty or Central, HongKong; and

7. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for workingcapital and general corporate purpose.

Further information on the use of [REDACTED] from the [REDACTED] is discussed in thesection headed ‘‘Future Plans and [REDACTED]’’.

RECENT DEVELOPMENTS AND MATERIAL ADVERSE CHANGE

Subsequent to the Track Record Period and up to the Latest Practicable Date, our revenues fromour Medical Centres, inpatient services provided at private hospitals and from Hong Kong Imagingremained stable. Save for estimated [REDACTED] expenses of HK$[REDACTED] million as discussedabove, the Directors confirm that there has been no material adverse change in the financial or tradingposition of our Group since 30 September 2021 and up to the Latest Practicable Date and no event hadoccurred since 30 September 2021 that would materially and adversely affect the information in theAccountant’s Report included in Appendix I to this document.

In June 2021, we relocated our HKMC I, HKMC III, HKMC Geriatric Medicine Centre andHKMC Paediatric Centre to our Integrated Flagship Medical Centre at suite 901, Central Building, 1–2Pedder Street, Central, Hong Kong.

In June 2021, one of our Employee Doctors, Dr. David But, tendered his resignation ofemployment with us, and his last employment date with us was in September 2021. Our Directorsconsidered that his resignation will not have any significant impact on our business.

In August 2021, one of our Equity Partner Doctors, Dr. Ada Ma, tendered her resignation ofemployment with us and was on leave since 1 August 2021. Her last employment date with us isexpected to be in January 2022. Dr. Ada Ma contributed a Fixed Committed Fee Contribution of onlyHK$0.7 million, HK$1.5 million, HK$1.5 million and HK$0.8 million to our profit before tax for theyears ended 31 March 2019, 2020 and 2021 and the six months ended 30 September 2021, respectively,and our Directors considered that her resignation will not have any significant impact to our business.

In September 2021, we engaged a specialist doctor in cardiology as an employee that is expectedto join us starting in February 2022. This specialist doctor is entitled to a fixed salary, plus incentiveprofit sharing (if any) which increases progressively from 25% to 50% based on different thresholds.

In October 2021, we engaged a specialist doctor in gastroenterology & hepatology as an employeethat joined us in November 2021. The specialist doctor is entitled to a fixed salary, plus incentive profitsharing (if any) which increases progressively from 25% to 50% based on different thresholds.

In December 2021, we engaged a doctor in general practice as a panel specialist that is expected tojoin us starting in January 2022. This panel specialist is entitled to a fee splitting arrangement wherebyhe shall be entitled to 70% of all medical income.

In December 2021, we engaged a specialist doctor in oncology as an employee that is expected tojoin us starting in February 2022. This specialist doctor is entitled to a fee splitting arrangementwhereby she shall be entitled to the higher of: (i) 70% for all out patients consultation fee, radio-therapyprocedures and related fees, consultation fee and any medical service fees in at hospitals, and 20% ofgross profit from medicine income; or (ii) a fixed monthly service fee.

SUMMARY

– 12 –


In December 2021, we declared a dividend of HK$20.4 million, which was fully settled as at theLatest Practicable Date.

In December 2021, we entered into a non-binding strategic cooperation framework agreement witha subsidiary of a Hong Kong listed company, which primarily engage in project management relating tohigh-end medical and healthcare services in Mainland China. We intend to actively explore differentcooperation models with them, including but not limited to providing consultancy services in relation tomedical and healthcare services, professional training in the Guangdong – Hong Kong – Macao GreaterBay Area, and telemedicine services to patients in Mainland China.

Impact of COVID-19

Although the COVID-19 outbreak did have some impact on our business and result of operationsduring the Track Record Period, it did not have a material adverse effect.

SUMMARY

– 12.1 –


Our revenue from medical services at our Medical Centres was HK$140.6 million, HK$137.8million and HK$80.1 million for the years ended 31 March 2020 and 2021 and the six months ended 30September 2021, respectively. Our number of patients visits at our Medical Centres decreased to 32,490visits for the year ended 31 March 2021 from 33,048 visits for the year ended 31 March 2020, mainlydue to the COVID-19 outbreak along with relayed delays in seeking non-urgent medical treatment,travel restrictions and the slowdown in the Hong Kong economy. Our number of patients visits at ourMedical Centres increased to 18,370 visits for the six months ended 30 September 2021 from 15,966visits for the six months ended 30 September 2020, mainly due to partial recovery from the COVID-19pandamic coupled with new doctors that joined us.

Our revenue from medical services at hospitals was HK$91.9 million, HK$80.2 million andHK$47.7 million for the years ended 31 March 2020 and 2021 and the six months ended 30 September2021, respectively. Our number of inpatient hospital admissions for which we provided medical servicesincreased only slightly to 8,156 admissions for the year ended 31 March 2021 from 8,013 admissionsfor the year ended 31 March 2020, mainly due to the general apprehension of going to hospitals andresulting delays for non-urgent medical treatment. Our number of inpatient hospital admissions forwhich we provided medical services increased to 5,050 admissions for the six months ended 30September 2021 from 3,836 admissions for the six months ended 30 September 2020, mainly due topartial recovery from the COVID-19 pandemic.

We believe that the negative impact of COVID-19 outbreak on our business and the privatehealthcare sector in Hong Kong is temporary and limited, and once an effective vaccine is widelydistributed and implemented in Hong Kong and the border between Hong Kong and Mainland Chinareopens, our business will continue to grow. The COVID-19 outbreak has increased public awareness ofthe need to maintain good health and wellness, and we believe this would positively impact the demandfor private healthcare in Hong Kong going forward. As such, our Directors confirm that the COVID-19outbreak is not expected to have a material adverse effect on our business strategies and we will utilisethe [REDACTED] from the [REDACTED] in accordance with the section headed ‘‘Future Plans and[REDACTED]’’ in this document.

SUMMARY

– 13 –


In this document, unless the context otherwise requires, the following terms and expressions

shall have the following meanings.

‘‘Ace Alliance’’ Ace Alliance Global Limited, a company incorporated in the BVI

with limited liability on 25 May 2020 and an indirect wholly-

owned subsidiary of our Company

‘‘Affiliate’’ with respect to any person, any other person, directly or

indirectly, controlling, controlled by or under common control

with such person

‘‘Articles’’ or ‘‘Articles of

Association’’

the articles of association of our Company, which was

conditionally adopted on [.] with effect from the [REDACTED],

as amended or supplemented from time to time

‘‘Associate’’ has the meaning ascribed to it under the Listing Rules

‘‘Board’’ or ‘‘Board of Directors’’ the board of directors of our Company

‘‘Business Day’’ a day on which banks in Hong Kong are generally open for

business to the public and which is not a Saturday, Sunday or

public holiday in Hong Kong

‘‘BVI’’ the British Virgin Islands

‘‘CAGR’’ compound annual growth rate

‘‘[REDACTED]’’ the issue of [REDACTED] Shares to be made on the

capitalisation of certain sums standing to the credit of the share

premium account of our Company referred to in the section

headed ‘‘Statutory and General Information — A. Further

Information about our Company — 3. Resolutions in writing

passed by our Shareholders on [.]’’ in this document

‘‘Cayman Companies Act’’ or

‘‘Companies Act’’

the Companies Act, Cap. 22 (Act 3 of 1961, as consolidated and

revised) of the Cayman Islands

‘‘CCASS’’ the Central Clearing and Settlement System established and

operated by HKSCC

‘‘CCASS Clearing Participant’’ a person admitted to participate in CCASS as a direct clearing

participant or general clearing participant

‘‘CCASS Custodian Participant’’ a person admitted to participate in CCASS as a custodian

participant

DEFINITIONS

– 14 –


‘‘[REDACTED]’’ [REDACTED]

DEFINITIONS

– 14.1 –


‘‘CCASS Investor Participant’’ a person admitted to participate in CCASS as an investor

participant who may be an individual or joint individuals or a

corporation

‘‘CCASS Operational Procedures’’ the operational procedures of HKSCC in relation to CCASS,

containing the practices, procedures and administrative

requirements relating to the operation and functions of CCASS,

as from time to time in force

‘‘CCASS Participant’’ a CCASS Clearing Participant, a CCASS Custodian Participant or

a CCASS Investor Participant

‘‘Central Healthcare Limited’’ Central Healthcare Limited, a company incorporated in Hong

Kong with limited liability on 17 August 2017 and an indirect

wholly-owned subsidiary of our Company

‘‘Central Medical Consultants’’ Central Medical Consultants Company Limited (formerly known

as Central Healthcare Consultants Limited) (中卓醫療有限公司),

a company incorporated in Hong Kong with limited liability on 1

December 2016 and an indirect wholly-owned subsidiary of our

Company, and the name of which has been changed to ‘‘HKMC

Dental & Maxillofacial Centre Limited (中卓醫務牙科及口腔頜

面中心有限公司)’’ with effect from 28 April 2021

‘‘Central Medical Management’’ Central Medical Management Company Limited, a company

incorporated in the BVI with limited liability on 2 November

2017, which is owned as to 51% by Dr. Kenneth Tsang, 41% by

Mr. Shiu and 8% by Dr. Adam Leung, respectively

‘‘CentralPharm’’ CentralPharm Company Limited (formerly known as Central

Pharmacy Company Limited) (中卓藥業有限公司), a company

incorporated in Hong Kong with limited liability on 12 September

2017 and an indirect wholly-owned subsidiary of our Company

‘‘CHG’’ Central Healthcare Group Limited, a company incorporated in the

BVI with limited liability on 29 November 2016 and a controlling

shareholder of our Company

‘‘China’’ or ‘‘PRC’’ the People’s Republic of China, excluding, for the purpose of this

document, Hong Kong, Macau and Taiwan

‘‘close associate(s)’’ has the meaning ascribed to it under the Listing Rules

‘‘CMH’’ Central Medical Holdings Limited, a company incorporated in the

BVI with limited liability on 2 November 2017 and a wholly-

owned subsidiary of our Company

DEFINITIONS

– 15 –


‘‘CMI’’ Central Medical Investment Limited, a company incorporated in

the BVI with limited liability on 20 December 2018, which would

not form part of our Group upon completion of the

Reorganisation

‘‘Companies Ordinance’’ the Companies Ordinance (Chapter 622 of the Laws of Hong

Kong), as amended, supplemented or otherwise modified from

time to time

‘‘Companies (Winding Up and

Miscellaneous Provisions)

Ordinance’’

the Companies (Winding Up and Miscellaneous Provisions)

Ordinance (Chapter 32 of the Laws of Hong Kong), as amended,

supplemented or otherwise modified from time to time

‘‘Company’’, ‘‘the Company’’ or

‘‘our Company’’

Hong Kong Medical Consultants Holdings Limited (中卓醫務控

股有限公司), an exempted company with limited liability

incorporated under the laws of the Cayman Islands on 21

September 2020

‘‘Concert Party Deed’’ a confirmatory deed entered into among CHG, Dr. Kenneth

Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing,

Dr. Jenny Tsang, Mr. Shiu, Mrs. Chen, Peak Summit, Heroic

Wealth, Mastermind Intelligence, Grateful Mind, Property

Linkage, Wealth Basin and Les Trois dated 23 October 2020,

details of which are set out in the section headed ‘‘Relationship

with Our Controlling Shareholders — Acting in Concert’’

‘‘connected person’’ has the meaning ascribed to it under the Listing Rules

‘‘connected transaction’’ has the meaning ascribed to it under the Listing Rules

‘‘Controlling Shareholder(s)’’ has the meaning ascribed to it under the Listing Rules and, unless

the context otherwise requires, refers to the parties entering into

the Concert Party Deed

‘‘core connected person’’ has the meaning ascribed to it under the Listing Rules

‘‘CVC Centres’’ the Community Vaccination Centre at the Kowloon Bay Sports

Centre where the Group provided COVID-19 vaccination services

from February 2021 to December 2021, and the Community

Vaccination Centre at Shatin Sports Centre where the Group will

provide COVID-19 vaccination services starting in January 2022

until June 2022

DEFINITIONS

– 16 –


‘‘Deed of Indemnity’’ the deed of indemnity dated [.] executed by Dr. Kenneth Tsang,Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing, Dr.Jenny Tsang, Mr. Shiu, Mrs. Chen, Peak Summit, Heroic Wealth,Mastermind Intelligence, Grateful Mind, Property Linkage,Wealth Basin, Les Trois and CHG in favour of our Company (foritself and as trustee for each of its subsidiaries), details of whichare set out in the section headed ‘‘Statutory and GeneralInformation — H. Other Information — 4. Tax and otherindemnities’’ in Appendix V to this document

‘‘Deed of Non-competition’’ the deed of non-competition dated [.] executed by Dr. KennethTsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing,Dr. Jenny Tsang, Mr. Shiu, Mrs. Chen, Peak Summit, HeroicWealth, Mastermind Intelligence, Grateful Mind, PropertyLinkage, Wealth Basin, Les Trois and CHG in favour of ourCompany, details of which are set out in the section headed‘‘Relationship with Our Controlling Shareholders — Non-Competition Undertakings’’

‘‘Diagnostic Centres’’ our two imaging and diagnoses centres and one laboratory

operating under our brand ‘‘Hong Kong Imaging and Diagnostic

Centre’’

‘‘Director’’ a director of our Company

‘‘Dr. Ada Ma’’ Dr. Ma Tin Wei, Ada, an ex-Equity Partner Doctor

‘‘Dr. Adam Leung’’ Dr. Leung Wing Hung, our executive Director and one of our

Controlling Shareholders

‘‘Dr. Barbara Tam’’ Dr. Tam Sau Man, Barbara

‘‘Dr. Boron Cheng’’ Dr. Cheng Cheung Wah, Boron, an Equity Partner Doctor

‘‘Dr. Brigitte Schlaikier Elisabeth’’ Dr. Brigitte Schlaikier Elisabeth, an Employee Doctor

‘‘Dr. Catherine Yuen’’ Dr. Yuen Ka Yan Catherine, an Employee Doctor

‘‘Dr. Choi Wai Lok’’ Dr. Choi Wai Lok, an Employee Doctor

‘‘Dr. Chu Leung Wing’’ one of our Controlling Shareholders

‘‘Dr. Clement Lee’’ Dr. Lee Pui Yin, an Equity Partner Doctor

‘‘Dr. David But’’ Dr. But Yiu Kuen, David, an ex-Employee Doctor

‘‘Dr. Eddie Cheung’’ Dr. Cheung Wai Yin Eddie, an Equity Partner Doctor

‘‘Dr. Gordon Chau’’ Dr. Chau Kwok On, Gordon

‘‘Dr. Lee Kim Bing’’ Dr. Lee Kim Bing, an Employee Doctor

DEFINITIONS

– 17 –


‘‘Dr. Jason Fong’’ Dr. Fong Ka Yeung, one of our Controlling Shareholders

DEFINITIONS

– 17.1 –


‘‘Dr. Jenny Tsang’’ Dr. Tsang Suk Kwan Jenny, one of our Controlling Shareholders

‘‘Dr. Kenneth Ng’’ Dr. Ng Wing Ho

‘‘Dr. Kenneth Tsang’’ Dr. Tsang Wah Tak, Kenneth, our executive Director, chairman

of the Board, chief executive officer, one of our Controlling

Shareholders and the spouse of Mrs. Tsang

‘‘Dr. Lo Wai Kei’’ an Equity Partner Doctor

‘‘Dr. Matthew Ng’’ Dr. Matthew Ng, an Equity Partner Doctor

‘‘Dr. Michele Yuen’’ Dr. Yuen Mae Ann Michele, an Equity Partner Doctor

‘‘Dr. Stanley Yu’’ Dr. Yu Ka Tung Stanley, an Equity Partner Doctor

‘‘Dr. Teresa Wang’’ Dr. Wang Kin Fong Teresa, an Employee Doctor

‘‘Employee Doctor(s)’’ Dr. David But, Dr. Catherine Yuen, Dr. Choi Wai Lok, Dr. Lee

Kim Bing, Dr. Brigitte Schlakier Elisabeth and Dr. Teresa Wang

‘‘Equity Partner Doctor(s)’’ Dr. Clement Lee, Dr. Boron Cheng, Dr. Matthew Ng, Dr. Lo Wai

Kei, Dr. Ada Ma, Dr. Eddie Cheung, Dr. Stanley Yu and Dr.

Michele Yuen

‘‘Founding Doctor(s)’’ Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Jenny

Tsang and Dr. Chu Leung Wing

‘‘FRC’’ Financial Reporting Council (財務匯報局)

‘‘Frost & Sullivan’’ Frost & Sullivan Limited, our industry consultant and an

Independent Third Party

‘‘FY’’ the financial year ended 31 March for the year so stated

‘‘GDP’’ gross domestic product



‘‘Grateful Mind’’ Grateful Mind International Limited, a company incorporated in

the BVI with limited liability on 10 September 2020 and one of

our Controlling Shareholders, which is wholly owned by Dr. Chu

Leung Wing

DEFINITIONS

– 18 –


‘‘Group’’, ‘‘our Group’’, ‘‘we’’,

‘‘our’’ or ‘‘us’’

our Company and its subsidiaries or, in respect of the period

before our Company became the holding company of its present

subsidiaries, the businesses operated by such subsidiaries or their

predecessors, as the case may be

‘‘Heroic Wealth’’ Heroic Wealth Capital Investments Limited, a company

incorporated in the BVI with limited liability on 10 September

2020 and one of our Controlling Shareholders, which is wholly

owned by Dr. Adam Leung

DEFINITIONS

– 18.1 –




‘‘HK$’’ or ‘‘Hong Kong dollars’’ or

‘‘HK dollars’’

Hong Kong dollars, the lawful currency of Hong Kong

‘‘HK Brain Memory’’ Hong Kong Brain Memory Centre Limited (formerly known as

Hintor Limited) (香港腦記憶中心有限公司), a company

incorporated in Hong Kong with limited liability on 6 October

2017 and an indirect wholly-owned subsidiary of our Company

‘‘HKFRS’’ Hong Kong Financial Reporting Standards, Hong Kong

Accounting Standards, amendments and the related interpretations

issued by the Hong Kong Institute of Certified Public

Accountants

‘‘HKID Limited’’ Hong Kong Imaging and Diagnostic Centre Limited (formerly

known as Central Imaging and Diagnostic Centre Limited) (香港

醫療診斷中心有限公司), a company incorporated in Hong Kong

with limited liability on 11 December 2008 and an indirect


‘‘HKID (Lab)’’ Hong Kong Imaging and Diagnostic Centre (Lab) Limited (香港

醫療診斷中心(化驗所)有限公司), a company incorporated in

Hong Kong with limited liability on 30 May 2012 and an indirect

non-wholly-owned subsidiary of our Company

‘‘HKID (MRI)’’ Hong Kong Imaging and Diagnostic Centre (MRI) Limited (香港

醫療診斷中心(磁力共振)有限公司), a company incorporated in

Hong Kong with limited liability on 24 April 2012 and an

indirect non-wholly-owned subsidiary of our Company

‘‘HKMC Dental Centre’’ our proposed new dental centre as further described under the

section headed ‘‘Future Plans and [REDACTED]’’

‘‘HKMC Geriatric Medicine

Centre’’

our previous medical centre located at Room 606, Manning

House, 48 Queen’s Road Central, Central, Hong Kong

‘‘HKMC I’’ our previous medical centre located at Rooms 811 and 812,

Central Building, 1–3 Pedder Street, Central, Hong Kong

DEFINITIONS

– 19 –


‘‘HKMC II’’ our medical centre located at Room 1202, Central Building, 1–3

Pedder Street, Central, Hong Kong

‘‘HKMC III’’ our previous medical centre located at Room 503, Central

Building, 1–3 Pedder Street, Central, Hong Kong

‘‘HKMC Dental’’ HKMC Dental & Maxillofacial Centre Limited (formerly known

as Central Medical Consultants Company Limited and Central

Healthcare Consultants Limited) (中卓醫務牙科及口腔頜面中心

有限公司), a company incorporated in Hong Kong with limited

liability on 1 December 2016 and an indirect wholly-owned

subsidiary of our Company

‘‘HKMC Medical Products’’ HKMC Medical Products Limited (中卓醫療產品有限公司), a

company incorporated in Hong Kong with limited liability on 1

April 2020 and an indirect wholly-owned subsidiary of our

Company

‘‘HKMC Oncology Centre’’ our proposed new oncology centre as further described under the

section headed ‘‘Future Plans and [REDACTED]’’

‘‘HKMC Ophthalmologist(s)’’ Dr. Gordon Chau, Dr. Kenneth Ng and Dr. Barbara Tam

‘‘HKMC Ophthalmology Centre’’ our affiliated medical centre operated by the HKMC

Ophthalmologists located at Rooms 1416–1421, Prince’s

Building, 10 Chater Road, Central, Hong Kong

‘‘HKMC Paediatric Centre’’ our previous medical centre located at Room 810, Central

Building, 1–3 Pedder Street, Central, Hong Kong

‘‘HKMC Psychiatric Centre’’ our medical centre located at Room 306, Central Building, 1–3

Pedder Street, Central, Hong Kong

‘‘HKMC SKIN Centre’’ our proposed new dermatology centre as further described under

the section headed ‘‘Future Plans and [REDACTED]’’

‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited, a wholly-

owned subsidiary of Hong Kong Exchanges and Clearing Limited

‘‘HKSCC Nominees’’ HKSCC Nominees Limited, a wholly-owned subsidiary of

HKSCC

‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

‘‘Hong Kong Imaging’’ the group comprising HKID Limited, HKID (Lab) and HKID

(MRI)

DEFINITIONS

– 20 –


‘‘Hong Kong Medical Consultants’’ Hong Kong Medical Consultants Limited (中卓醫務有限公司), a

company incorporated in Hong Kong with limited liability on 25

October 2013 and an indirect wholly-owned subsidiary of our

Company






‘‘Independent Third Party’’ any entity or person who, to the best knowledge of our Directors,

is not a connected person of our Company within the meaning

ascribed thereto under the Listing Rules

‘‘Integrated Diagnostic Centre’’ our proposed new diagnostic centre in Central, Hong Kong and as

further described under the section headed ‘‘Future Plans and

[REDACTED]’’

‘‘Integrated Flagship Medical

Centre’’

our new medical centre located on the 9th floor of Central

Building, Central, Hong Kong’’

DEFINITIONS

– 21 –







‘‘Latest Practicable Date’’ 21 December 2021, being the latest practicable date for the

purpose of ascertaining certain information contained in this

document prior to its publication

‘‘Les Trois’’ Les Trois Bonheurs (2018) Limited, a company incorporated in

the BVI with limited liability on 19 October 2018 and one of our

Controlling Shareholders, which is wholly owned by Mrs. Chen




‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock

Exchange, as amended, supplemented or otherwise modified from

time to time

DEFINITIONS

– 22 –


‘‘Macao’’ the Macao Special Administrative Region of the PRC

‘‘Main Board’’ the stock exchange (excluding the option market) operated by the

Stock Exchange which is independent from and operated in

parallel with the GEM of the Stock Exchange

‘‘Mastermind Intelligence’’ Mastermind Intelligence Limited, a company incorporated in the

BVI with limited liability on 10 September 2020 and one of our

Controlling Shareholders, which is wholly owned by Dr. Jason

Fong

‘‘Medical Centre(s)’’ our six medical centres including HKMC I, HKMC II, HKMC III,

HKMC Geriatric Medicine Centre, HKMC Paediatric Centre and

HKMC Psychiatric Centre operating under our brand ‘‘Hong

Kong Medical Consultants’’

‘‘Medical Concierge Holding’’ Medical Concierge Holding Limited, a company incorporated in

the BVI with limited liability on 16 August 2019 and an indirect


‘‘Medical Concierge Limited’’ Medical Concierge Limited, a company incorporated in the BVI

with limited liability on 16 August 2019 and an indirect non-


‘‘Medical Concierge Management’’ Medical Concierge Management Limited, a company incorporated

in the BVI with limited liability on 16 August 2019 and an

indirect wholly-owned subsidiary of our Company

‘‘Memorandum’’ or ‘‘Memorandum

of Association’’

the memorandum of association of our Company, which was

conditionally adopted on [.] with effect from the [REDACTED],

as amended or supplemented from time to time

‘‘Mr. Shiu’’ Mr. Shiu Shu Ming, our executive Director and one of our

Controlling Shareholders

‘‘Mrs. Chen’’ Mrs. Chen Chou Mei Mei Vivien, our executive Director, chief

operating officer and one of our Controlling Shareholders

‘‘Mrs. Tsang’’ Mrs. Janette Elizabeth Tsang, our director of operations and the

spouse of Dr. Kenneth Tsang

‘‘New Service Agreement(s)’’ the new service agreement(s) to be entered into on [.] between us

and each of our Founding Doctors and Equity Partner Doctors

that will become effective upon the [REDACTED], the details of

which are further described under the section headed ‘‘Business

— Our Professional Team — New Service Agreements with

Founding Doctors and Equity Partner Doctors’’

DEFINITIONS

– 23 –





‘‘Panel Specialist(s)’’ medical practitioners including specialist doctors and non-doctor

health specialists currently working for the Group on an non-

exclusive basis covering Respiratory Medicine, Orthopedics &

Traumatology, Psychiatry, Oncology, Dental Surgery, General

Surgery, Dermatology & Venereology, Clinical Psychology,

Speech Therapy, Nutritional Therapy and Psychology Counselling

‘‘Peak Summit’’ Peak Summit Development Limited, a company incorporated in

the BVI with limited liability on 10 September 2020 and one of

our Controlling Shareholders, which is wholly owned by Dr.

Kenneth Tsang

‘‘PHFO’’ Private Healthcare Facilities Ordinance (Chapter 633 of the Laws

of Hong Kong)

‘‘Pre-[REDACTED] Investments’’ [REDACTED]

DEFINITIONS

– 24 –


‘‘Pre-[REDACTED] Investors’’ [REDACTED]



‘‘Property Linkage’’ Property Linkage Limited, a company incorporated in the BVI

with limited liability on 14 September 2020 and one of our

Controlling Shareholders, which is wholly owned by Dr. Jenny

Tsang

‘‘Regulation S’’ Regulation S under the Securities Act

‘‘Renminbi’’ or ‘‘RMB’’ Renminbi yuan, the lawful currency of the PRC

‘‘Reorganisation’’ the reorganisation arrangements undergone by us in preparation

for the [REDACTED], details of which are set out in the section

headed ‘‘History, Reorganisation and Corporate Structure —

Reorganisation’’ in this document

‘‘Securities Act’’ the Securities Act of 1933, as amended, and the rules and

regulations promulgated thereunder

‘‘Seychelles’’ the Republic of Seychelles

‘‘SFC’’ the Securities and Futures Commission of Hong Kong

‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of

Hong Kong), as amended, supplemented or otherwise modified

from time to time

‘‘Share(s)’’ Share(s) in the share capital of our Company, with a nominal

value of HK$0.00001 each

DEFINITIONS

– 25 –


‘‘Share Option Scheme’’ the share option scheme conditionally adopted by our Company

on [.], the principal terms of which are summarised in the section

headed ‘‘Statutory and General Information — G. Share Option

Scheme’’ in Appendix V to this document

‘‘Shareholder’’ holder of the Shares

‘‘Smart Winner’’ Smart Winner Investments Limited, a company incorporated in

Seychelles with limited liability on 26 July 2019 and an indirect



‘‘Sole Sponsor’’ China International Capital Corporation Hong Kong Securities

Limited

‘‘sq.ft.’’ square foot

‘‘sq.m.’’ square metre



‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

‘‘subsidiary(ies)’’ has the meaning ascribed to it under the Listing Rules

‘‘substantial shareholder’’ has the meaning ascribed to it under the Listing Rules

‘‘Takeovers Code’’ the Hong Kong Code on Takeovers and Mergers issued by the

SFC, as amended or supplemented from time to time

‘‘Track Record Period’’ the years ended 31 March 2019, 2020 and 2021 and the six

months ended 30 September 2021

‘‘U.S. dollars’’ or ‘‘US$’’ United States dollars, the lawful currency of the United States



DEFINITIONS

– 26 –


‘‘United States’’ or ‘‘U.S.’’ the United States of America, its territories, its possessions and

all areas subject to its jurisdiction

‘‘Wealth Basin’’ Wealth Basin Limited, a company incorporated in the BVI with

limited liability on 19 June 2017 and one of our Controlling

Shareholders, which is wholly owned by Mr. Shiu

‘‘%’’ per cent

DEFINITIONS

– 27 –


This document contains forward-looking statements that are, by their nature, subject to significant

risks and uncertainties. These statements involve known and unknown risks, uncertainties and other

factors that may cause our actual results, performance or achievements to be materially different from

performance or achievements expressed or implied by the forward-looking statements. In some cases,

these forward-looking statements can be identified by words or phrases such as ‘‘anticipate’’, ‘‘believe’’,

‘‘continue’’, ‘‘likely’’, ‘‘could’’, ‘‘should’’, ‘‘ought to’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’,

‘‘might’’, ‘‘aim’’, ‘‘plan’’, ‘‘seek’’, ‘‘will’’, ‘‘would’’, ‘‘assume’’, ‘‘going forward’’, ‘‘project’’,

‘‘propose’’, ‘‘potential’’, ‘‘predict’’ and other similar expressions, or their negatives. These forward-

looking statements relate to, among others:

. our operations and business prospects;

. our future business development, financial condition and results of operations;

. our ability to successfully implement our business plans and strategies;

. the competitive landscape for our business and the development and actions of our existing

and future competitors;

. our ability to attract and retain skilled and qualified healthcare professionals;

. consumer behaviour and preferences and market trends for medical services;

. the regulatory environment and industry outlook for the medical sector or our medical service

business;

. general political, economic, legal and social conditions and government policies in Hong

Kong, and other overseas markets;

. our proposed [REDACTED] from the [REDACTED];

. our future capital needs and capital expenditure plans;

. our dividend payout;

. other statements in this document that are not historical facts; and

. other factors beyond our control.

The forward-looking statements contained in this document relate only to events or information as

at the date of on which the statements are made in this document. We do not undertake to update or

otherwise revise any forward-looking statements, whether as a result of new information, future events

or otherwise. You should not place undue reliance on any forward-looking statements.

All forward-looking statements contained in this document are qualified by reference to the

cautionary statements set out in this section.

FORWARD-LOOKING STATEMENTS

– 28 –


You should carefully consider all of the information in this document, including the risksand uncertainties described below, before making an investment in our Shares. Our business,financial condition and results of operations could be materially and adversely affected by anyof these risks and uncertainties. The trading price of our Shares could decline due to any ofthese risks, and you may lose all or part of your investment. Additional risks and uncertaintiesnot presently known to us or not described below could also harm our business, financialcondition and results of operations.

RISKS RELATING TO OUR BUSINESS

We are dependent on our professional team of specialist doctors and our ability to attract andretain skilled and qualified healthcare professionals.

We generate revenue mainly from the provision of specialist medical services and allied healthservices. Accordingly, our Group’s performance largely depends on our ability to attract and retain theservices of our specialist doctors, including other medical practitioners that support our allied healthservices. Our revenue generated from specialist medical services accounted for 98.3%, 93.6%, 86.7%and 77.0% of our total revenue for the years ended 31 March 2019, 2020 and 2021 and the six monthsended 30 September 2021, respectively; while our revenue from allied health services represented nil,5.3%, 14.5% and 25.3% of our total revenue over the same respective periods. For details, please referto the section headed ‘‘Business — Our Professional Team’’. Our Group relies on the services of thesehealthcare professionals to provide the current spectrum of healthcare services to our clients. Our Groupbelieves key competitive factors that are important in recruiting and retaining our healthcareprofessionals include our remuneration package, our brand and reputation, existing doctors on ourplatform, and number of client visits.

As at the Latest Practicable Date, we had 17 specialist doctors that work for us on an exclusivebasis. The compensation arrangements for these doctors differ based on whether the doctor is aFounding Doctor, Equity Partner Doctor, or Employee Doctor. Please see the section headed ‘‘Business— Our Professional Team — Compensation Arrangements with Specialist Doctors and PanelSpecialists’’ for further details on the various compensation arrangements we have with them.Competition for skilled and qualified healthcare professionals is intense. While our key doctors,including our Founding Doctors and Equity Partner Doctors, will enter into the New Service Agreementswith us effective upon the [REDACTED] that do not expire until 31 March 2026, there is no guaranteethat we will be able to continue to retain them for the entire term. Under the New Service Agreements,our Founding Doctors and Equity Partner Doctors are liable for paying us an early termination feeshould any of them terminate their services prior to 31 March 2026; however, such a fee would notapply in case of death, incapacity or critical illness. In addition, it is possible that our specialist doctorsand other healthcare professionals may decide to cease serving our Group and work for our competitorsfor reasons beyond our control. For further details surrounding the New Service Agreements andtermination fee, please see the section headed ‘‘Business — Our Professional Team — New ServiceAgreements with Founding Doctors and Equity Partner Doctors’’.

Given the competitive landscape of the private healthcare services industry, we have to ensure theattractiveness of our remuneration package in order to attract and retain skilled and qualified healthcareprofessionals. In particular, the service fees that we pay to our specialist doctors depend on theirrespective medical specialty, experience, qualifications, services provided, prior remuneration package;as well as commercial negotiation with the respective medical practitioner to attract or retain him/her in

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light of the competitive healthcare services market in Hong Kong, where there is shortage of medicalpractitioners. For the years ended 31 March 2019, 2020 and 2021 and the six months ended 30September 2021, the total remuneration (which mainly consists of service fees and/or salaries) paid toour specialist doctors and Panel Specialists amounted to HK$44.7 million, HK$70.0 million, HK$70.1million and HK$43.8 million, respectively, accounting for 40.2%, 40.5%, 37.8% and 34.7% of our totalcost of sales for the same respective periods. We cannot assure you that our remuneration costs will notincrease or that we will be able to transfer such costs to our clients, which may in turn materially andadversely affect the profitability of our business operations.

The compensation we pay to our specialist doctors that are Founding Doctors and Equity PartnerDoctors have had, and are expected to continue to have, a significant impact on our business,financial position and profitability.

During the Track Record Period, we paid no service fees to our five Founding Doctors, all ofwhich work for us on an exclusive basis. As Founding Doctors, they rely mainly on dividendsdistributed by us as their primary source of income. Our Founding Doctors will agree to maintain thisarrangement under the New Service Agreements. The New Service Agreements with our FoundingDoctors provide for substantially the same terms as their existing service agreements (including that theywill not be entitled to any service fees), except that the term has been extended to 31 March 2026 uponthe [REDACTED] and each of our Founding Doctors would be subject to an early termination feeshould he/she decide to terminate his/her services with us. During the Track Record Period, the amountof dividends declared that was attributable to the Founding Doctors amounted to HK$103.1 million.Should we have included the Founding Doctors’ market salaries as service fees during the Track RecordPeriod, our profit attributable to owners of the Company during the Track Record Period would havebeen substantially lower, and the hypothetical net profit attributable to owners of the Company(excluding [REDACTED] expenses) would have been HK$30.3 million, HK$27.0 million, HK$25.1million and HK$14.1 million for the years ended 31 March 2019, 2020 and 2021 and the six monthsended 30 September 2021, respectively. Please see the section headed ‘‘Business — Our ProfessionalTeam — Hypothetical Net Profit Taking into Account Market Compensation of Our Founding Doctors’’for further information.

In addition, a significant portion of our profit had historically been attributable to the services ofour Founding Doctors, and we expect this to continue. Our Founding Doctors’ contribution to our profitbefore tax (before [REDACTED] expenses) amounted to HK$59.2 million, HK$46.3 million, HK$21.7million and HK$9.6 million during the years ended 31 March 2019, 2020 and 2021 and the six monthsended 30 September 2021, respectively; representing 82.6%, 78.2%, 52.7% and 38.5% of our total profitbefore tax (before [REDACTED] expenses), respectively. Should our Founding Doctors becomeunwilling or unable to provide services to us, our business and financial results may be materially andadversely affected. Despite the New Service Agreements, we cannot assure you that our FoundingDoctors will not be attracted by compensation packages offered by our competitors, try to renegotiatetheir service agreements with us, or leave for reasons beyond our control.

We currently have eight Equity Partner Doctors, all of which work for us on an exclusive basis,and are small passive shareholders of the Group. In contrast to our Founding Doctors, the Equity PartnerDoctors rely mainly on service fees derived from the profit that they generate with us as their primarysource of income from us, and not on any dividends declared by us. Seven out of eight of our EquityPartner Doctors have an arrangement with us whereby they only contribute a fixed dollar amount to ourprofit before tax (i.e., the Fixed Committed Fee Contribution) under their respective service agreements.Therefore, any excess in income over the Fixed Committed Fee Contribution that was generated by anyone of these seven Equity Partner Doctors was paid out to him/her as service fees. This effectivelyplaces a cap on the amount of profit before tax that we can derive from them to the total amount of

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Fixed Committed Fee Contributions, which is currently HK$9.3 million per year. The remaining EquityPartner Doctor has an arrangement with us whereby he contributes a variable amount to our profit beforetax with a fixed minimum amount (i.e. the Variable Committed Fee Contribution), so accordingly, thereis no cap on the amount of profit that we can derive from him. Please see section headed ‘‘Business —

Our Professional Team — Compensation Arrangements with Specialist Doctors and Panel Specialists’’for further information on the service fee arrangements with our Equity Partner Doctors. The service feearrangements that our Equity Partner Doctors have with us effectively limits the profit that the Groupcan derive from them, and this is expected to continue for the foreseeable future.

During the years ended 31 March 2019, 2020 and 2021 and the six months ended 30 September2021, the total service fees paid by us to our Equity Partner Doctors amounted to HK$40.9 million,HK$62.5 million, HK$62.1 million and HK$38.4 million, respectively, while their contribution to ourprofit before tax (before [REDACTED] expenses) amounted to HK$6.3 million, HK$8.6 million,HK$9.9 million and HK$5.2 million over the same respective periods; representing 8.8%, 14.5%, 24.0%and 21.0% of our total profit before tax (before [REDACTED] expenses), respectively. The serviceagreements that we negotiated with our Equity Partner Doctors were on an arms-length basis and theyhave agreed to enter into the New Service Agreements which provide for substantially the same terms astheir existing service agreements, except the term has been extended until 31 March 2026 upon the[REDACTED] and each of our Equity Partner Doctors would be subject to an early termination feeshould he/she decide to terminate his/her services with us. Whilst the service fees we paid to our EquityPartner Doctors under their service agreements exceeded the market rate, we cannot guarantee thatcertain of our Equity Partner Doctors will not be attracted by potentially even higher compensationpackages offered by our competitors or leave for reasons beyond our control. Should our Equity PartnerDoctors become unwilling or unable to provide services to us, our business and financial results may bematerially and adversely affected.

We rely on our brand and reputation within the healthcare service industry in Hong Kong, whichmay be adversely affected by malpractice claims and negative publicity.

Our Directors consider that our Group’s success depends, to a significant extent, on the recognitionof our brand and reputation in the healthcare service industry as a reliable service provider. Medicalnegligence or malpractice claims, or complaints from patients in relation to the quality of servicesprovided by us may adversely affect our reputation and image, which may in turn, materially andadversely affect the demand for our services.

Various factors, some of which are beyond our control, may lead to an adverse impact on ourbrand and reputation, including:

. any failure to effectively manage our service quality and to monitor the performance of ourhealthcare professional team and other staff;

. client dissatisfaction leading to medical malpractice, negligence, or other claims against ourspecialist doctors and/or other healthcare professionals, whether justified or not; and

. our doctors’ inability to adopt new medical skills or meet emerging industry standards tomaintain high-level standards in patient care.

Where undesirable complications or outcomes are caused by our services or where the relevanttreatment or medication does not fully meet the expectation of our clients, they may express negativecomments through media such as the internet or newspapers or lodge complaints with the Hong KongConsumer Council, the Medical Council and/or pursue a claim against our Group and our healthcareprofessionals, which may adversely affect our brand and reputation as well as our financial performance.

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We cannot assure you that we or any of our specialist doctors or allied health professionals will

not encounter malpractice, medical negligence or misconduct claims in the future. These claims may be

brought against us or any of our medical practitioners by way of legal proceedings or lodging of formal

complaints with the relevant licensing regulatory bodies. In any of these cases, we may be required to

pay monetary compensation or damages or the qualifications or licences of our medical practitioners or

allied health professionals may be suspended or revoked; or otherwise they may be subject to other

disciplinary action. An assertion of malpractice, medical negligence, misconduct or negative publicity

relating to the healthcare services provided by us, regardless of its merits or eventual outcome, could

adversely affect our business and financial conditions and our operating results and business prospects

and reputation.

In addition, during the course of our services, our specialist doctors and other healthcare

professionals may prescribe medication and/or recommend treatments to our patients with their own

professional judgment. We cannot guarantee the quality of the pharmaceutical drugs as they are not

manufactured by us. Our reputation could also be harmed if our services or facilities fail to meet the

expectation of our clients or we fail to maintain our established standards, which could also lead to

negative media coverage.

Our business has been and is likely to be adversely affected by the outbreak of COVID-19, andmay be affected by other communicable diseases in the future.

In response to the outbreak of COVID-19, the Hong Kong government has since February 2020

taken a number of actions such as temporarily closing government offices and public facilities,

restricting travel internationally, including between Hong Kong and Mainland China, tracing,

quarantining and otherwise treating individuals in Hong Kong who had contracted COVID-19, requiring

residents to wear masks, asking residents to remain at home and to avoid gathering in public, among

other actions. The outbreak of COVID-19 in Hong Kong also resulted in the temporary closure of many

corporate offices and retail stores.

For further information, please see the section headed ‘‘Financial Information — Recent

Developments and Material Adverse Change — Impact of COVID-19’’. While the COVID-19 outbreak

did not have a material adverse effect on our business operations, it is uncertain as to whether the

impact on the economy and our business will improve or worsen, and any recovery in number of patient

visits may only be temporary. There continues to be great uncertainty as to the future progress of the

disease. Although viable vaccines and anti-viral treatments for COVID-19 are available in Hong Kong,

there remains great uncertainty as to when such medicines will be widely available and implemented

elsewhere, the actual efficacy, and when herd-immunity will develop, especially due to new COVID-19

variants such as the recent Delta and Omicron variants, which may render existing vaccines and

therapeutic medicines ineffective. Relaxation of restrictions on economic and social life may lead to new

cases which may lead to imposition of further restrictions. It is unclear when international travel will

resume or when local clients with non-urgent disease will once again feel comfortable visiting hospitals

and clinics. Accordingly, our business and financial performance may be further impacted for the

remainder of our financial year, if not longer.

In addition to COVID-19, our business may be affected by outbreaks of other communicable

diseases. Any mutation of COVID-19, a recurrence of Severe Acute Respiratory Syndrome (or SARS) or

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an outbreak of any other epidemics in Hong Kong or Mainland China, such as the avian influenza A

(H5N1 and H7N9) virus or the influenza A (H1N1) virus, Middle East Respiratory Syndrome (or

MERS), or other communicable diseases could have a material adverse effect on our Group’s operations

and financial performance.

In the event such outbreaks occur at any of our Medical Centres or Diagnosis Centres, there is apossibility of temporary closures of the affected centre and quarantine of all affected healthcareprofessionals. There can be no assurance that our Group’s crisis management measures can beimplemented on a timely manner or will be effective. Any failure by us to manage the spread ofcommunicable diseases may also damage our reputation.

Our financial statements during the Track Record Period may not be easily comparable and pastperformance is not necessarily indicative of future results.

Our revenue increased from HK$195.7 million for the year ended 31 March 2019 to HK$251.4million for the year ended 31 March 2021, representing a CAGR of approximately 13.4%. Our revenueincreased from HK$121.3 million for the six months ended 30 September 2020 to HK$166.0 millionover the same period in 2021. Our financial statements during the Track Record Period may not beeasily comparable between each period. Our core business, which involves the provision of medicalservices, did not start until November 2017 when our Founding Doctors joined our platform as specialistdoctors. In addition, five of our Equity Partner Doctors joined us as doctors at various dates during theyear ended 31 March 2019, which contributed significantly to our revenue growth for both the yearsended 31 March 2019 and 2020. For further details, please see the section headed ‘‘History,Reorganisation and Corporate Structure’’. In October 2019, we acquired Hong Kong Imaging, which hastwo imaging and diagnoses centres and one laboratory located in Central in order to supplement ourmedical services. The acquisition of Hong Kong Imaging did not constitute a major transaction for thepurposes of Main Board Listing Rule 4.05A. However, due to the combination of the above factors,changes in our financial statements during the Track Record Period were significant, and they may notbe easily comparable.

In addition, although our revenue has increased during the Track Record Period, such financialdata only reflect our past performance. Past performance is not necessarily indicative of future results.The effects of the changing regulatory, economic and other unpredictable factors, such as the on-goingCOVID-19 pandemic and deterioration of China and United States relations, may have a material effecton our business and hence affect our future financial performance. Moreover, our financial and operatingresults may not meet the expectation of public market analysts or investors, which could cause the futureprice of the Shares to decline. Our revenue, expenses and operating results may vary from period toperiod in response to a variety of factors beyond our control. You should not rely on our historicalresults to predict the future performance of our Shares.

Our business operations are affected by competition from other healthcare services providers andother corporate healthcare solutions providers.

The healthcare services industry in which we operate is highly competitive. We are a multi-disciplinary healthcare services provider covering various specialist medical services as well as alliedhealth services. Nonetheless, we face intense competition from other healthcare services providers andcorporate healthcare solutions providers in both the public and private sectors in Hong Kong. Wecompete against our competitors over a number of factors, including the skills and experience of ourspecialist doctors, brand recognition, operating history, range of equipment, financial resources,geographical coverage, and price. Increase in market competition may result in a reduction of profitmargin or loss of market share for our Group. If we cannot compete effectively or maintain or grow ourmarket share, our business, results of operations and financial condition may be materially and adverselyaffected.

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We may not be able to implement our business strategies on schedule or within our budget or atall. Such uncertainty could result in fluctuations in our financial performance.

The growth of our business depends on the implementation of our business strategies to a large

extent. The successful implementation of our business strategies is subject to significant business,

economic and competitive uncertainties and contingencies, including, among others, our ability to attract

new experienced specialist doctors, the continued growth of healthcare services and market conditions in

Hong Kong.

Our operating results may be affected by the actual timing and costs associated with finding

suitable specialist doctors and other healthcare professionals, as well as establishing and developing new

medical centres, such as our Integrated Flagship Medical Centre, Integrated Diagnostic Centre, HKMC

Oncology Centre, HKMC Dental Centre and HKMC SKIN Centre. For further information on our

business strategies and future plans, please see the section headed ‘‘Future Plans and [REDACTED]’’. In

particular, we expect that we will require significant amounts of capital for our expansion plans,

including the purchase and lease of suitable office space, the purchase of equipment and hiring of

doctors and other healthcare support staff as well as other initial operating costs. During the start-up

period, we will have to pay fixed costs such as rental and salary even when we may not generate

sufficient revenue to cover them from the provision of medical services. In addition, our investment

payback periods can fluctuate significantly for reasons beyond our control. Moreover, we may not be

able to replicate our business model into new speciality services that we currently do not cover and plan

to expand into areas such as dental services at the HKMC Dental Centre and dermatology services at the

HKMC SKIN Centre. Accordingly, any uncertainty in establishing new medical centres may have a

significant impact on our operating results.

Whether we can successfully implement our business strategies depends on various factors

including, among others, our ability to attract suitable medical professionals, the availability of suitable

locations for setting up of new medical centres and our ability to attract clients, compliance with

applicable laws and regulations, changes in economic and market conditions. Delay or failure to

successfully implement our business strategies could result in additional costs and/or delayed revenue,

which may adversely affect our business, operational results and financial conditions.

We expect that the investment cost for the implementation of our currently planned future

strategies will be approximately HK$[298.9] million in aggregate, which will be funded by the

[REDACTED] from the [REDACTED]. In the event that our expansion plans require additional capital,

there can be no assurance that we will have adequate internal resources or obtain additional financing to

implement our future strategies.

We lease the premises in which our Medical Centres and Diagnostic Centres are located; any non-renewal of leases or substantial increase in rent my affect our business and financial performance.

We currently lease offices for our three Medical Centres and three Diagnostic Centres as well as

our corporate administration office, all of which are located in the Central district of Hong Kong. For

the years ended 31 March 2019, 2020 and 2021 and the six months ended 30 September 2021, we

recorded depreciation of right-of-use assets amounting to HK$8.2 million, HK$14.7 million, HK$19.1

million and HK$13.4 million, representing 4.2%, 5.9%, 7.6% and 8.1% of our revenue, respectively.

Our leased properties have lease terms ranging from 10 months to 6 years with monthly rents

ranging from approximately HK$75 thousand to HK$1.4 million. The landlords may exercise early

termination of our leases or may refuse to renew our leases following expiration. We cannot assure you

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that we will be able to enter into new leases or renew our leases on commercially acceptable terms in

the future. The availability of commercially suitable and convenient locations is important to our

business. Should we be required to relocate, for whatever reasons, we may incur substantial time and

expense such as moving costs and renovation costs in addition to significant business disruption.

Accordingly, if we are unable to maintain operations at our current locations, our business and financial

conditions and operating results could be materially and adversely affected.

On 1 February 2021, we started a new lease for the entire office space on the 9th floor of CentralBuilding, 1–3 Pedder Street, Central, Hong Kong for a term of six years and expiring on 31 January2027. This new office space has approximately 16,000 sq.ft. and in June 2021, we moved HKMC I,HKMC III and HKMC Paediatric Centre (which are located on the 8th and 5th floors in the samebuilding) and HKMC Geriatric Medicine Centre (which is located at Manning House, Central) to thisnew office on the 9th floor. However, we cannot assure you that we would be able to efficiently utilisethe extra space by successfully implementing all of our expansion plans. Should we fail to do so, ouroperation, business and financial condition may be adversely impacted.

We rely on the HKMC Ophthalmologists for our medical management services business.

During the Track Record Period, we provided medical management services for doctors in relationto administrative and operational functions. By offering medical management services to selectedmedical practitioners, we have been able to extend and build relationships, and enhance our ability toattract and recruit specialist doctors that we believe would be able to complement our business.However, there is no assurance we can continue to do so in the future. During the years ended 31 March2019, 2020 and 2021 and the six months ended 30 September 2021, our management fee incomegenerated from the provision of medical management services amounted to HK$3.4 million, HK$4.6million, HK$4.5 million and HK$2.3 million, respectively, representing 1.7%, 1.9%, 1.8% and 1.4% ofour total revenue. Currently, we rely on the three HKMC Ophthalmologists for our medical managementservices business. Please see the section headed ‘‘Business — Our Services — Medical ManagementServices’’ for further information. Should our arrangement with the HKMC Ophthalmologists terminate,or should we fail to obtain new customers for our medical management business, our business andability to attract and recruit specialist doctors may be adversely affected.

Our financial results are expected to be affected by expenses in connection with the share-basedpayment for Shares issued to certain of our Equity Partners.

In consideration of recruiting certain of our Equity Partner Doctors as specialist doctors to provide

services to us, we issued Shares to Dr. Eddie Cheung, Dr. Stanley Yu and Dr. Michele Yuen for a

nominal amount per Share. Immediately after completion of the [REDACTED], they will in aggregate

hold 9,239,122 Shares or approximately 1.43% of the then total issued share capital of our Company.

The issue of such Shares to these Equity Partner Doctors constitute share-based payments according to

HKFRS. It is estimated that approximately HK$4.1 million will be charged to our Group’s consolidated

statements of comprehensive income for each year for the five years ending 31 March 2026. In view of

the above, we anticipate that the net profit margin and net profit of our Group for each of the five years

ending 31 March 2026 will be affected. For reasons of the share-based payment and other details, please

see the section headed ‘‘History, Reorganisation and Corporate Structure — Pre-[REDACTED]

Investments’’.

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Insurance coverage may not sufficiently cover risks arising from our business operations.

We have purchased and maintain insurance to cover, among others, employees’ compensation,

property, public liability, medical malpractice liability and medical insurance for our employees. For the

years ended 31 March 2019, 2020 and 2021 and the six months ended 30 September 2021, our insurance

expenses were HK$0.5 million, HK$0.4 million, HK$0.6 million and HK$0.3 million, respectively. We

also ensure our medical practitioners purchase their own medical liability insurance. Although our

Founding Doctors and most of our Panel Specialists have agreed to indemnify us in case of negligence

or malpractice in relation to services carried out by them, we have not obtained such indemnities from

our other doctors such as our Equity Partner Doctors and Employee Doctors and must rely on our

medical malpractice insurance. However, our Group’s financial position may be adversely affected in the

event claims exceed the coverage or the scope of our insurance policies or our insurance policies do not

cover such claims. In addition, although our medical practitioners are primarily liable for claims of

negligence or malpractice against them, we may also face claims from patients and be held liable due to

our employment relationship with the medical practitioner, for contributory negligence or our own

negligence. If we suffer losses which are not covered by our insurance policies or the amount of

compensation we receive from our insurers for our losses is less than the actual losses suffered by us,

our financial position and result of operations may be materially and adversely affected.

We mainly serve individual clients at our Medical Centres located in Central, Hong Kong, anysignificant downturn in the economy may adversely affect the demand for our services.

During the Track Record Period, we derived a majority of our revenue from individual clients. For

the years ended 31 March 2019, 2020, 2021 and the six months ended 30 September 2021, individual

clients accounted for approximately 92.6%, 91.1%, 93.1% and 96.6% of our total revenue. On the other

hand, only 5.6%, 7.8%, 8.1% and 5.8% of our total revenue were generated from our Group’s corporate

clients for the same respective periods.

The demand from individual clients, especially business professionals, largely depends on their

financial ability and willingness to pay. A slowdown in the economy may lead to a decrease in demand

as individual clients opt for subsidised public healthcare services available at government hospitals and/

or deferring non-essential healthcare services. Their willingness to pay may also depends on our

reputation and service quality. On the contrary, the demand from corporate clients is less vulnerable to

the change of economy as the employees from corporate clients are eligible to request healthcare

services from us through the healthcare benefits plans already joined by their employers.

As individual clients account for significant portion of revenue of our Group, any decrease in

demand from individual clients may have a material and adverse effect on our Group’s business, results

of operations and financial condition.

In addition, we derived all of our revenue during the Track Record Period from operations in

Central, Hong Kong. Any material adverse events, which could impact business in Central, such as

material social unrest and civil disobedience, as well as natural disasters, would negatively impact the

demand for our healthcare services and disrupt our business operations. Due to the limited geographical

coverage of the our operations, we may not be able to effectively manage any potential losses arising

from these adverse events, which may materially and adversely affect our business, results of operations

and financial condition.

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We may incur impairment losses on intangible assets such as goodwill.

As at 30 September 2021, we recorded intangible assets of HK$17.8 million, including HK$17.7million of goodwill due to our acquisition of Hong Kong Imaging in October 2019. Goodwill is notamortised but it is tested for impairment annually, or more frequently if events or changes incircumstances indicate that it might be impaired. For further details on our intangible assets, includingour impairment testing of goodwill, please see the section headed ‘‘Financial Information — Descriptionof Selected Consolidated Statement of Financial Position Items — Goodwill’’ and Note 13 to theAccountant’s Report in Appendix I to this document. Should the expected growth rates for Hong KongImaging significantly decrease as part of our future impairment testing of goodwill, we may incursignificant impairment losses on our goodwill, which in turn would adversely affect our results ofoperations and financial condition.

We recorded operating losses for our allied health services segment and this may continue.

Our allied health services incurred a segment loss of HK$2.4 million and HK$1.8 million for theyears ended 31 March 2020 and 2021, respectively, primarily due to a slowdown of business at HongKong Imaging due to lower number of patient visits as a result of the COVID-19 outbreak. Our alliedhealth services recorded a segment profit of HK$7.5 million for the six months ended 30 September2021. For further information, please see the section headed ‘‘Financial Information — RecentDevelopments and Material Adverse Change — Impact of COVID-19’’. We expect that COVID-19 willcontinue to adversely affect Hong Kong Imaging, and the extent of the impact will depend on theseverity of the on-going situation. Please also see the section headed ‘‘— Our Business has been and islikely to be adversely affected by the outbreak of COVID-19, and may be affected by othercommunicable diseases in the future’’.

We are exposed to credit losses on trade receivables.

We recorded gross trade receivables of HK$20.7 million, HK$20.9 million, HK$24.1 million andHK$24.6 million as at 31 March 2019, 2020 and 2021 and the six months ended 30 September 2021,respectively; and recorded allowance for impairment losses of HK$4.6 million, HK$4.8 million, HK$5.0million and HK$4.9 million as at the same respective dates. In particular, we recorded HK$4.6 millionin impairment losses for the year ended 31 March 2019 mainly due to the fact that one of our high-valuehospital patients failed to pay for his medical services rendered. Please see the section headed‘‘Financial Information — Results of Operations of Our Group — Comparison of the Year Ended 31March 2020 to the Year Ended 31 March 2019 — Provision of impairment losses on financial assets’’for further information. Whilst most of our patients would not normally incur or accumulate such asignificant amount of in-patient hospital admission fees as the case above, we cannot guarantee that wewill not experience a similar impairment or a higher number of smaller value impairment losses on ourtrade receivables in the future from hospital patients, which in turn may have a material and adverseimpact on our business, results of operations and financial condition.

We are subject to risk of system failure caused by unexpected network interruptions, securitybreaches, attack by hackers or computer virus, and business interruption due to natural or man-made disasters.

Our business operation depends significantly on the reliability of our information system formedical centre administration, management of client information and financial information. There is noassurance that we can successfully maintain the satisfactory performance, reliability, security, andavailability of our information technology infrastructure. Such failure may be caused by unexpectednetwork interruptions, security breaches, attacks by hackers or computer virus.

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Further, our operations may be interrupted if any of our Medical Centres or information technology

infrastructure suspends operations due to the occurrence of events such as fire, flood, hardware and

software failure, loss of power, telecommunication failure, terrorist attack or other natural or man-made

disasters.

If any of the above events occur, our business operation may be disrupted for an indefinite period

of time, thereby damaging our reputation and materially and adversely affecting our business.

We have limitations in promoting or marketing our business.

We are required to comply with the Code of Professional Conduct for the Guidance of Registered

Medical Practitioners issued by the Medical Council. For details, please see the section headed

‘‘Regulatory Overview — Overview of Hong Kong Laws and Regulations — Undesirable Medical

Advertisements Ordinance (Chapter 231 of the Laws of Hong Kong)’’.

The limitation in promoting the business of our Group may affect our ability to further enhance

our brand recognition or secure new business opportunities in the future. Moreover, there is no

guarantee that our existing practices of monitoring our information dissemination process and

publication can continue to be effective. Should there be any change in the guidance, or change of

interpretation thereof, our professional team may be regarded as breaching the relevant codes and may

be subject to relevant disciplinary actions. Should there be any disciplinary actions against our

professional team, our reputation, business and results of operations could be materially and adversely

affected.

We have not entered into any long term supply agreements with our suppliers.

Currently, a majority of our pharmaceuticals and laboratory and imaging services are procured

from a limited number of suppliers. For the years ended 31 March 2019, 2020 and 2021 and the six

months ended 30 September 2021, purchases from our five largest suppliers amounted to HK$37.1

million, HK$47.0 million, HK$49.1 million and HK$26.9 million, respectively, representing 79.6%,

78.1%, 84.8% and 86.4% of our total purchase costs, respectively. For the same periods, our largest

supplier, accounted for 33.9%, 33.4%, 35.9% and 41.3% of our total purchases, respectively.

We have not entered into any long term supply agreements with our suppliers and there is no

assurance that they will continue to supply pharmaceuticals or laboratory and imaging services to us on

commercially reasonable terms, or at all, which could affect our ability to secure future supply and

provision of services. Further, we may not be able to find suitable alternative suppliers within a short

period of time, and as such, any shortage of or delay in the supply of the pharmaceuticals or laboratory

and imaging services to us may materially and adversely affect our operations. As a result, our financial

condition and results of operations could be materially and adversely affected.

RISKS RELATING TO OUR INDUSTRY

Our business operation is subject to extensive government regulations and any failure to complywith government laws, regulations or licensing requirements could harm our business, results ofoperations, financial condition, brand and reputation.

Our Group’s business operations, our medical practitioners and allied health professionals in Hong

Kong are subject to extensive laws, regulations and licensing requirements. Please refer to the section

headed ‘‘Regulatory Overview’’ for further information. If we fail to comply with such laws, regulations

RISK FACTORS

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and licensing requirements, our existing business operations and future expansion plans may be

negatively affected. Government policies governing the healthcare services industry may evolve and

change over time, and new or more stringent policies may be introduced. If we fail to comply with new

policies and regulations, or if such policy changes disrupt our Group’s business prospects or cause it to

incur additional costs, our Group’s business, results of operations and financial condition will be

negatively affected. In addition, there are various licensing requirements governing different aspects of

our Group’s business. Any failure to renew licences or any withdrawal of licences may result in the

imposition of penalties on our Group, or the suspension of our operations, which could materially and

adversely affect our business, results of operations and financial condition.

Further, the medical practitioners in Hong Kong have to comply with the codes of professional

conduct or discipline as applicable to them (the ‘‘Codes’’) which set out (i) the restrictions on the

promotion of the professional services and practice carried out by them or their group practice (with

certain exceptions, such as publication of service information on the website of a bona fide medical

practice group or in doctors directories); and (ii) restrictions on publication or marketing efforts for the

predominant purpose of promoting their products or services to customers or potential customers.

Practice promotion is interpreted in the broadest sense to include the failure to take adequate steps to

prevent publicity in circumstances which would call for caution. Should there be any inadvertent breach,

change in the guidance, or change of interpretation of the Codes, our medical practitioners may be

regarded as breaching the Codes and may be subject to relevant disciplinary actions. This could in turn

materially and adversely affect our Group’s reputation, business, results of operations and financial

condition.

Demand for our healthcare services is affected by macroeconomic conditions that are outside ofour control.

We operate in the private sector of the healthcare industry in Hong Kong. The demand for our

healthcare services is affected and will continue to be affected by a number of factors outside our

control. These factors include our competitiveness against our competitors in Hong Kong in terms of,

amongst others, fee levels, service network and variety of healthcare services provided. In addition,

certain macroeconomic factors, such as the overall affluence level and more importantly, the quality of

the public healthcare services provided by the government, are crucial to the performance in private

sector healthcare industry. We believe the increasing number of affluent population and the middle-class

will increase the demand for private healthcare services. If the public sector is able to provide quality

healthcare services competitively, both in terms of fee levels and waiting time for treatment, it will

affect the demand for healthcare services in the private sector. In such event, our business and financial

conditions as well as our operating results could be adversely affected.

Our business may be materially and adversely affected by the increasing trade and politicaltensions between the United States and China or Hong Kong.

As trade and political tensions continue to rise between the United States and China, including

with respect to Hong Kong itself, concerns exist among businesses in Hong Kong surrounding the

severity and scope of the adverse economic impact on Hong Kong. The trade and political frictions

between the United States and the China began to escalate in 2018. On 6 July 2018, the United States

began imposing additional tariffs on certain products that are manufactured in Mainland China, which

were subsequently increased to include various lists of products. In addition to the additional tariffs

imposed against the backdrop of the Sino-U.S. trade war, on 14 July 2020, United States President

Donald Trump signed the Hong Kong Autonomy Act 2020 and issued the Executive Order on Hong

RISK FACTORS

– 39 –


Kong Normalisation (the ‘‘EO’’). The EO rescinds the separate status that Hong Kong had enjoyed

under a variety of U.S. laws, including but not limited to extradition treaty, export controls and separate

travel territory. Furthermore, on 7 August 2020, the U.S. Department of Treasury imposed sanctions on

11 individuals, including certain Hong Kong government officials, pursuant to the EO. As a result of

these increasing tensions and sanctions, some Western business and their employees may decide to

relocate outside of Hong Kong, and we cannot assure you that our client base will not be adversely

affected. In addition, we cannot assure you that demand for our services will not decrease, as a result of

an economic downturn in Hong Kong driven by increasing trade tensions between the United States and

China or Hong Kong, as well as by adverse changes in diplomatic relations between the countries. As a

result, our business, financial condition, results of operations and prospects could be materially and

adversely affected.

We are subject to laws and regulations relating to the personal information of our clients. Anyfailure to adequately protect our clients’ personal data could expose us to liability.

All medical practitioners are required by the code of professional conduct applicable to them not to

disclose medical information of patients to any third party without the client’s consent, except in certain

specific circumstances.

In Hong Kong, we are also subject to the Personal Data (Privacy) Ordinance (Chapter 486 of the

Laws of Hong Kong), which limits the use of personal data of individual clients collected by us to such

purposes for which the personal data were collected, or for a directly related purpose.

We rely on certain internal control measures we have in place and on our medical practitioners and

our staff to abide by the relevant laws, and there was no incident on clients’ information leakage in the

past. Nevertheless, we cannot assure you that the confidentiality measures can completely prevent the

leakage of the clients’ information or prevent such information from being used for improper purposes.

Any breach of our confidentiality obligations towards the clients could expose us to potential claims or

litigation or breach of the relevant laws and regulations, which could have a material impact on our

business and financial conditions, operating results and business prospects.

RISKS RELATING TO THE [REDACTED] AND SHARES

There has not been any prior public market for the Shares and an active trading market may notdevelop.

An active trading market for the Shares may not develop and the trading price of the Shares may

fluctuate significantly. Prior to the [REDACTED], there has been no public market for the Shares. The

[REDACTED] has been determined through negotiation between our Company and the [REDACTED]

(for itself and on behalf of the [REDACTED]) and the final [REDACTED] may not be indicative of the

price at which the Shares will be traded following the completion of the [REDACTED]. In addition,

there is no assurance that an active trading market for the Shares will develop, or, if it does develop,

that it will be sustained following completion of the [REDACTED], or that the trading price of the

Shares will not decline below the [REDACTED].

The trading price of the Shares may also be subject to significant volatility in response to, among

others, the following factors:

. variations in our operating results;

. changes in the analysis and recommendations of securities analysts;

RISK FACTORS

– 40 –


. announcements made by us or our competitors;

. changes in investors’ perception of our Group and the investment environment;

. developments in the healthcare industry;

. changes in pricing made by us or our competitors;

. the liquidity of the market for the Shares; and

. general economic and other factors.

The trading volume and share price of the Shares may fluctuate.

The price and trading volume of the Shares may be highly volatile. Factors such as variations inour revenue, earnings and cash flow, announcements of new technologies, strategic alliances oracquisitions, loss of key personnel, changes in ratings by financial analysts and credit rating agencies,litigation or fluctuations in the market prices for the merchandise sold could cause large and suddenchanges in the volume and price at which the Shares will trade. In addition, the Stock Exchange andother securities markets from time to time experience significant price and volume fluctuations that arenot related to the operating performance of any particular company. These fluctuations may alsomaterially and adversely affect the market price of the Shares.

Future sales of substantial amounts of the Shares in the public market may adversely affect theprevailing market price of the Shares.

Except for the Shares issued in the [REDACTED], our Company has agreed with the[REDACTED] not to issue any of the Shares or securities convertible into or exchangeable for theShares during the period beginning from the date of this document and continuing through the datewhich is six months from the date on which dealings in the Shares commence on the Stock Exchange.Further, the Shares held by our Controlling Shareholders are subject to certain lock-up undertakings forperiods commencing on the date of this document and up to 12 months after the [REDACTED]. Pleaserefer to the section headed ‘‘[REDACTED] — [REDACTED] Arrangements and Expenses’’ for a moredetailed discussion of restrictions that may apply to future sale of the Shares. After these restrictionslapse, the market price of the Shares may decline as a result of sale of substantial amounts of the Sharesor other securities relating to the Shares in the public market, the issuance of the new Shares or othersecurities relating to the Shares, or the perception that such sales or issuances may occur. This may alsomaterially and adversely affect our ability to raise capital in the future at a time and at a price we deemappropriate.

You may experience immediate dilution and may experience further dilution if we issue additionalShares in the future.

If the final [REDACTED] of our [REDACTED] is higher than the net tangible assets value perShare immediately prior to the [REDACTED], subscribers and purchasers of our [REDACTED] willexperience an immediate dilution in the pro forma adjusted consolidated net tangible asset value perShare.

In addition, we may consider [REDACTED] and issuing additional Shares in the future forexpansion of our business or to the extent that our Shares are issued upon the exercise of Share options.In this regard, you may experience further dilution in the consolidated net tangible asset per Share if weissue additional Shares in the future at a price which is lower than the consolidated net tangible assetper Share.

RISK FACTORS

– 41 –


Our Controlling Shareholders have substantial control over our Company and their interests maynot be aligned with the interests of the other Shareholders.

Prior to and immediately following the completion of the [REDACTED], our Controlling

Shareholders will continue to have substantial control over our Company. Subject to the Articles of

Association, the Companies Ordinance and the Listing Rules, the Controlling Shareholders by virtue of

their controlling beneficial ownership of the share capital of our Company, will be able to exercise

significant control and exert significant influence over our business or otherwise on matters of

significance to us and other Shareholders by voting at the general meeting of the Shareholders. The

interests of the Controlling Shareholders may differ from the interests of other Shareholders and the

Shareholders are free to exercise their votes according to their interests. To the extent that the interests

of the Controlling Shareholders conflict with the interests of other Shareholders, the interests of other

Shareholders can be disadvantaged and harmed.

The laws of the Cayman Islands relating to the protection of the interests of minority shareholdersmay differ from the laws of Hong Kong and other jurisdictions.

Our corporate affairs are governed by, among other things, our Memorandum of Association and

Articles of Association, the Cayman Companies Act, and the common law of the Cayman Islands. The

rights of our Shareholders to take action against our Directors, the rights of minority shareholders to

instigate actions and the fiduciary responsibilities of our Directors to us under Cayman Islands law are

to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman

Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as

from English common law, which has persuasive, but not binding, authority on a court in the Cayman

Islands. The rights of our Shareholders and the fiduciary responsibilities of our Directors under Cayman

Islands law may not be the same as they would be under statutes or judicial precedent in Hong Kong or

other jurisdictions. In particular, the Cayman Islands have different securities laws as compared to Hong

Kong and may not provide the same protection to investors. Furthermore, shareholders of Cayman

Islands companies may not have standing to initiate a shareholder derivative action in a Hong Kong

court.

We may not declare dividends on our Shares in the future.

During the Track Record Period, we had declared and paid dividend to our Shareholders. The

amount of dividends actually distributed to our Shareholders will depend upon our earnings and

financial position, operating requirements, capital requirements and any other conditions that our

Directors may deem relevant and will be subject to the approval of our Shareholders. There is no

assurance that dividends of any amount will be declared or distributed in any year in the future. For

further details, see the section headed ‘‘Financial Information — Dividends and Dividend Policy’’.

There can be no guarantee as to the accuracy of facts and other statistics contained in thisdocument with respect to the economies and the industry in which we operate.

Certain facts and other statistics in this document are derived from various sources including

various official government publications and communications with various official government agencies.

Whilst our Group has exercised reasonable care to ensure that such facts and statistics presented are

accurately reproduced from their respective sources, the quality or reliability of such source materials

cannot be guaranteed and have not been prepared or independently verified by us, the Sole Sponsor, the

[REDACTED] or any of their respective directors, affiliates or advisers. Therefore we make no

representation as to the accuracy of such facts and statistics, which may not be consistent with other

RISK FACTORS

– 42 –


information compiled within or outside Hong Kong and the PRC. Due to possibly flawed or ineffective

collection methods or discrepancies between published information, market practice and other problems,

the official government statistics and unofficial statistics referred to or contained in this document may

be inaccurate or may not be comparable to statistics produced for other publications or purposes and

should not be relied upon. Furthermore, there is no assurance that they are stated or compiled on the

same basis or with the same degree of accuracy as may be the case elsewhere. In all cases, investors

should give consideration as to how much weight or importance they should attach to, or place on, such

facts or statistics.

You should rely on this document, and not place any reliance on any information contained inpress articles or other media, in making your investment decision.

You should rely only on the information contained in this document to make your investment

decision. We have not authorised anyone to provide you with information that is not contained in, or is

different from what is contained in, this document. Prior or subsequent to the publication of this

document, there has been or may be press and media coverage regarding us and the [REDACTED], in

addition to marketing materials published by us in compliance with the Listing Rules. We have not

authorised any such press and media reports, and the financial information, financial projections,

valuations and other information purportedly about us contained in such unauthorised press and media

coverage may be untrue and may not reflect what is disclosed in this document. We make no

representation as to the appropriateness, accuracy, completeness or reliability of any such information or

publication, and accordingly do not accept any responsibility for any such press or media coverage or

the inaccuracy or incompleteness of any such information. To the extent that any such information

appearing in the press and media is inconsistent or conflicts with the information contained in this

document, we disclaim it, and accordingly you should not rely on any such information. In making your

decision as to whether to purchase our Shares, you should rely only on the information included in this

document.

Forward-looking statements contained in this document are subject to risks and uncertainties.

This document contains certain statements that are ‘‘forward-looking’’ and indicated by the use of

forward-looking terms such as ‘‘aim’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’,‘‘expect’’,

‘‘intend’’, ‘‘ought to’’, ‘‘may’’, ‘‘plan’’, ‘‘potential’’, ‘‘project’’, ‘‘seek’’, ‘‘should’’, ‘‘will’’ or ‘‘would’’ or

similar expressions. You are cautioned that any forward-looking statement involves risks and

uncertainties and any or all of the assumptions relating to the forward-looking statements could prove

to be inaccurate. As a result, the forward-looking statement could be incorrect. The inclusion of

forward-looking statements in this document should not be regarded as a representation by us that the

plans and objectives will be achieved, and you should not place undue reliance on such statements.

RISK FACTORS

– 43 –


[REDACTED]

INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED]

– 44 –


[REDACTED]


– 45 –


[REDACTED]


– 46 –


DIRECTORS

Name Address Nationality

Executive Directors

Dr. Kenneth Tsang

(曾華德醫生)

Lower Town House 4

La Hacienda

27–33 Mount Kellett Road

The Peak

Hong Kong

Chinese

Dr. Adam Leung

(梁永雄醫生)

27/F, Argenta

63 Seymour Road

Mid-levels

Hong Kong

Chinese

Mrs. Chen Chou Mei Mei Vivien

(陳周薇薇女士)

3/F, 24 Oxford Road

Kowloon Tong, Kowloon

Hong Kong

Chinese

Mr. Shiu Shu Ming

(蕭恕明先生)

House C11

Fortune Garden

72 Ting Kok Road

Tai Po, New Territories

Hong Kong

Chinese

Independent non-executive Directors

Mr. David Michael Norman House A6, Mount Davis Village

6–10 Mount Davis Road

Pokfulam

Hong Kong

British

Mr. Ip Koon Wing Ernest

(葉冠榮先生)

Flat C, 26/F, Block 5

The Legend

23 Tai Hang Drive

Hong Kong

Chinese

Mr. Wong Kwok Shing Thomas

(汪國成先生)

Flat B, 4/F, Tower 5

Jubilant Place

99 Pau Chung Street

Tokwawan, Kowloon

Hong Kong

Chinese

For further information regarding our Directors, please refer to the section headed ‘‘Directors and

Senior Management’’.

DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED]

– 47 –


PARTIES INVOLVED IN THE [REDACTED]

Sole Sponsor and [REDACTED] China International Capital Corporation HongKong Securities Limited29/F, One International Finance Centre

1 Harbour View Street

Central

Hong Kong

[REDACTED] [REDACTED]

Legal Advisers to our Company As to Hong Kong law

K. B. Chau & Co.Unit B, 31/F, United Centre

No. 95 Queensway

Admiralty

Hong Kong

As to Hong Kong law in relation to

our business operations in Hong Kong

Hectar Pun S.C.Barrister-at-law and senior counsel of Hong Kong

9th Floor

One Lippo Centre

89 Queensway

Admiralty

Hong Kong

As to Cayman Islands law

Conyers Dill & Pearman29th Floor

One Exchange Square

8 Connaught Place

Central

Hong Kong


– 48 –


Legal Advisers to the Sole Sponsor andthe [REDACTED]

As to Hong Kong law

Norton Rose Fulbright Hong Kong38/F, Jardine House

1 Connaught Place

Central

Hong Kong

Auditor and Reporting Accountant PricewaterhouseCoopersCertified Public Accountants

Registered Public Interest Entity Auditor

22/F, Prince’s Building

Central

Hong Kong

Industry Consultant Frost & Sullivan Limited1706, One Exchange Square

8 Connaught Place

Central

Hong Kong

Property Valuer Knight Frank Petty Limited4/F, Shui On Centre

6–8 Harbour Road

Wanchai

Hong Kong

[REDACTED] [.]


– 49 –


Registered Office in the Cayman Islands Cricket Square

Hutchins Drive

P.O. Box 2681

Grand Cayman

KY1-1111

Cayman Islands

Head Office and Principal Place ofBusiness in Hong Kong

13/F, Pacific House

20 Queen’s Road Central

Hong Kong

Company’s Website Address http://www.hkmedicalconsultants.com

(The contents on this website do not form part of the

document)

Company Secretary Ms. Kwan Wai Ling (HKICPA)

Authorised Representatives Mr. Shiu Shu Ming

House C11

Fortune Garden

72 Ting Kok Road

Tai Po, New Territories

Hong Kong

Ms. Kwan Wai Ling

Flat E, 17/F, The Spectacle

8 Cho Yuen Street

Yau Tong, Kowloon

Hong Kong

Audit Committee Mr. Ip Koon Wing Ernest (Chairman)

Mr. David Michael Norman


Remuneration Committee Mr. Wong Kwok Shing Thomas (Chairman)



Dr. Kenneth Tsang

Mr. Shiu Shu Ming

Nomination Committee Dr. Kenneth Tsang (Chairman)




Mr. Shiu Shu Ming

CORPORATE INFORMATION

– 50 –




Compliance Adviser China Everbright Capital Limited12/F, Everbright Centre

108 Gloucester Road

Wan Chai

Hong Kong

Principal Banks Shanghai Commercial Bank LimitedShanghai Commercial Bank Tower

12 Queen’s Road Central

Hong Kong

Hang Seng Bank Limited83 Des Voeux Road Central

Central

Hong Kong

Bank of Communications (Hong Kong) LimitedShop 2–3, G/F., Tung Fai Building

161–165 Shau Kei Wan Main Street East

Hong Kong

Bank of China (Hong Kong) Limited2/F, Wing On House

71 Des Voeux Road Central

Hong Kong

CORPORATE INFORMATION

– 51 –


The information contained in this section, unless otherwise indicated, has been derivedfrom various official government publications and other publications generally believed to bereliable and the market research report prepared by Frost & Sullivan which we commissioned.We believe that the sources of such information are appropriate sources for such informationand have taken reasonable care in extracting and reproducing such information. We have noreason to believe that such information is false or misleading in any material respect or that anyfact has been omitted that would render such information false or misleading in any materialrespect. None of our Company, the Sole Sponsor, the [REDACTED], the [REDACTED] and the[REDACTED] or any of our or their respective directors, officers or representatives or anyother person involved in the [REDACTED], except for Frost & Sullivan, has independentlyverified such information or gives any representation as to the accuracy or completeness of suchinformation. As such, you should not unduly rely upon such information in making, orrefraining from making, any investment decision.

SOURCE OF INFORMATION

We have commissioned Frost & Sullivan, an independent market research and consulting company,to conduct an analysis of, and to prepare a report on the private specialist medical centre market inHong Kong. The report prepared by Frost & Sullivan for us is referred to in this document as the Frost& Sullivan Report. We agreed to pay Frost & Sullivan a fee of HK$600,000 which we believe reflectsmarket rates for reports of this type.

Founded in 1961, Frost & Sullivan has 45 offices with more than 1,200 industry consultants,market research analysts, technology analysts and economists globally. Frost & Sullivan’s servicesinclude technology research, independent market research, economic research, corporate best practicesadvising, training, client research, competitive intelligence and corporate strategy.

We have included certain information from the Frost & Sullivan Report in this document becausewe believe this information facilitates an understanding of the private specialist medical centre market inHong Kong for the prospective investors. The Frost & Sullivan Report includes information about theprivate specialist medical centre market in Hong Kong as well as other economic data, which have beenquoted in the document. Frost & Sullivan’s independent research consists of both primary and secondaryresearch obtained from various sources in respect of the private specialist medical centre market in HongKong. Primary research involved in-depth interviews with leading industry participants and industryexperts. Secondary research involved reviewing company reports, independent research reports and databased on Frost & Sullivan’s own research database. Projected data were obtained from historical dataanalysis plotted against macroeconomic data with reference to specific industry-related factors. Exceptas otherwise noted, all of the data and forecasts contained in this section are derived from the Frost &Sullivan Report, various official government publications and other publications.

In compiling and preparing the research, save for the foreseeable impact of the COVID-19outbreak, Frost & Sullivan assumed that the social, economic and political environments in Hong Kongare likely to remain stable in the forecast period, which ensures the steady development of the privatespecialist medical centre market in Hong Kong. Frost & Sullivan also assumed that the outbreak ofCOVID-19 in Hong Kong would be under effective control in 2021 with a gradual resumption ofeconomic performance thereafter, as supported by (i) declining trend of newly reported COVID-19 casesin Hong Kong since the second quarter of 2021 and (ii) commencement of COVID-19 vaccinationprogramme in Hong Kong since first quarter of 2021, with a increasing vaccination rate thereafter.

OVERVIEW OF MACROECONOMIC ENVIRONMENT IN HONG KONG

Population and Age Structure

Due to the rising number of new borns and immigrants, as well as an increase in life expectancy,the total population in Hong Kong has experienced a growth from 7.3 million in 2015 to 7.5 million in2020, representing a CAGR of approximately 0.3%. It is forecast that total population will continuouslyrise at a CAGR of approximately 0.7% from 2021 to 2025.

INDUSTRY OVERVIEW

– 52 –


An ageing population along with the continuous increase in life expectancy are expected tocontribute to higher demand for healthcare services in Hong Kong. In particular, the population aged 65and above increased considerably from 1.1 million in 2015 to 1.4 million in 2020, representing a CAGRof approximately 3.6%, and this number is expected to increase at a CAGR of approximately 4.4% from2021 to 2025. In addition, Hong Kong has been one of the top ranked cities in terms of life expectancy.According to Food and Health Bureau of Hong Kong, the average life expectancy of populationrecorded a steady growth from 84.4 years in 2015 to 85.4 years in 2020.

Health Expenditure

The total health expenditure in Hong Kong increased at a CAGR of approximately 6.6% fromHK$137.5 billion in 2015 to HK$189.6 billion in 2020, largely driven by both rising public and privatehealth expenditure during the period. Public health expenditure and private health expenditure wasHK$96.8 billion and HK$92.8 billion, respectively in 2020, representing a CAGR of approximately7.5% and 5.8%, respectively from 2015 to 2020.

Looking forward, the total health expenditure in Hong Kong is expected to rise at a CAGR ofapproximately 7.8% from 2021 to 2025, mainly driven by the ageing population and rising demand forhealthcare services. In particular, private expenditure on healthcare is forecasted to witness a CAGR ofapproximately 8.1% from 2021 to 2025, benefiting from increased purchase of insurance and theVoluntary Health Insurance Scheme promoted by the government.

Total health expenditure by sector (Hong Kong), at current price, 2015–2025E

0

50

100

150

200

250

300

137.5

67.4 75.5 80.0

70.1 72.5 76.9

85.1

81.8

90.3 96.8 104.4

86.7 92.8 99.6

112.2

107.3

120.2

116.4

139.7

135.8

148.0 156.9 166.9 177.0 189.6204.0

219.5236.6

275.5

129.9

125.4

255.3

6.6%7.5%5.8%

7.8%7.5%8.1%

Billion HK$

CAGR 2015−2020 2021E−2025EOverall

Public Sector

Public

Private

Private Sector

2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2025E2024E

Source: Food and Health Bureau of Hong Kong, Frost & Sullivan

Gross Insurance Premiums for Accident and Health

The growth and availability of health insurance products are likely to increase the affordability anduse of private medical services for the general public in Hong Kong. Due to growing healthconsciousness and penetration of health insurance, the gross premiums of general accident and healthinsurance has registered considerable growth from HK$13.6 billion in 2015 to HK$17.3 billion in 2020,representing a CAGR of approximately 4.9%. To relieve the pressure on the public sector and broadenthe source of healthcare financing, the Food and Health Bureau launched the Voluntary Health InsuranceScheme in April 2020, offering tax incentives for individuals to purchase insurance products. Therefore,the gross premiums for accident and health insurance are projected to rise at a CAGR of approximately7.9%, from HK$18.6 billion in 2021 to HK$25.2 billion in 2025.

Gross Premiums for General Accident and Health Insurance Business (Hong Kong), 2015–2025E

0

5

10

15

20

25

30

13.6 14.015.7

17.1 18.3 17.3 18.620.2

21.923.7

25.24.9% 7.9%

Billion HK$

CAGR2015−2020 2021E−2025E

2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E

Source: Insurance Authority, Frost & Sullivan

INDUSTRY OVERVIEW

– 53 –


OVERVIEW OF PRIVATE SPECIALIST MEDICAL CENTRE MARKET IN HONG KONG

Classification of Private Medical Service Providers

Private hospitals and private medical centres are the major healthcare service providers under theprivate sector in Hong Kong. Private medical centres in Hong Kong are generally operated by individualdoctors or by an affiliated medical network of clinics, in which their services can be further classified asprivate general practice services, private specialist services and private allied health services.

1. Private general practice services include care services to chronic diseases patients with stableconditions and episodic disease patients with relatively mild symptoms.

2. Private specialty medical services cover particular healthcare services, including advanceddiagnostic or treatment for specific diseases or specialised curative services to a certain partof the body of patients.

3. Private allied health services cover extended care services offered by healthcare professionalsin specialised field apart from general practice and specialist medical services. Examples ofallied health services include non-medical doctor provided medical services such as clinicalpsychology, speech therapy, nutritional therapy, psychological counselling and imaging,diagnostic and laboratory services.

Healthcare service providers in Hong Kong

Private healthcare institutions Public healthcare institutions

Private nursing home

Private allied health services

Private medical centre

Private specialist servicesPrivate general practice services

Private hospital

denotes market segments of our Group

Source: Frost & Sullivan

Operation Models of Private Medical Centre

Private medical centres can be further categorised into two groups by type of business models,namely individual private medical centre and private medical platform. An individual private medicalcentre is usually operated by an individual as a sole proprietor. Private medical platform refers to anetwork of affiliated medical centres with multiple locations. Larger-scale private medical platformsusually consist of both general practice services and a variety of specialist practice services, withmedical practitioners under different specialties offering a range of services to patients.

The key features of individual private medical centres and private medical platforms are set outbelow:

Individual private medical centre Private medical platforms

. Recurrent patients in close proximity toresidential or commercial areas are the targetcustomers of individual private medicalcentres. Therefore, the good reputation of themedical practitioner is important and willattract more patients.

. Due to the large number of individual privatemedical centre in Hong Kong, individualprivate medical centres usually provide analternative option and certain degree offlexibility for patients in respect of location,waiting time and appointment.

. The medical practitioner in an individualprivate medical centre is required to bear allthe costs including rental and administrativecost, and other miscellaneous operationalexpenses.

. Private medical platforms usually offercomprehensive healthcare services under asingle brand, such as general practiceservice, specialist practice service in onecentre or through affiliated centres andoptions of cross-specialist treatments.

. Large-scale medical platforms offer servicesthrough a widespread network of medicalcentres to cater for patients in differentgeographical areas.

. Private medical platforms usually haveadopted quality assurance and enhancementmeasures for their medical centres to ensurestandard operation procedures and qualitycontrol, which will increase the confidenceof patients.

INDUSTRY OVERVIEW

– 54 –


Individual private medical centre Private medical platforms

. Due to the larger number of medicalpractitioners and increased size of patientbase, private medical platforms are usuallybetter able to manage financial risks andprovide employee benefits, with enoughresources to purchase advanced medicalequipment, drugs and/or consumables.

. Medical platforms are under centralisedmanagement which can achieve economiesof scale with cost savings by sharing rentalexpenses and administrative cost amongstmedical practitioners; and provides enhancedbrand awareness to attract talented medicalpractitioners and for referral of patientsthrough allied practitioners.

. Medical platforms are able to more readilyfulfil regulatory requirements, especially thenew regulations such as PHFO and the dayprocedure centre requirements thereunderthat came into operation in January 2021.


Industry Practice of Insurance Coverage for Medical Practitioners and Private Medical Centres

According to the Code of Professional Conduct issued by the Medical Council of Hong Kong,although it is not a mandatory requirement, a medical practitioner should assess the risks of his or herpractice and ability to pay the potential compensation awards and the legal costs of defending themedical negligence claims, and obtain proper insurance coverage (i.e. professional indemnity insurance),and some areas of medical practice involve statistically higher risks of claim than others. In addition, itis an industry norm for individual medical specialists at both individual private medical centres andprivate medical platforms to purchase professional indemnity insurance on their own behalf.

Total Outpatient Volume in Private Medical Centres

Outpatient visits generally refer to patients who visit a hospital or a medical centre for treatmentwithout staying overnight. Private general practice medical centres and private specialist medical centresaccount for the largest share of outpatient visits in the private healthcare market. Driven by the ageingpopulation, limited capacity of public healthcare institutions and increasing affordability for patients inrecent years due to insurance, the number of outpatient visits in private general practice medical centresand private specialist medical centres in Hong Kong recorded a moderate growth during 2015 to 2019.However, as a result of social distancing measures and general apprehension of visiting medicalfacilities due to the COVID-19 outbreak in 2020, the number of outpatient visits in private generalpractice medical centres and private specialist medical centres in Hong Kong recorded a decline in 2020,resulting in a CAGR of –0.2% and –0.3%, respectively, during 2015 to 2020. Subsequent to the controlof COVID-19 outbreak, the number of outpatient visits in private general practice medical centres andprivate specialist medical centres in Hong Kong is expected to increase at a CAGR of 1.7% and 1.9%,respectively during 2021 to 2025.

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The chart below sets out the total number of outpatient visits in private medical centres in HongKong for the period indicated.

Total number of outpatient visits in private medical centres (Hong Kong), 2015–2025E

7.4

24.5

7.5 7.7 7.9 8.0 7.3 7.5 7.7 7.9 8.0 8.1

24.9 25.4 25.9 26.224.2 25.1 25.7 26.1 26.5 26.8

−0.2%−0.3%

1.7%1.9%

0

5

10

15

20

25

30

Million visits

CAGR 2015−2020 2020E−2025EPrivate general practice medical centresPrivate specialist medical centres

Private general practice medical centres

Private specialist medical centres

2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E

Note:

(1) The chart includes outpatient visit in Western medicine related institutions only.


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Revenue of Private Specialist Medical Centres and Average Spending of Patients

Despite the relatively lower outpatient volume as compared to private general practice medicalcentres, the market revenue of private specialist medical centres in Hong Kong is higher than that ofprivate general practice medical centres due to provision of more diverse medical services fromconsultation, diagnosis, examination, and different options of treatment from medications to proceduresunder one or more specialties to patients with generally a higher service fee.

With the increasing affordability, average patient spending and demand for specialist medicalservices, the market revenue of private specialist medical centres increased from approximately HK$13.9billion in 2015 to HK$16.1 billion in 2020, representing a CAGR of 3.0% and is expected to increasefurther at a CAGR of 5.0% from 2021 to 2025. The growth rate of revenue of private specialist medicalcentres in Hong Kong is higher than that of private general practice medical centres primarily due to theincreasing spending of specialist services by patients, coupled with the preference of patients to obtainspecialist medical advice and growing affordability for specialist medical services.

The following charts set out the revenue of private medical centres and average spending of patientin private medical centres per visit in Hong Kong.

Revenue of private medical centres (Hong Kong), 2015–2025E

13.9

10.9

14.515.5 16.8 17.6

16.117.0 18.0

19.1 19.9 20.7

11.2 11.5 11.7 11.9 11.0 11.5 11.8 12.1 12.3 12.5

0.2%3.0%

2.1%5.0%

0

5

10

15

20

25

Billion HK$




2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E

Notes:

(1) The revenue of private general practice medical centres and private specialist medical centres include revenue generatedfrom outpatient services only.

(2) The chart includes revenue of Western medicine related institutions only.


Average spending per patient visit in private medical centres (Hong Kong), 2015–2025E

1,881

443

1,935 2,0152,125 2,195 2,206 2,268 2,338 2,415 2,492 2,555

450 451 453 455 455 457 458 462 464 465

0.5%3.2%

0.4%3.0%

0

1,000

2,000

3,000

HK$




2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E


As compared to private medical centres with only general practitioners, private specialist medicalcentres generally have advanced equipment, facilities and supplies, and provide targeted medicaldiagnosis, treatment and minor surgery to address illness, which generally involves a longer treatmentcourse as compared to general practitioners. In contrast, general practitioners typically offer a primarylevel of consultation and treatment to patients and refer patients to specialist for a more advanced anddetailed diagnostic, consultation and/or treatment through outpatient services in medical centre andinpatient services in private hospitals, which is common in the market. In addition, medicalappointments are often required for private specialist medical centres especially for those operated byexperienced and reputable specialists, and such renowned private specialist medical centres are generallylocated in prime areas such as Central, Tsim Sha Tsui and Mong Kok in Hong Kong.

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Market Size of Dermatology Centres, Dental Centres and Diagnostic Centres in Hong Kong

Dermatology centres

The market demand for dermatological services in Hong Kong is likely to increase in future. Skindiseases, such as eczema or dermatitis, are common in Hong Kong due to the humid weather andstressful lifestyle of residents. According to the Hong Kong Allergy Association, one in five people inHong Kong suffers from eczema. In addition, similar to other medical specialties, demand fordermatologist remains high with limited capacity in Hong Kong. According to the Department of Health,although there were over 300,000 patients seeking treatment from the public sector and the majority ofcurrent market demand needs to be addressed by the private sector. Apart from treatment of skindiseases, aesthetic dermatology, which also involve treatments or procedures to improve the skinappearance of patients is in high demand.

Revenue, average spending per patient visit andpatient volume of dermatology centre in Hong Kong, 2015–2025E

Unit 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E

CAGR(2015–2020)

CAGR(2021E–2025E)

Revenue Million HK$ 1,133.3 1,202.7 1,260.4 1,368.9 1,432.9 971.9 1,255.6 1,363.9 1,528.1 1,714.8 1,863.2 –3.0% 10.4%Average spending per

patient visit HK$ 1,384.6 1,384.6 1,437.2 1,494.7 1,550.0 1,562.4 1,599.9 1,655.9 1,707.2 1,772.1 1,830.6 2.9% 3.4%Patient volume Million 0.8 0.9 0.9 0.9 0.9 0.6 0.8 0.8 0.9 1.0 1.0 3.0% 5.7%


Dental centres

The market demand for dental services in Hong Kong has been growing along with (i) theincreasing awareness towards the importance of dental care, (ii) an ageing population and (iii) anincreasing demand for orthodontic services, a sub-specialty of dentistry that involves diagnosis,prevention and correction of mal-positioned teeth and jaws. In particular, demand for orthodonticservices for beauty and aesthetic purposes such as teeth alignment have been on the rise for youngerindividuals. Visitors from Mainland China seeking orthodontic services in Hong Kong is also expectedto increase in the future.

Revenue, average spending per patient visit andpatient volume of dental centre in Hong Kong, 2015–2025E

Unit 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E

CAGR(2015–2020)

CAGR(2021E–2025E)

Revenue Million HK$ 1,366.3 1,443.8 1,510.9 1,602.8 1,706.8 1,505.7 1,629.7 1,762.5 1,886.2 2,008.9 2,139.4 2.0% 7.0%Average spending per

patient visit HK$ 580.0 600.3 617.1 642.4 669.4 683.4 700.5 721.6 744.6 770.7 799.2 3.6% 3.3%Patient volume Million 2.4 2.4 2.4 2.5 2.5 2.2 2.3 2.4 2.5 2.6 2.7 2.0% 3.6%


Diagnostic centres

The growing awareness toward general health and wellness amongst Hong Kong residents, ageingpopulation as well as drive the demand for health checks and diagnostic services for detection of illnessand disorders. In recent years, the emergence of diagnostic centres equipped with specialised andadvanced machines for specimen testing, CT scan, magnetic resonance imaging and ultrasound can offerpatients a comprehensive and professional diagnostic services with convenience of being diagnosedbased on their medical needs.

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Revenue, average spending per patient visit andpatient volume of diagnostic centre in Hong Kong, 2015–2025E

Unit 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E

CAGR(2015–2020)

CAGR(2021E–2025E)

Revenue Million HK$ 2,636.2 2,787.8 2,937.5 3,096.3 3,301.2 3,469.2 3,681.6 3,824.1 4,015.3 4,214.8 4,423.2 5.6% 4.7%Average spending per

patient visit HK$ 2,170.8 2,262.0 2,345.7 2,420.7 2,520.0 2,542.7 2,574.0 2,656.3 2,730.7 2,803.6 2,878.5 3.8% 2.8%Patient volume Million 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.4 1.5 1.5 1.5 2.0% 1.7%


Demand and Supply of Medical Practitioners in Hong Kong

With the steady growth and an ageing population, the demand for medical services remains strongin Hong Kong. The total number of medical practitioners witnessed moderate growth fromapproximately 13,726 in 2015 to 15,050 in 2019, representing a CAGR of 2.3% while the number ofspecialist practice practitioners increased from approximately 6,520 in 2015 to 7,300 in 2019,representing a CAGR of 3.8%. According to Food and Health Bureau of Hong Kong, there is onlyapproximately 2.0 medical practitioners per thousand population in Hong Kong in 2020, which is lowerthan other developed countries such as the United States and United Kingdom, which have ratios of 2.6and 2.8 per thousand, respectively. This ratio is even lower for specialist medical practitioners with only1.0 specialist per thousand population in Hong Kong. In particular, the number of experienced medicalspecialists is highly limited in Hong Kong due to strict regulations taken by the Medical Council ofHong Kong for introducing foreign medical practitioners, and the demand for specialist practicepractitioners and, especially practitioners in certain specialties such as geriatrics, oncology,ophthalmology and neurosurgery has grown significantly in recent years.

To relieve the shortage of medical practitioners, the Hong Kong Government and HospitalAuthority have taken different initiatives to maintain sufficient manpower, which includes theimplementation of Special Retired and Rehire Scheme (SRRS) in 2015 to rehire medical practitionersreaching the retirement age, increase in quota of internship training for medical graduates and othermeasures to attract and retain medical practitioners.

Market Drivers and Opportunities

Limited capacity in public healthcare institutions

A rapidly expanding and ageing population is putting strain on healthcare service providers.Limited capacity and manpower in the public healthcare sector will contribute to the shifting demandfrom the public healthcare sector to private healthcare sector. According to Hospital Authority, theaverage inpatient bed occupancy rate in 2019/20 was 88.9%. In particular, total occupancy rate ofinpatient beds topped 100% during the peak season of seasonal influenza, which reflects that somepublic hospitals were operating beyond maximum capacity. In addition, the over-reliance on publichealthcare services has resulted in the long waiting time for healthcare services in the public sector. Forexample, from 1 July 2019 to 30 June 2020, the waiting time for stable new case booking at specialistoutpatient clinics generally exceeded 50 weeks for most specialties. In particular, the waiting time forinternal medicine outpatient services ranged from 104 weeks to 157 weeks. In order to reduce theburden of public healthcare sector, the General Outpatient Medical Centre Public-Private PartnershipProgramme (GOPC PPP) was launched in mid-2014 which provides an option for patients with stableconditions in public general outpatient medical centre to receive treatment from private medicalpractitioners. Accordingly, the limited capacity and long waiting hours of public healthcare institutionsare driving the shift in demand from the public healthcare sector towards the private healthcare sector.

Increasing financial incentives and government-subsidised schemes

The rapidly ageing population in Hong Kong is helping drive the demand for private medicalservices as the prevalence and incidence of disorders and chronic diseases among the elderly grow. Inorder to supplement existing public healthcare services (e.g. general and specialist outpatient clinics),and enhance the primary care services to the elderly, the government launched the Elderly Health CareVoucher (‘‘EHV’’) Pilot Scheme in 2009 by providing financial incentive for elderly people to chooseprivate healthcare services for both curative and preventive care. The EHV Scheme was subsequently

INDUSTRY OVERVIEW

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converted into a recurrent programme in 2014 and the amount of the voucher increased subsequently.According to the Research Office of Legislative Council, government expenditure on elderly healthservices rose from HK$960.3 million in 2014/15 to HK$3,418.1 million in 2019/20, representing aCAGR of approximately 37.4%. Meanwhile, the Colorectal Cancer Screening Programme wasregularised in 2018 to subsidise residents aged 50 to 75 to receive screening services from the privatemedical service sector for the prevention of colorectal cancer. In addition, the Vaccination SubsidyScheme enables private medical centres to provide pneumococcal vaccination for the elderly. Therefore,the increasing amount of financial incentives and government schemes and subsidises available in HongKong have been a driving force in private medical service market.

Expansion of medical insurance coverage

Driven by the growing health consciousness and penetration of health insurance, the grosspremium of general accident and health insurance rose from HK$13.6 billion in 2015 to HK$17.3 billionin 2020, representing a CAGR of approximately 4.9%. To cater for the rising demand for premiumhealthcare services and specialist healthcare services, insurance companies are also expanding thecoverage of medical insurance packages. The expansion of medical insurance encourages people topursue premium healthcare and the use of private healthcare service, which brings business opportunitiesfor private medical service providers.

Recovery of medical tourism

Hong Kong has been an established destination for medical tourism, which is primarily attributableto (i) high-quality of medical services and modern procedures, (ii) well-trained multi-lingual medicalprofessionals, (iii) first-class medical infrastructure, (iv) exceptional geographical location in closeproximity to the PRC and other cities in Asia and (v) well established infrastructure and attractions fortourism. Specifically, Hong Kong has also been one of the leading cities with an efficient healthcaresystem, and is renowned for cancer treatment with availability of full range of medical proceduresavailable in the private and public sector, as well as the combination of Chinese-Western medicaltreatments. The private medical service sector in Hong Kong has been gaining popularity amongstMainland Chinese visitors demanding high-quality medical services such as consultation and treatmentby reputable specialists, health check-ups and access to a wide variety of authentic medications andvaccines. Historically, the total visitor arrivals from the Mainland China recorded an overall growthfrom approximately 45.8 million in 2015 to 51.0 million in 2018, followed by a decline toapproximately 43.8 million in 2019 and 2.7 million in 2020 due to the social unrest in Hong Kong andtravel restrictions due to the COVID-19 outbreak. The outlook of medical tourism in Hong Kong isexpected to be positive in a long term after the end of the COVID-19 outbreak and social unrest thathave been hindering tourist arrivals. Economic recovery after the COVID-19 outbreak subsides isexpected to benefit the business of private specialist medical centres in Hong Kong.

Market Trends

Development of telemedicine and health promotion channels

The development of leading technologies is stimulating innovation to improve the efficiency andeffectiveness of healthcare services. For example, high smartphone penetration rate, rapid developmentof mobile applications with growing popularity, and increasing health awareness have contributed to theemergence of telemedicine services including over-the phone and video consultations. The provision oftelemedicine is expected to be a key trend amongst private medical services providers in Hong Kong. InDecember 2019, the Medical Council of Hong Kong issued specific ethical guidelines on practice oftelemedicine in Hong Kong and the outbreak of COVID-19 has further contributed to the popularity oftelemedicine due to social-distancing measures and patients screening measures adopted by medicalcentres. On the other hand, the rapid growth of social media platforms and forums facilitate the sharingof health information between medical centre operators, medical practitioners and patients, which furtherincreased the overall health awareness in Hong Kong.

Increasing awareness in health and demand for premium healthcare service

High education levels and income in Hong Kong drive the increasing awareness towards theimportance of quality healthcare services among Hong Kong residents. People are willing to spend moreon premium and high-quality healthcare services. Private medical centres are generally considered to beof higher quality as compared to public ones and are preferred by patients seeking premium healthcareservices. Recent years have witnessed the emergence of medical concierge services within private

INDUSTRY OVERVIEW

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medical centres targeting patients with busy schedules that demand premium services. Medical conciergeservices provide patients with a one-stop health check-up and medical care solution with personalisedassistance. Furthermore, in view of the growing medical tourism from Mainland China tourists who seekprofessional healthcare and medical consultation in Hong Kong, especially for specialist services such asdermatology, oncology, gynaecology and obstetrics, the provision of medical concierge services isexpected to be a key market trend.

Growth of integrated specialty medical platforms

Private specialist medical centres are becoming increasingly popular among Hong Kong residentswith healthcare revenue rising from HK$23.1 billion in 2015 to HK$28.6 billion in 2019, representing aCAGR of approximately 5.4%. The growth was largely driven by the long waiting time in the publicsector due to limited capacity and the complicated procedures to obtain diagnosis and treatment. Inaddition, relatively wealthy residents have shown a strong preference towards renowned and experiencedspecialists in certain specialties including dermatology, oncology, ophthalmology, neurosurgery,cardiology, etc. With the expanding coverage and use of medical insurance, people emphasise timevalue and quality, and are more willing to choose private medical centres for treatment. Integratedhealthcare service providers with a network of medical centres usually have various specialties andlarger geographical coverage, and such medical centres lead the private medical centre market in HongKong. Facing increased competition, smaller private medical centres are seeking to join medicalplatforms and affiliated network of medical centres for better resources and access to potential patients.Therefore, market consolidation and growth of integrated specialty medical platform is a major markettrend in Hong Kong.

Remuneration Model and Average Monthly Income of Private Specialist Doctors

The remuneration rate payable to a specialist doctor, being the percentage of total service fee tonet revenue (i.e. revenue derived by a specialist doctor, after deduction of consumables and expensesdirectly attributable to the relevant specialist doctor’s practice) varies depending on the seniority,expertise and qualification of the specialist doctor. Different healthcare service providers offer differentforms of remuneration (for example, fixed salary, profit-sharing at certain ratio or amount, and/or acombination of the above) to the specialist doctor, and the remuneration packages vary greatly amongstspecialties and seniority of specialists which also is subject to commercial negotiation between themedical practitioners and the healthcare service providers.

In the case of profit-sharing, the service fee to profit ratio between the specialist doctor and theprivate medical centre generally fall into the range between 50:50 and 60:40 subject to seniority andprofit-making potential of the particular specialist doctor.

On average, the monthly income of specialist doctors grew from approximately HK$180,000 in2015 to approximately HK$206,500 in 2020, representing a CAGR of 2.8%. The income level of thespecialist doctor generally varies with his or her number of patient visits or hospital admissions. Ingeneral, the annual percentage change in remuneration payable to a specialist doctor in Hong Kongrange from 1% to 5%. Going forward, the average monthly income of specialist doctors in Hong Kongis expected to grow at a CAGR of 3.4% from 2021 to 2025.

COMPETITIVE LANDSCAPE OF THE PRIVATE MEDICAL CENTRE MARKET IN HONGKONG

Overview of Market Competition

The private medical centre market is highly competitive and fragmented. For example, according toFrost & Sullivan, there were over 3,000 private healthcare service providers in Hong Kong registered onthe electronic health record sharing system of Department of Health in 2020 and the majority areoperated as private medical centres. In addition, there were more than 60 medical networks (i.e. serviceproviders with operations of more than two medical centre outlets) in Hong Kong in 2020. According toFrost & Sullivan, the top 10 private multi-specialties medical centre operators accounted for anapproximate market share of 19.4% in terms of revenue in 2020.

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Top 10 private multi-specialties medical centre operators in Hong Kong by revenuegenerated from provision of specialist medical services, 2020

701.6 4.4%

4.1%

1.9%

1.6%

1.5%

1.4%

1.3%

1.2%

1.1%

1.0%

656.3

309.3

257.3

247.0

218.0

204.1

191.6

175.4

166.9

Company A

Company B

Revenue (million HK$) Market share (%)

Company C

Company D

Company E

Our Group

Company F

Company G

Company H

Company I

Market participants

Approximatenumber of

self-operatedmedical centres in

2020

Approximatenumber ofspecialistsin 2020

Company A 85 94Company B 18 64Company C 5 34Company D 44 33Company E 94 44

Our Group 6 20

Company F 2 20Company G 2 23Company H 2 17Company I 5 18

Notes:

(1) The market share above is calculated based on revenue generated from operation of privately owned medical centres, andinclude inpatient services provided at private hospitals by specialist doctors from medical centres and revenue generatedfrom sales of pharmaceuticals to patients. Revenue generated from managed care services, diagnostic and imaging service isexcluded in the calculation of market share. The revenue of the respective market participants is compiled with reference tothe factors such as number of medical specialists including internists and surgeons, year of practice, and service fee.

(2) Company A is a leading chained private medical group in Hong Kong founded in 1998 with approximately over 80 medicalspecialists in 2019 and is a part of an international healthcare and insurance group based in United Kingdom.

(3) Company B was established in 2018 with approximately over 60 specialists offering multi-disciplinary medical services inmedical centres located in Central and Tsim Sha Tsui.

(4) Company C was established in 2006 as a multi-specialty medical group with approximately over 30 medical specialistsoffering a wide range of medical specialty services through their centres in Central and Tsim Sha Tsui.

(5) Company D was founded in 1990 with approximately over 30 medical specialists providing customised healthcare solutionsto corporations, institutions and insurance companies in Hong Kong with joint ventures in the PRC. Company D was listedon the Main Board of the Stock Exchange of Hong Kong in 2015.

(6) Company E was founded in 1989 with its core businesses in healthcare business investment, provision and management ofhealthcare and related services with approximately 40 medical specialists. Company E was listed on the Main Board of theStock Exchange of Hong Kong in 2008.

(7) Company F was founded in 2004 and comprise over approximately 20 medical specialists mainly in the surgical specialtiessuch as breast surgery, cardiothoracic surgery and colorectal surgery.

(8) Company G is a multi-specialty medical group that primarily engages in the medical consultation and diagnostic services,laboratory services, and other health consultation services through the medical centres in Central and Tsim Sha Tsui.

(9) Company H was founded in 2005 and comprises a team of approximately over 15 experienced medical specialists indifferent specialties, especially in orthopaedics and traumatology and general surgery, practising in Hong Kong and majorcities of Mainland China.

(10) Company I was founded in 2015 with approximately over 20 medical specialists offering comprehensive medical servicesunder general practice and different specialties, as well as allied health services through the medical centre in Centraldistricts in Hong Kong offering general practice medical services, specialist medical services, dental and optometry services.

(11) Revenue of the Group is based on revenue of HK$218.0 million generated by 21 specialist doctors (internists) for the yearended 31 March 2021.


Market Ranking of Our Group

As compared to other leading private multi-specialties medical centre operators, the medicalspecialists of our Group are all specialist in various fields of internal medicine (i.e. internists) and aredifferent from surgeons which mainly conduct surgeries at hospitals. They are also distinguishable inrespect of qualifications, scope of service, service fee and number of patients per day.

According to Frost & Sullivan, our Group (i) ranked first in terms of revenue per internist, (ii)ranked fourth in terms of total revenue generated by internists and (iii) ranked sixth in terms of totalrevenue generated by provision of specialist medical services (which includes both internal medicine andsurgery related specialty services), with a market share of approximately 1.4% amongst all the top 10

INDUSTRY OVERVIEW

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private multi-specialties medical centre operators in Hong Kong by revenue in 2020. According to Frost& Sullivan, our Group has an estimated market share of approximately 0.7% and 0.5% in the alliedhealth services and medical management services market, respectively, in 2020.

Top 10 private multi-specialties medical centre operators in Hong Kongby revenue per internist and total revenue generated by internists, 2020

10.4

9.2

9.0

8.4

7.4

7.3

6.6

5.9

5.2

4.6

496.8

433.2

258.9

218.0

193.2

159.0

152.5

116.6

88.3

13.8

Our Group

Company B

Revenue per internist (million HK$) Total revenue generated by internists (million HK$)

Company H

Company C

Company I

Company G

Company A

Company D

Company E

Company F

Company A

Company B

Company C

Our Group

Company E

Company D

Company G

Company H

Company I

Company F

Notes:

(1) Surgeons refer to specialists with fellowships of the Hong Kong Academy of Medicine in one of the following specialties:cardiothoracic surgery, general surgery, neurosurgery, paediatric surgery, urology, and plastic surgery. Internists refer tospecialists with fellowship from the Hong Kong Academy of Medicine in other non-surgical streams.

(2) The revenue of the respective market participants is compiled with reference to the factors such as number of medicalspecialists including internists and surgeons, year of practice of specialists, and service fee charged.

(3) Revenue of the Group is based on revenue of HK$218.0 million generated by 21 specialist doctors (internists) for the yearended 31 March 2021.

(4) The comparison and ranking is based on the top 10 private multi-specialties medical centre operators in Hong Kong byrevenue of specialist medical services in Hong Kong in 2020.


Key Factors Relevant to Competition

Talent retention and recruitment

The operation of private medical centres in Hong Kong highly relies on an experienced andqualified healthcare team sharing similar goals, values and objectives. Medical practitioners joining amedical platform typically seek resources, including but not limited to, patient referrals, peer support,cost sharing and administration support as well as centralised management of an established medicalcentre. The retention and recruitment of medical practitioners with substantial professional training,qualification, medical knowledge and clinical experience in the provision of medical consultation andtreatment are crucial for sustainability of private medical centres. Furthermore, renowned medicalpractitioners will contribute to the strong brand name and high-quality services that allows the privatemedical centre to stand out from competitors.

Location and network of medical centres

Private medical centres are generally established in prime locations or near residential orcommercial areas in order to provide convenience to patients. Large scale private medical platformsusually demonstrate extensive geographical coverage for wide client base or focuses in one or twocentral locations to better serve target clients. Convenient location of private medical centre serves ascompetitive advantage to gain patient visits.

Partnership of medical centres with other industry players

Successful private medical centres are often in partnership with reputable physicians and operate inan affiliated medical network in order to possess strong presence in the market and gain awareness. Inorder to expand service offering and improve service quality, some leading market participants bringmedical practitioners to partner with insurance and pharmaceutical companies, educational institutionsand etc. to develop innovative and customised healthcare services to patients.

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Entry Barriers

Reputation and brand

Reputation is one of the entry barriers of private medical centre market in Hong Kong due to thehighly competitive and fragmented market. Individual private medical centres usually rely more onword-of-mouth referrals from recurrent patients, while sizable private medical centres attract and retainpatients with their own strong reputations and brands. As reputation and brand are usually built up withrenowned medical practitioners with extensive specialties and a medical platform, new market entrantsmay be hindered from entering the market.

Economies of scale

The operation of a private specialist medical centre typically demonstrate economies of scale andthe business performance of medical centre is dependent on the number and profit generating ability ofspecialists. In addition, experienced and reputable specialists generally command a higher service feeand the pool of talent is limited. As such, it is relatively common for medical specialists in Hong Kongto join a well-established private specialist medical centre instead of setting up a new one.

Capital requirement

Due to the significant expenditure on procurement of drugs and consumables, expenses of rentaland equipment and salary of healthcare professionals, including medical practitioners, nurses and othersupporting staff, abundant initial capital investment is required to enter the private medical centremarket in Hong Kong. In particular, large scale private medical platforms usually own advancedequipment and devices, and provide appealing and competitive remuneration packages to attract andretain talented medical practitioners. In addition, small medical practices may find it difficult to copewith increased administrative costs under the PHFO and to recruit experienced and qualified personnelin order to remain competitive in the future. Capital return efficiency also poses a barrier for newentrants without sufficient financial resources.

COMPETITIVE STRENGTHS OF OUR GROUP

The Group is an integrated private medical services provider in Hong Kong with specialist doctorsrenowned in their respective field of expertise, complemented by various allied health services andmedical management services. Please refer to the section headed ‘‘Business — Our CompetitiveStrengths’’ for further details.

DIRECTORS’ CONFIRMATION

Our Directors, after due and reasonable consideration, are of the view that there has been noadverse change in the market information since the date of the Frost & Sullivan Report which mayqualify, contradict or have an impact on the information therein.

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The following is a brief summary of the laws and regulations in Hong Kong that currentlymaterially affect our business. The principal objective of this summary is to provide potentialinvestors with an overview of the key laws and regulations applicable to us. This summary doesnot purport to be a comprehensive description of all laws and regulations applicable to ourbusiness and operations which may be important to potential investors. Investors should notethat the following summary is based on the laws and regulations in force as at the date of thisdocument, which may be subject to change.

OVERVIEW OF HONG KONG LAWS AND REGULATIONS

In relation to our operations in Hong Kong, we are subject to the following key Hong Kong laws

and regulations.

PHFO

The main purpose of the PHFO is to regulate premises in which registered medical practitioners

and registered dentists practise.

Prior to the enactment of the PHFO, the scope of legislation regulating private healthcare facilities

in Hong Kong was relatively narrow. While private hospitals, nursing homes and maternity homes were

governed by the Hospital, Nursing Homes and Maternity Homes Registration Ordinance (Chapter 165 of

the Laws of Hong Kong) (the ‘‘Hospital, Nursing Homes and Maternity Homes RegistrationOrdinance’’), non-profit-sharing medical clinics were governed by the Medical Clinics Ordinance

(Chapter 343 of the Laws of Hong Kong) (the ‘‘Medical Clinics Ordinance’’). Nevertheless, many

private healthcare facilities (including the facilities of our Company) such as private clinics operated by

medical groups or individual medical practitioners and ambulatory medical centres were not subject to

the Hospital, Nursing Homes and Maternity Homes Registration Ordinance and Medical Clinics

Ordinance i.e. these private healthcare facilities were not regulated directly by legislation in Hong Kong

prior to the implementation of the PHFO.

Facilities subject to the PHFO

Upon the PHFO being gazetted on 30 November 2018, it creates a new regulatory framework

regarding private healthcare facilities in Hong Kong. In particular, four types of private healthcare

facilities, including hospitals, day procedure centres, clinics and health services establishments, fall

within the scope of the PHFO and are required to obtain different licence respectively. Under Section 10

of the PHFO, a person must not operate a private healthcare facility without a licence, contravening

which, upon conviction, is liable to (i) a fine of $5,000,000 and to imprisonment for five years if the

facility is a hospital, or (ii) to a fine of $100,000 and to imprisonment for three years if the facility is

not a hospital.

Hospital

According to Section 4 of the PHFO, hospital refers to any premises used or intended to be used to

provide medical procedures to patients with lodging, carrying out medical procedures on patients with

lodging or receiving pregnant women for and immediately after childbirth.

REGULATORY OVERVIEW

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Day procedure centre

In accordance with Section 5 of the PHFO, day procedure centre refers to any premises that do notform part of the premises of a hospital, used or intended to be used for carrying out scheduled medicalprocedures on patients without lodging, whether or not the premises are also used or intended to be usedfor providing medical services to patients without lodging or carrying out minor medical procedures onpatients without lodging. Scheduled medical procedures are listed in Column 2 of Schedule 3 to thePHFO.

Clinic

As stated in Section 6 of the PHFO, clinic refers to any premises that do not form part of thepremises of a hospital, a day procedure centre or an outreach facility and used or intended to be used forproviding medical services to patients or carrying out minor medical procedures on patients, withoutlodging. Minor medical procedures are specified in Column 3 of Schedule 3 to the PHFO, which areexceptions to medical procedures described in Column 2 of the same Schedule. A small practice clinicmay request the Director of Health for a letter of exemption to operate the small practice clinic withouta licence, provided that it meets the requirements of Part 4 of the PHFO. Our Company’s premises interms of operational scale do not fulfil one of the main conditions to be small practice clinics as eachsmall practice clinic may only allow no more than five medical practitioners under full registration orregistered dentists practising therein when Part 4 of the PHFO comes into operation.

Health service establishment

Pursuant to Section 7 of the PHFO, health service establishment refers to any premises that fallwithin a category specified in Schedule 9 to the PHFO, do not form part of the premises of a hospital, aday procedure centre or a clinic and used, or intended to be used in relation to assessing, maintaining orimproving the health of patients or diagnosing or treating illnesses or disabilities, or suspected illnessesor disabilities, of patients. According to the Schedule 9 to the PHFO, currently this category of facilitiesonly includes premises of an education or scientific (or both) research institution in which medicalservices with lodging are provided to patients for the purpose of conducting clinical trials.

The licensing status of our operations

In respect of our Group’s operations, HKMC II and Imaging and Cardiovascular Centre are usedfor carrying out scheduled medical procedures (as listed in Column 2 of Schedule 3 to the PHFO) onpatients, without lodging. Moreover, HKMC II and Imaging and Cardiovascular Centre are not used tocarry out hospital-only medical procedures (as listed in the Code of Practice for Day Procedure Centres).Accordingly, each of HKMC II and Imaging and Cardiovascular Centre is classified as a day procedurecentre under the PHFO and is required to apply for a day procedure centre licence pursuant to thePHFO. We applied to the Department of Health for provisional and full day procedure centre licencesfor HKMC II and Imaging and Cardiovascular Centre on 3 March 2020 and 14 April 2020, respectively,pursuant to Section 135 of the PHFO. Imaging and Cardiovascular Centre obtained its provisionallicence issued by the Director of Health on 14 December 2020, which took effect from 1 January 2021.HKMC II has obtained its full day procedure centre licence, which took effect from 3 December 2021.

The Integrated Flagship Medical Centre (i.e. HKMC I, HKMC III, HKMC Geriatric MedicineCentre and HKMC Paediatric Centre before their relocation) and HKMC Psychiatric Centre are used forproviding medical services (as defined in the PHFO) and/or carrying out minor medical procedures (asdefined in the PHFO) on patients, without lodging. No scheduled medical procedures and hospital-onlymedical procedures are carried out in these centres. Accordingly, these centres are classified as clinics

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under the PHFO. However, as Section 136 and certain sub-sections under Section 13 of the PHFO inrespect of clinics, which relate to the application for clinic licences, have not come into operation, ourGroup is not required to take any action regarding the application for clinic licences (whetherprovisional or full clinic licences) in respect of these centres until these relevant sections come intoeffect. The timing when these relevant sections will come into operation has yet to be determined. Toour understanding from the information publicly available from the website of Office for Regulation ofPrivate Healthcare Facilities of the Department of Health, application for licences for clinics areanticipated to commence in 2021 at the earliest while the actual commencement date for application hasnot yet been announced. Our Group will make any requisite application for the clinic licences pursuantto the PHFO in due course. As advised by our legal adviser in relation to our business operations as toHong Kong law, he is not aware of any legal impediments for our Group to obtain the provisional andfull clinic licences when Section 136 and sub-sections under Section 13 of the PHFO in respect ofclinics come into operation. Hence, our Group has been in compliance with the licensing requirementsunder the PHFO.

Requirements under the PHFO

The new statutory control under the PHFO provides private healthcare facilities with mainly four

licensing requirements:

(i) appointment of chief medical executive;

(ii) complying with the requirements of the PHFO, conditions of licence and code of practice to

be issued by the Director of Health;

(iii) putting in place a complaints management system; and

(iv) adopting price transparency measures.

Chief medical executive

While a licensee of a private healthcare facility is wholly responsible for the operation of the

facility, to ensure compliance with the license conditions and code of practice, and to set up and enforce

relevant rules, policies and procedures, under Section 49 of the PHFO, a chief medical executive must

also be appointed by the licensee, in order to take charge of the day to day administration of the facility

and the adoption and implementation of rules, policies and procedures concerning the healthcare services

provided in the facility.

As shown in Section 51 of the PHFO, a chief medical executive must possess the qualifications

and experience necessary for administering a facility of that type, be physically and mentally fit to

administer a facility of that type, and be a person of integrity and good character.

Code of practice

Although there will be different sets of code of practice for different private healthcare facilities,

codes of practice, as provided in Section 102 of the PHFO, generally include standards and

specifications in relation to the equipment, fittings and furnishing in private healthcare facilities, the

management and staffing arrangement of private healthcare facilities, and the quality of care for, and the

safety of, patients in private healthcare facilities. They may be revised or revoked by the Director of

Health from time to time.

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On 9 August 2019, the Director of Health issued the Code of Practice for Day Procedure Centres,

which has come into effect since 2 January 2020, stating a set of core standards applicable to all day

procedure centres and procedure-specific standards for day procedure centres carrying out relevant

procedures. In relation to the code of practice for clinics, the Director of Health issued a draft Standards

for Medical Clinics in January 2018 for reference, and it will form the code of practice for clinics when

the relevant sections of the PHFO come into force.

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Complaints management system

The licensee of a private healthcare facility must put in place a complaints handling procedure for

receiving, managing and responding to complaints that are received against the facility, as specified in

Section 64 of the PHFO. Upon receiving a complaint against the facility, the licensee must ensure that:

(i) an investigation of the complaint is conducted and findings made;

(ii) if the case requires, an improvement measure, whether general or specific to the complaint, is

implemented; and

(iii) the complainant is informed of the findings of the investigation and any improvement

measure and, if the case requires, of any follow-up action taken or to be taken.

Unresolved complaints may be handled according to a centralised mechanism, namely the

Committee on Complaints against Private Healthcare Facilities, which has statutory power under Part 6

of the PHFO to investigate into complaints by obtaining information and documents relevant to the

complaint, and by conducting interviews with any person who is able to provide information or other

assistance in relation to the complaint.

Price transparency

According to Section 61 of the PHFO, the licensee of a private healthcare facility must make

available to the public information about the prices of chargeable items and services provided in the

facility. By Sections 62 and 63 of the PHFO, in addition to price information, the licensee of a hospital

must put in place a budget estimate system to provide estimates of the fees and charges of the hospital

for the treatments and procedures, and publish historical statistics on the fees and charges for the

specified treatments and procedures.

Consequences of contravening the PHFO

The Director of Health authorised by Section 28 of the PHFO has the power to order suspension

for an appropriate period or cancellation of a licence granted to a private healthcare facility for various

reasons under Section 38 of the PHFO as he thinks fit. For example, the Director of Health may do so if

he considers the licensee or the chief medical executive breaches the licensing requirements of the

PHFO as discussed, or the practice carried on in the facility is a practice other than that specified in the

licence.

Medical Registration Ordinance (Chapter 161 of the Laws of Hong Kong)

General Register

According to the Medical Registration Ordinance (Chapter 161 of the Laws of Hong Kong) (the

‘‘Medical Registration Ordinance’’), all practising medical practitioners shall be registered with the

Medical Council as registered medical practitioners, and shall practise medicine, surgery or midwifery in

Hong Kong, or any branch of medicine or surgery in Hong Kong, only if he holds a practising

certificate currently in force, as stipulated in Section 20A of the Medical Registration Ordinance.

Under Sections 7A, 8 and 14 of the Medical Registration Ordinance, in order to register with the

Medical Council, a medical practitioner must:

(i) complete not less than five years full time approved medical training (including internship)

and obtain a medical qualification;

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(ii) pass in a licensing examination;

(iii) not have been convicted of any offence punishable with imprisonment;

(iv) not been guilty of misconduct in a professional respect; and

(v) be of good character.

Registered medical practitioners are included in a General Register as provided in the Medical

Registration Ordinance to be kept by the Registrar i.e. the Director of Health. According to Section 20A

of the Medical Registration Ordinance, a practising certificate effective for 12 months will be issued to a

registered medical practitioner upon application, and he has to renew his practising certificate every year

in order to continue his medical practice.

Specialist Register

Specialist Register, another register provided in the Medical Registration Ordinance, contains

particulars of persons approved by the Medical Council to have their names included, such as addresses,

qualifications and experience. According to Section 20K of the Medical Registration Ordinance, to have

one’s name included in the Specialist Register, a registered medical practitioner has to satisfy the

Registrar that:

(a) (i) he has been awarded a Fellowship of the Academy of Medicine, and (ii) certified by the

Academy of Medicine that he has completed the postgraduate medical training and has

satisfied the continuing medical education requirements for the relevant specialty; or

(b) (i) has been certified by the Academy of Medicine that he has achieved a professional

standard comparable to that recognised by the Academy for the award of its fellowship, and

(ii) has completed the postgraduate medical training and satisfied the continuing medical

education requirements comparable to those recommended by the Academy, for the relevant

specialty.

It is one of the functions of the Education and Accreditation Committee of the Medical Council

under Section 20I of the Medical Registration Ordinance to determine the specialties under which names

of registered medical practitioners may be included in the Specialist Register, upon the recommendation

of the Academy of Medicine. Provided in Section 20J of the Medical Registration Ordinance, the

Education and Accreditation Committee may also, upon the recommendation of the Academy of

Medicine, recommend to the Medical Council the qualification, experience and any other attributes that

qualify a registered medical practitioner to have his name included in the Specialist Register under a

particular specialty.

A registered medical practitioner included in the Specialist Register may only hold himself out as a

specialist and use a specialist title as provided in the Specialist Register. He is also required to undergo

continuing medical education relevant to his specialty as determined by the Academy of Medicine.

Code of Professional Conduct

The Medical Council issued a Code of Professional Conduct for the Guidance of Registered

Medical Practitioners for all registered medical practitioners in Hong Kong. While the Code of

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Professional Conduct may be revised from time to time by the Medical Council, it includes different

aspects of guidance requiring full compliance by all registered medical practitioners, for instance:

(i) Professional responsibilities towards patients, such as:

a. Confidentiality obligations;

b. Obligations to act in the interest of patients; and

c. To consult with or refer to another doctor having the necessary ability when an

examination or treatment is beyond his capacity;

(ii) Communication in professional practice, such as restriction on practice promotion from being

carried out by registered medical practitioners;

(iii) Requirements regarding prescription and labelling of dispensed drugs and medicines;

(iv) Financial arrangements;

(v) Relationship with other practitioners and organisations;

(vi) Rules regarding new medical procedures, clinical research and alternative medicine;

(vii) Prohibitions against abuse of professional position; and

(viii) Regulations in relation to serious infectious disease.

Supplementary Medical Professions Ordinance (Chapter 359 of the Laws of Hong Kong)

The Supplementary Medical Professions Ordinance (Chapter 359 of the Laws of Hong Kong (the

‘‘Supplementary Medical Professions Ordinance’’) provides for registration, discipline and the better

control of persons engaged in occupations and professions supplementary to medicine. These

occupations and professions include medical laboratory technologists and radiographers.

Pursuant to Part III of the of the Supplementary Medical Professions Ordinance, persons in the

relevant profession are required to be registered with the board of the relevant profession established

under Section 5.

Pursuant to Section 16(1) of the Supplementary Medical Professions Ordinance, no person shall

practice in the relevant profession in Hong Kong unless he is the holder of a practising certificate which

is then in force issued by the board of the relevant profession.

Under Section 20(2) of the Supplementary Medical Professions Ordinance, a company registered

under the Companies Ordinance (Chapter 622 or 32 of the Laws of Hong Kong) may carry on the

business of practising the profession if at least one director thereof is a ‘professionally qualified

director’ (a director who is registered in respect of that profession and satisfies any requirements

imposed by any regulations made under the Supplementary Medical Professions Ordinance as to

qualifications, experience or training necessary for a person registered in respect of that profession to

practise without supervision) and all persons practising the profession who are employed by the

company are registered in respect of that profession.

Under Section 26 of the Supplementary Medical Professions Ordinance, a board of the relevant

profession may prepare and revise Codes of Practice for the relevant profession prescribing standards of

conduct and practice for persons practising that profession, regulating the activities of persons practising

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that profession, regulating the activities of persons who are required to be supervised by regulations

made under Supplementary Medical Professions Ordinance and prohibiting specified activities. A

person, who contravenes any Code of Practice applicable to his profession, may be subject to inquiries

by the board.

Undesirable Medical Advertisements Ordinance (Chapter 231 of the Laws of Hong Kong)

The Undesirable Medical Advertisements Ordinance (Chapter 231 of the Laws of Hong Kong) (the

‘‘Undesirable Medical Advertisements Ordinance’’) prohibits and restricts advertisements which have

a possibility of inducing the seeking of improper management of various health conditions, so that

public health will not be harmed.

Advertisement is defined in Section 2 of the Undesirable Medical Advertisements Ordinance as

any notice, poster, circular, label, wrapper or document, and any announcement made orally or by any

means of producing or transmitting light or sound. The scope is wide enough to encompass

advertisements published by numerous means, from newspapers, magazines, leaflets, broadcast,

television and internet, to labels on a package or container promoting any medicine, surgical appliance,

treatment or orally consumed product.

Pursuant to Section 3 of the Undesirable Medical Advertisements Ordinance, no person shall

publish, or cause to be published any advertisements likely to lead to the use of any medicine, surgical

appliance or treatment for:

(a) the purpose of treating human beings for, or preventing them from contracting any of the

diseases or conditions specified in Schedule 1 to the Undesirable Medical Advertisements

Ordinance, unless for certain purpose specified; or

(b) treating human beings for any purpose specified in Schedule 2 to the Undesirable Medical

Advertisements Ordinance.

Where in an advertisement published in contravention of the prohibition set out in the Undesirable

Medical Advertisements Ordinance, a person named in that advertisement is held out (a) as being a

manufacturer or supplier of medicine or surgical appliances; or (b) as being able to provide any

treatment, that person is presumed, until the contrary is proved, to have caused the advertisement to be

published. Upon conviction, this person shall be liable up to a fine of HK$100,000 and imprisonment

for one year.

Dangerous Drugs Ordinance (Chapter 134 of the Laws of Hong Kong)

The Dangerous Drugs Ordinance (Chapter 134 of the Laws of Hong Kong) (the ‘‘DangerousDrugs Ordinance’’) governs mainly the trafficking (i.e. import, export, procuring, supply, dealing in or

with, or possession for the purpose of trafficking) of drugs or substances classified as dangerous drugs

by the Dangerous Drugs Ordinance.

Under Section 5 of the Dangerous Drugs Ordinance, no person shall supply or procure, or offer to

supply or procure, a dangerous drug to or for any person in Hong Kong, unless:

(i) the latter person is authorised by or licensed under the Dangerous Drugs Ordinance to be in

possession of that dangerous drug;

(ii) the dangerous drug is to be supplied or procured in accordance with the Dangerous Drugs

Ordinance; and

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(iii) in the case of a person licensed under this Ordinance to be in possession of the dangerous

drug, the dangerous drug is to be supplied or procured in accordance with the conditions of

his licence.

In particular, the administration of a dangerous drugs by or under the direct personal supervision

of, and in the presence of, a registered medical practitioner is deemed not to be supplying the dangerous

drug. Any person contravening the regulation under Section 5 of the Dangerous Drugs Ordinance shall

be liable on conviction on indictment up to a fine of $100,000 and to imprisonment for 15 years.

Under Section 22 of the Dangerous Drugs Ordinance, a registered medical practitioner is

authorised so far as may be necessary for the practice or exercise of his profession, function or

employment, and in his capacity as such, to be in possession of and to supply a dangerous drug.

Furthermore, under Section 27 of the Dangerous Drugs Ordinance, a registered medical practitioner is

authorised to possess equipment and apparatus fit and intended for injection of a dangerous drug, so far

as may be necessary for the purposes of the practice or exercise of his profession, function or

employment.

Pharmacy and Poisons Ordinance (Chapter 138 of the Laws of Hong Kong)

The Pharmacy and Poisons Ordinance (Chapter 138 of the Laws of Hong Kong) (the ‘‘Pharmacyand Poisons Ordinance’’) governs pharmacy, pharmaceutical products and poison. The Pharmacy and

Poisons Ordinance request all pharmacists in Hong Kong, in order to practise in Hong Kong, to be

registered with the Pharmacy and Poisons Board and obtain a valid practising certificate.

Pharmaceutical products and medicine are defined in the Pharmacy and Poisons Ordinance as any

substance or mixture of substances which:

(a) presented as having properties for treating or preventing disease in human beings or animals;

or

(b) that may be used in, or administered to, human beings or animals, either with a view to (i)

restoring, correcting or modifying physiological functions by exerting a pharmacological,

immunological or metabolic action; or (ii) making a medical diagnosis.

As stipulated in the Pharmacy and Poisons Regulations (Chapter 138A of the Laws of Hong Kong)

(the ‘‘Pharmacy and Poisons Regulations’’), pharmaceutical products must be registered before they

can be sold, offered for sale, distributed or possessed for the purposes of sales, distribution or other use

in Hong Kong.

Poisons refer to a substance specified in the Poisons List set out in Schedule 10 to the Pharmacy

and Poisons Regulations. Poisons are divided into 2 categories, namely ‘‘Part 1’’ and ‘‘Part 2’’,

according to their potency, toxicity and potential side effects, in which the levels of control differ from

each another. However, registered medical practitioners are exempted from restrictions of the regulations

in the Pharmacy and Poisons Ordinance in terms of supplying medicine and poison for the purposes of

medical treatment.

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The sale of pharmaceutical products and poisons requires various licence, certificate or permit as

provided in the Pharmacy and Poisons Ordinance, the Dangerous Drugs Ordinance and the Antibiotics

Ordinance (Chapter 137 of the Laws of Hong Kong), as summarised in the table below:

Licence, certificate or permit requirement Relevant trade of pharmaceutical products and poisons

Wholesale Dealer Licence: for person dealing in wholesale and/or import/

export of poisons and/or pharmaceutical products

Certificate for Registration of Premises of

an Authorised Seller of Poisons:

for premises of an authorised seller of poisons

where poisons are kept for retail purposes

Licence for Listed Sellers of Poisons: for person dealing in retail sale of Part 2 poisons

Antibiotics Permit: for person dealing in and/or to possess antibiotics

Wholesale Dealer’s Licence to Supply

Dangerous Drug:

for person dealing in wholesale of dangerous drugs

Any person who is guilty of an offence under the Pharmacy and Poisons Ordinance, unless a

penalty is otherwise expressly provided, be liable on conviction to a fine of HK$100,000 and to

imprisonment for two years.

Radiation Ordinance (Chapter 303 of the Laws of Hong Kong)

Pursuant to Section 7 of the Radiation Ordinance (Chapter 303 of the Laws of Hong Kong), no

person shall, without a licence issued by the Radiation Board, manufacture or otherwise produce, sell or

otherwise deal in or with or have in his possession or use any irradiating apparatus.

Any person who contravenes Section 7 shall be guilty of an offence and shall be liable to a fine of

$50,000 and to imprisonment for two years.

Waste Disposal Ordinance (Chapter 354 of the Laws of Hong Kong)

The Waste Disposal Ordinance (Chapter 354 of the Laws of Hong Kong) (the ‘‘Waste DisposalOrdinance’’) and the Waste Disposal (Clinical Waste) (General) Regulation (Chapter 354O of the Laws

of Hong Kong) (the ‘‘Waste Disposal Regulation’’) regulate and control the production, storage,

collection and disposal of clinical waste.

According to Section 2 of the Waste Disposal Ordinance, clinical waste includes waste consisting

of any substance, matter or thing:

(i) belonging to any of the groups specified in Schedule 8 to the Waste Disposal Ordinance,

including:

a. Used or contaminated sharps;

b. Laboratory waste;

c. Human and animal tissues;

d. Infectious materials;

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e. Dressings; or

f. Other wastes as specified by the Director of Environmental Protection; and

(ii) generated in connection with a dental or medical practice, research or laboratory practice

(excluding chemical waste and radioactive waste).

It is required by Regulation 3 of the Waste Disposal Regulation that a person who produces or

causes to be produced any clinical waste, or who has possession or custody of any clinical waste, must

dispose of it in a proper manner or cause or arrange for it to be disposed of in a proper manner, such as:

(i) by consigning the clinical waste to a licensed waste collector for delivery from the land or

premises to a reception point i.e. any land or premises that are authorised under a waste

disposal licence or an authorisation to be used for the disposal of clinical waste; or

(ii) by delivering by a healthcare professional the clinical waste from the land or premises to a

reception point or collection point i.e. any land or premises authorised to be used by a

licensed or authorised waste collector for the receipt of clinical waste, under a waste

collection licence or an authorisation; or any land or premises authorised to be used as an on-

site collection point.

Under Regulation 7 of the Waste Disposal Regulation, any person who stores, collects, removes,

delivers, transports, receives, transfers, disposes of, imports, exports or otherwise handles clinical waste

must take all such precautions as are necessary to prevent danger to public health or safety, pollution to

the environment and nuisance to the neighbouring area. If that person is convicted of contravening this

Regulation 7, he is liable to a fine of $200,000 and to imprisonment for six months.

Regulation 12 of the Waste Disposal Regulation requires a person to keep records in respect of

clinical waste produced or caused to be produced by the person, or in the person’s possession or

custody, and to produce the records to the Director of Environment Protection for inspection when

required. A person contravening this Regulation 12 is liable on conviction to a fine of HK$100,000.

The Secretary of Environment published, under Section 35 of the Waste Disposal Ordinance, 2 sets

of Code of Practice for the Management of Clinical Waste, one for major clinical waste producers (such

as hospitals, public clinics and government laboratories) and waste collectors, and one for small clinical

waste producers (such as private clinics, private laboratories, universities with medical teaching or

research, and nursing homes), with a view to providing guidance to clinical waste producers to assist

them to comply with the legal requirements of the Waste Disposal Ordinance and the Waste Disposal

Regulation.

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OUR HISTORY

The history of our Group can be traced back to October 2013 when Dr. Kenneth Tsang, ourexecutive Director, chairman of the Board, chief executive officer and Controlling Shareholder, foundedHong Kong Medical Consultants, our principal operating subsidiary. We commenced our businessoperations in January 2014 through the establishment of our medical management service business andDr. Kenneth Tsang, our founder, took a managerial role. We provided medical management service forDr. Kenneth Tsang from January 2014, Dr. Matthew Ng from January 2014 and Dr. Lo Wai Kei fromJune 2017, respectively, before each of them joined our Group as a specialist doctor. Accumulating hisabundant experience in his medical practice as well as in the medical service industry, Dr. KennethTsang directed and managed the business of our Group. Aiming to develop our business as an integratedmedical service provider, we decided to further strengthen our clinic brand and introduce specialists andmanagement personnel to our Group. Dr. Kenneth Tsang played the role of liaising with potentialpartners. In 2017, Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing, Dr.Jenny Tsang, Dr. Matthew Ng, Dr. Boron Cheng, Dr. Lo Wai Kei, Dr. Clement Lee, Dr. Ada Ma, Dr.Gordon Chau, Dr. Barbara Tam, Dr. Kenneth Ng, Mr. Shiu and Mrs. Chen (each a ‘‘PrimaryShareholder’’, and collectively ‘‘Primary Shareholders’’) had a series of discussions. As part of thediscussions, the Primary Shareholders agreed to develop our business to include not only medicalmanagement services, but to primarily focus on the provision of medical services. In November 2017,the Primary Shareholders, under the leadership of Dr. Kenneth Tsang, agreed to develop our one-stopmedical platform business together by becoming shareholders and contributing to our Group as medicalpractitioners and/or management personnel. Given that it took time for us to arrange the setting up ofthe clinics, the Primary Shareholders also agreed that the doctors would commence their medicalpractice at our Group upon the availability of the respective consultation areas and medical equipment.The Primary Shareholders further agreed on the respective beneficial interests as well as the respectiveroles and responsibilities in our Group in November 2017, which have been documented one afteranother since then. With the joining of Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. ChuLeung Wing and Dr. Jenny Tsang as doctors in November 2017, we offered our medical and clinicalservices in various fields of expertise including respiratory medicine, cardiology, neurology, geriatricmedicine and psychiatry. Following this, Dr. Matthew Ng, Dr. Boron Cheng, Dr. Lo Wai Kei, Dr.Clement Lee and Dr. Ada Ma commenced their medical practice at the Group as Equity Partner Doctorsin 2018. It was originally envisioned that Dr. Gordon Chau, Dr. Barbara Tam and Dr. Kenneth Ng, allbeing ophthalmologists and our shareholders, would join us as specialist doctors with terms similar tothose offered to the aforesaid five specialist doctors. However, during the discussions, we foresaw that ifwe were to include the HKMC Ophthalmologists in our Group as a service provider, regular capitalexpenditures and depreciation would arise from their deployment of expensive medical equipment. Inorder for this to make commercial sense for our Group, we had requested that the HKMCOphthalmologists increase their patient volume to maximise the usage of such equipment, however, theHKMC Ophthalmologists wanted to maintain their autonomy and patient volume flexibility of theirmedical practices and reduce their effort spent on administrative matters. After further discussions andnegotiation, we agreed that it would be in the best interest of both parties that we provide the HKMCOphthalmologists with a licence to use our brand and medical management services in exchange for anannual fixed fee. Such arrangement is in line with our Group’s development strategy in that we canfurther broaden the specialty medical services offered. With the joining of the five specialist doctors andthe HKMC Ophthalmologists, our Group has expanded its fields of medical specialty to includegastroenterology & hepatology, nephrology, oncology as well as ophthalmology. In addition, Mr. Shiuand Mrs. Chen joined our Group as management personnel in 2017. For details of the roles andresponsibilities of our specialist doctors, please refer to the section headed ‘‘Business — OurProfessional Team’’. For details of the roles and responsibilities of Mr. Shiu and Mrs. Chen, please referto the section headed ‘‘Directors and Senior Management’’.

Over the years of our operation, our Group has steadily grown. We recruit specialist doctors andpanel specialists when we come across suitable candidates. To date, our Group is operating under amedical team of specialist doctors working for us on an exclusive basis and panel doctors working forus on a non-exclusive basis, and our medical team covers 14 medical specialties. To bring greaterconvenience to our clients, we decided to complement our specialist medical services with allied healthservices. We have been providing allied health services, which include physiotherapy, speech therapy,clinical psychology as well as imaging, diagnostic and laboratory services since 2017. As at the LatestPracticable Date, our Group operated three medical centres, comprising the Integrated Flagship MedicalCentre, HKMC II and HKMC Psychiatric Centre.

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We continue to take steps to further our development plan. In October 2019, through theacquisition of Hong Kong Imaging, we enhanced our imaging, diagnostic and laboratory services. OurGroup acquired Hong Kong Imaging at a consideration of HK$31,875,481, which was determined withreference to its net current asset value and price-earning ratio, and as a result of an arm’s lengthnegotiation. Please see the section headed ‘‘— Acquisition of Hong Kong Imaging’’ below for furtherinformation. Operating our medical services under two main service streams as well as offering imagingand diagnostic services, one-stop medical check-up services and drug dispensing services, we strive tooffer our clients healthcare services as an integrated healthcare service provider.

BUSINESS MILESTONES

We set out below our key business milestones since the inception of our Group’s business:Year Event

2013 Hong Kong Medical Consultants, our principal operating subsidiary, was incorporated2014 We commenced our medical management service business2017 We set up HKMC II

We set up HKMC Psychiatric CentreWe set up HKMC Geriatric Medicine Centre

2018 We set up HKMC I2019 We set up HKMC Paediatric Centre

Our Group acquired Hong Kong Imaging for the provision of imaging, diagnostic andlaboratory services

2020 We set up HKMC III2021 We established the Integrated Flagship Medical Centre through the integration of

HKMC I, HKMC III, HKMC Geriatric Medicine Centre and HKMC Paediatric Centre

HISTORICAL SHAREHOLDING CHANGES OF OUR CORPORATE SHAREHOLDERS PRIORTO THE REORGANISATION

We set out below details of the incorporation and significant changes in the shareholding interestsof our corporate shareholders, CHG and CMI, prior to the Reorganisation.

CHG

CHG was incorporated in the BVI on 29 November 2016. As at the date of incorporation, CHGallotted and issued 100 shares at par, of which 90 shares, representing 90% of the total issued shares ofCHG, were allotted and issued to Dr. Kenneth Tsang, as fully paid, and 10 shares, representing 10% ofthe total issued shares of CHG, were allotted and issued to Mr. Shiu, as fully paid, respectively.

On 1 September 2017, (i) the 90 shares of CHG then held by Dr. Kenneth Tsang were cancelled.300,000 shares of CHG, representing 30% of the total issued shares in CHG, were allotted and issued atpar to Dr. Kenneth Tsang, as fully paid; (ii) 300,000 shares of CHG, representing 30% of the totalissued shares in CHG, were allotted and issued at par to Dr. Jason Fong, as fully paid; (iii) 300,000shares of CHG, representing 30% of the total issued shares in CHG, were allotted and issued at par toDr. Adam Leung, as fully paid; (iv) the 10 shares of CHG then held by Mr. Shiu were cancelled. 50,000shares of CHG, representing 5% of the total issued shares in CHG, were allotted and issued at par to alimited company (the ‘‘Shiu Trustee’’), as fully paid, which held the shares of CHG on trust for thebenefit of Mr. Shiu; and (v) 50,000 shares of CHG, representing 5% of the total issued shares in CHG,were allotted and issued at par to Mrs. Chen, as fully paid. Upon completion of the aforesaid sharecancellation, allotments and issuances, CHG was held as to 30%, 30%, 30%, 5% and 5% by Dr.Kenneth Tsang, Dr. Jason Fong, Dr. Adam Leung, the Shiu Trustee and Mrs. Chen, respectively.

On 28 December 2018, (i) 2,685,261 shares of CHG were allotted and issued at par to Dr. KennethTsang, as fully paid. The total number of shares of CHG then held by Dr. Kenneth Tsang thus became2,985,261, representing 37.32% of the total issued shares in CHG; (ii) 1,535,355 shares of CHG wereallotted and issued at par to Dr. Adam Leung, as fully paid. The total number of shares of CHG held byDr. Adam Leung thus became 1,835,355, representing 22.94% of the total issued shares in CHG; (iii)559,176 shares of CHG were allotted and issued at par to Dr. Jason Fong, as fully paid. The totalnumber of shares of CHG held by Dr. Jason Fong thus became 859,176, representing 10.74% of thetotal issued shares in CHG; (iv) 800,000 shares of CHG, representing 10% of the total issued shares inCHG, were allotted and issued at par to Central Medical Management, as fully paid; (v) 523,182 shares


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of CHG, representing 6.54% of the total issued shares in CHG, were allotted and issued at par to Dr.Jenny Tsang, as fully paid; (vi) the 50,000 shares of CHG then held by the Shiu Trustee were cancelled.400,000 shares of CHG, representing 5% of the total issued shares in CHG, were allotted and issued atpar to Wealth Basin (which is wholly owned by Mr. Shiu), as fully paid; (vii) the 50,000 shares of CHGthen held by Mrs. Chen were cancelled. 400,000 shares of CHG, representing 5% of the total issuedshares in CHG, were allotted and issued at par to Les Trois (which is wholly owned by Mrs. Chen), asfully paid; and (viii) 197,057 shares of CHG, representing 2.46% of the total issued shares in CHG,were allotted and issued at par to Dr. Chu Leung Wing, as fully paid. Upon completion of the aforesaidshare cancellations, allotments and issuances, CHG was held as to 37.32% by Dr. Kenneth Tsang,22.94% by Dr. Adam Leung, 10.74% by Dr. Jason Fong, 10.00% by Central Medical Management,6.54% by Dr. Jenny Tsang, 5.00% by Wealth Basin, 5.00% by Les Trois and 2.46% by Dr. Chu LeungWing, respectively.

To consolidate the individual Controlling Shareholders’ interest in the Company, CHG underwentthe following share transfers. On 23 October 2020, (i) 408,000 shares of CHG then held by CentralMedical Management, representing 5.1% of the total issued shares in CHG, were transferred to Dr.Kenneth Tsang at a consideration of HK$408,000; (ii) 328,000 shares of CHG then held by CentralMedical Management, representing 4.1% of the total issued shares in CHG, were transferred to WealthBasin at a consideration of HK$328,000; and (iii) 64,000 shares of CHG then held by Central MedicalManagement, representing 0.8% of the total issued shares in CHG, were transferred to Dr. Adam Leungat a consideration of HK$64,000. Upon completion of the aforesaid share transfers, CHG was held as to42.42% by Dr. Kenneth Tsang, 23.74% by Dr. Adam Leung, 10.74% by Dr. Jason Fong, 9.10% byWealth Basin, 6.54% by Dr. Jenny Tsang, 5.00% by Les Trois and 2.46% by Dr. Chu Leung Wing,respectively. On 23 October 2020, (i) 3,393,261 shares of CHG then held by Dr. Kenneth Tsang,representing 42.42% of the total issued shares in CHG, were transferred to Peak Summit at aconsideration of HK$3,393,261; (ii) 1,899,355 shares of CHG then held by Dr. Adam Leung,representing 23.74% of the total issued shares in CHG, were transferred to Heroic Wealth at aconsideration of HK$1,899,355; (iii) 859,176 shares of CHG then held by Dr. Jason Fong, representing10.74% of the total issued shares in CHG, were transferred to Mastermind Intelligence at a considerationof HK$859,176; (iv) 523,182 shares of CHG then held by Dr. Jenny Tsang, representing 6.54% of thetotal issued shares in CHG, were transferred to Property Linkage at a consideration of HK$523,182; and(v) 197,057 shares of CHG then held by Dr. Chu Leung Wing, representing 2.46% of the total issuedshares in CHG, were transferred to Grateful Mind at a consideration of HK$197,057. Upon completionof the aforesaid share transfers, CHG was held as to 42.42% by Peak Summit, 23.74% by HeroicWealth, 10.74% by Mastermind Intelligence, 9.10% by Wealth Basin, 6.54% by Property Linkage,5.00% by Les Trois and 2.46% by Grateful Mind, respectively. The considerations for the aforesaidshare transfers in respect of CHG were determined with reference to the par value of HK$1 of eachshare of CHG.

CMI

CMI was incorporated in the BVI on 20 December 2018. As at the date of incorporation, 100shares of CMI, representing 100% of the total issued shares in CMI, were allotted and issued at aconsideration of HK$100 to Mr. Shiu, as fully paid.

On 28 December 2018, (i) the 100 shares of CMI then held by Mr. Shiu were cancelled; and (ii)20,750, 875, 875, 500, 500, 500, 500, 250 and 250 shares of CMI, representing 83.0%, 3.5%, 3.5%,2.0%, 2.0%, 2.0%, 2.0%, 1.0% and 1.0%, respectively, of the total issued shares in CMI were allottedand issued to CHG, Dr. Clement Lee, Dr. Boron Cheng, Dr. Ada Ma, Dr. Kenneth Ng, Dr. GordonChau, Dr. Barbara Tam, Dr. Matthew Ng and Dr. Lo Wai Kei, respectively, at a consideration ofHK$8,000,031, HK$350,000, HK$350,000, HK$200,000, HK$200,000, HK$200,000, HK$200,000,HK$100,000 and HK$100,000, respectively, as fully paid. Upon completion of the aforesaid sharecancellation, allotments and issuances, CMI was held as to 83.0% by CHG, 3.5% by Dr. Clement Lee,3.5% by Dr. Boron Cheng, 2.0% by Dr. Ada Ma, 2.0% by Dr. Kenneth Ng, 2.0% by Dr. Gordon Chau,2.0% by Dr. Barbara Tam, 1.0% by Dr. Matthew Ng and 1.0% by Dr. Lo Wai Kei, respectively,immediately prior to the Reorganisation. The equity interests in CMI allotted and issued to the HKMCOphthalmologists, namely, Dr. Gordon Chau, Dr. Barbara Tam and Dr. Kenneth Ng, were determinedwith reference to the importance of the ophthalmology services to the intended specialty serviceofferings of our Group, according to our business plan, the reputation and the then business scale of theHKMC Ophthalmologists and the possible economies of scale in operation. Upon completion of theReorganisation, CMI ceased to be a shareholder of our Group.


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OUR CORPORATE HISTORY

Our Group comprises our Company, CMH, Hong Kong Medical Consultants, Central HealthcareLimited, HK Brain Memory, Central Medical Consultants (currently known as HKMC Dental),CentralPharm, Medical Concierge Holding, Medical Concierge Management, Medical ConciergeLimited, Smart Winner, HKMC Medical Products, HKID Limited, HKID (Lab) and HKID (MRI). Weset out the particulars of the major companies of our Group below:

Our Company

Our Company was incorporated in the Cayman Islands as an exempted company with limitedliability on 21 September 2020. Upon completion of the Reorganisation, our Company became theultimate holding company of our Group. Our Company is an investment holding company of oursubsidiaries.

CMH

Being a predecessor holding company of our Group and currently the intermediate holdingcompany of our Group, CMH was incorporated in the BVI with limited liability on 2 November 2017,and is a direct wholly-owned subsidiary of our Company. As at the date of incorporation, nine shares ofCMH, representing 100% of the then total issued shares in CMH, were allotted and issued at par to Mr.Shiu, as fully paid. On 28 December 2018, the nine shares of CMH then held by Mr. Shiu werecancelled and 875,000 shares of CMH, representing 100% of the total issued shares in CMH, wereallotted and issued at par to CMI. Upon completion of the aforesaid share cancellation, allotment andissuance, CMH was wholly owned by CMI.

On 29 March 2019, 23 August 2019, 30 October 2019, 1 August 2020, 27 August 2020 and 15September 2020, respectively, our Group entered into Pre-[REDACTED] Investment Agreements(including a supplemental agreement to the subscription agreement for the Tranche 5 Pre-[REDACTED]Investment) with the Pre-[REDACTED] Investors in five tranches, pursuant to which a total of 198,307shares in CMH, representing approximately 18.48% in aggregate of the total issued shares in CMH,were allotted and issued to the Pre-[REDACTED] Investors. For further details, please refer to thesection headed ‘‘— Pre-[REDACTED] Investments’’ below. Immediately prior to the Reorganisation,CMH was held as to 81.52% by CMI and 18.48% by the Pre-[REDACTED] Investors, respectively.Upon completion of the Reorganisation, CMH became the intermediate holding company of our Group.

Hong Kong Medical Consultants

Hong Kong Medical Consultants, which is our Group’s principal operating subsidiary, isprincipally engaged in the provision of medical services. Hong Kong Medical Consultants wasincorporated in Hong Kong as a limited company on 25 October 2013. As at the date of incorporation,50 shares of Hong Kong Medical Consultants, representing 50% of the total issued share capital ofHong Kong Medical Consultants, were allotted and issued as fully paid to Dr. Kenneth Tsang at aconsideration of HK$50, and 50 shares of Hong Kong Medical Consultants, representing 50% of thetotal issued share capital of Hong Kong Medical Consultants, were allotted and issued as fully paid toMrs. Tsang at a consideration of HK$50, who held such shares of Hong Kong Medical Consultants ontrust for the benefit of Dr. Kenneth Tsang.

On 31 March 2018, the 50 shares of Hong Kong Medical Consultants then held by Dr. KennethTsang, representing 50% of the total issued share capital of Hong Kong Medical Consultants, weretransferred to Central Medical Consultants (currently known as HKMC Dental) at a consideration ofHK$50, which was determined with reference to the par value of HK$1 per share, and the 50 shares ofHong Kong Medical Consultants then held by Mrs. Tsang, who held such shares of Hong Kong MedicalConsultants on trust for the benefit of Dr. Kenneth Tsang, representing 50% of the total issued sharecapital of Hong Kong Medical Consultants, were transferred to Central Medical Consultants (currentlyknown as HKMC Dental) at a consideration of HK$50, which was determined with reference to the parvalue of HK$1 per share. Upon completion of the aforesaid share transfers, Hong Kong MedicalConsultants was wholly owned by Central Medical Consultants (currently known as HKMC Dental).

On 4 January 2019, 100 shares of Hong Kong Medical Consultants then held by Central MedicalConsultants (currently known as HKMC Dental), representing 100% of the issued share capital of HongKong Medical Consultants, were transferred to CMH at a consideration of HK$100, which was


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determined with reference to the par value of HK$1 per share. Upon completion of the aforesaid sharetransfer and up to the Latest Practicable Date, Hong Kong Medical Consultants was wholly owned byCMH.

Central Healthcare Limited

Central Healthcare Limited is principally engaged in provision of psychiatric service. CentralHealthcare Limited was incorporated in Hong Kong as a limited company on 17 August 2017. As at thedate of incorporation, one share of Central Healthcare Limited, representing 100% of the issued sharecapital of Central Healthcare Limited, was allotted and issued at a consideration of HK$1 to Dr. JennyTsang as fully paid.

On 31 March 2018, the one share of Central Healthcare Limited then held by Dr. Jenny Tsang,representing 100% of the issued share capital of Central Healthcare Limited, was transferred to HongKong Medical Consultants at a consideration of HK$1, which was determined with reference to the totalamount of share capital initially subscribed for by Dr. Jenny Tsang. Upon completion of the aforesaidshare transfer and up to the Latest Practicable Date, Central Healthcare Limited was wholly owned byHong Kong Medical Consultants. Immediately prior to the Reorganisation, Central Healthcare Limitedwas wholly owned by Hong Kong Medical Consultants.

HKID Limited

HKID Limited is principally engaged in provision of medical diagnostic services. HKID Limitedwas incorporated in Hong Kong as a limited company on 11 December 2008. Immediately prior to theacquisition of Hong Kong Imaging, 10,200 shares and 9,800 shares of HKID Limited, representing 51%and 49% of the total issued share capital of HKID Limited, respectively, were held by Pixel andPegasus, respectively. HKID Limited holds 51% and 51% of the issued share capital of HKID (Lab) andHKID (MRI), respectively.

On 30 October 2019, the entire issued share capital of each of Pixel and Pegasus was acquired bySmart Winner. Please refer to the section headed ‘‘— Acquisition of Hong Kong Imaging’’ below fordetails of the acquisition. Immediately prior to the Reorganisation, HKID Limited was wholly owned bySmart Winner.

ACQUISITION OF HONG KONG IMAGING

As part of our plan to develop our Group into an integrated medical service provider and tosupplement our medical services with imaging, diagnostic and laboratory services, we acquired PixelInvestments Limited (‘‘Pixel’’) and Pegasus Investments Limited (‘‘Pegasus’’) (together with theirsubsidiaries, the ‘‘Hong Kong Imaging’’) in October 2019, each of which in turn respectively held 51%and 49% interest in HKID Limited (the holding company of Hong Kong Imaging) at the time ofacquisition. Pixel and Pegasus were acquired at a consideration of HK$16,256,496 and HK$15,618,985,respectively. Accordingly, our Group acquired Hong Kong Imaging at an aggregate consideration ofHK$31,875,481. The considerations for the assignment of shareholders’ loans in respect of Pixel andPegasus were HK$3 and HK$9, respectively. Please see below for the individual considerations withrespect to such acquisition.

Pixel

On 30 October 2019, we acquired through Smart Winner 5,100 shares of Pixel from Dr. Ooi GaikCheng. The 5,100 shares of Pixel then held by Dr. Ooi Gaik Cheng, representing 51% of the total issuedshares of Pixel, together with a shareholder’s loan in the sum of HK$606,135 advanced by Dr. Ooi GaikCheng to Pixel, were transferred and assigned to Smart Winner at a consideration of HK$8,290,813 andHK$1, respectively, which were determined with reference to (i) the net current asset value of Pixel asat 31 March 2019; and (ii) the price-earnings ratio of Pixel for the year ended 31 March 2019. 50% ofthe consideration for the 5,100 shares of Pixel was settled by the allotment and issuance of 4,145 sharesof CMH, credited as fully paid, representing approximately 0.41% of the then total issued shares ofCMH, to Dr. Ooi Gaik Cheng. The remaining 50% of the consideration for the 5,100 shares of Pixel andthe consideration of HK$1 for the assignment of the shareholder’s loan were settled in cash.

On 30 October 2019, we acquired through Smart Winner 4,300 shares of Pixel from Ms. TangWan Yin. The 4,300 shares of Pixel then held by Ms. Tang Wan Yin, representing 43% of the totalissued shares of Pixel, together with a shareholder’s loan in the sum of HK$511,055 advanced by Ms.


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Tang Wan Yin, were transferred and assigned to Smart Winner at a consideration of HK$5,990,293 andHK$1, respectively, which were determined with reference to (i) the net current asset value of Pixel asat 31 March 2019; and (ii) the price-earnings ratio of Pixel for the year ended 31 March 2019, and as aresult of an arm’s length negotiation between Smart Winner and Ms. Tang Wan Yin. Approximately33.51% of the consideration for the 4,300 shares of Pixel was settled by the allotment and issuance of2,007 shares of CMH, credited as fully paid, representing approximately 0.20% of the then total issuedshares of CMH, to Ms. Tang Wan Yin. The remaining approximately 66.49% of the consideration forthe 4,300 shares of Pixel and the consideration of HK$1 for the assignment of the shareholder’s loanwere settled in cash.

On 30 October 2019, we acquired through Smart Winner 600 shares of Pixel from Mr. Lo WaiKeung, Peter as vendor. The 600 shares of Pixel then held by Mr. Lo Wai Keung, Peter, representing6% of the total issued shares of Pixel, together with a shareholder’s loan in the sum of HK$71,310advanced by Mr. Lo Wai Keung, Peter, were transferred and assigned to Smart Winner at aconsideration of HK$1,975,390 and HK$1, respectively, which were determined with reference to (i) thenet current asset value of Pixel as at 31 March 2019; and (ii) the price-earnings ratio of Pixel for theyear ended 31 March 2019, and as a result of an arm’s length negotiation between Smart Winner andMr. Lo Wai Keung, Peter. The considerations for the 600 shares of Pixel and the shareholder’s loanwere settled by the allotment and issuance 1,975 shares of CMH, credited as fully paid, representingapproximately 0.20% of the then total issued shares of CMH, to Mr. Lo Wai Keung, Peter.

Pegasus

On 30 October 2019, we acquired through Smart Winner 3,400 shares, 1,400 shares, 600 shares,600 shares, 600 shares, 600 shares and 600 shares of Pegasus, from Mr. Fok Manson, Mr. Yiu SingNam, Mrs. Tsang, Dr. Chu Kin Wah, Hong Kong Oncology Centre Company Limited, Ms. Liu PikChing Emma (as executrix of the estate of Mr. Hu Hsing Cheng Wayne James) and Mr. Teo Man LungPeter, respectively. These 7,800 shares of Pegasus in aggregate represent 78% of the total issued sharesof Pegasus. The 3,400 shares, 1,400 shares, 600 shares, 600 shares, 600 shares, 600 shares and 600shares then held by Mr. Fok Manson, Mr. Yiu Sing Nam, Mrs. Tsang, Dr. Chu Kin Wa, Hong KongOncology Centre Company Limited, Ms. Liu Pik Ching Emma (as executrix of the estate of Mr. HuHsing Cheng Wayne James) and Mr. Teo Man Lung Peter, respectively, representing 34%, 14%, 6%,6%, 6%, 6% and 6% of the total issued shares of Pegasus, together with the shareholders’ loans in thesums of HK$428,910, HK$176,610, HK$75,690, HK$75,690, HK$75,690, HK$147,720 andHK$75,690, respectively, were transferred and assigned to Smart Winner at a consideration ofHK$5,310,455, HK$2,186,658, HK$937,139, HK$937,139, HK$937,139, HK$937,139 andHK$937,139, respectively, for the shares, and at a consideration of HK$1, HK$1, HK$1, HK$1, HK$1,HK$1 and HK$1, respectively, for the shareholders’ loans, which were all determined with reference to(i) the net current asset value of Pegasus as at 31 March 2019; and (ii) the price-earnings ratio ofPegasus for the year ended 31 March 2019 and were settled in cash.

On 30 October 2019, we acquired through Smart Winner 1,600 shares of Pegasus from Dr. LauChu Pak. The 1,600 shares of Pegasus then held by Dr. Lau Chu Pak, representing 16% of the totalissued shares of Pegasus, together with a shareholder’s loan in the sum of HK$201,840 advanced by Dr.Lau Chu Pak, were transferred and assigned to Smart Winner at a consideration of HK$2,499,038 andHK$1, respectively, which were determined with reference to (i) the net current asset value of Pegasusas at 31 March 2019; and (ii) the price-earnings ratio of Pegasus for the year ended 31 March 2019.50% of the consideration for the 1,600 shares of Pegasus was settled by the allotment and issuance of1,249 shares of CMH, credited as fully paid, representing approximately 0.12% of the then total issuedshares of CMH, to Dr. Lau Chu Pak. The remaining 50% of the consideration for the 1,600 shares ofPegasus and the consideration of HK$1 for the assignment of the shareholder’s loan were settled in cash.

On 30 October 2019, we acquired through Smart Winner 600 shares of Pegasus from Dr. Liu ChiLeung. The 600 shares of Pegasus then held by Dr. Liu Chi Leung, representing 6% of the total issuedshares of Pegasus, together with a shareholder’s loan in the sum of HK$75,690 advanced by Dr. Liu ChiLeung to Pegasus, were transferred and assigned to Smart Winner at a consideration of HK$937,139 andHK$1, respectively, which were determined with reference to (i) the net current asset value of Pegasusas at 31 March 2019; and (ii) the price-earnings ratio of Pegasus for the year ended 31 March 2019.50% of the consideration for the 600 shares of Pegasus was settled by the allotment and issuance of 468shares of CMH, credited as fully paid, representing approximately 0.05% of the then total issued sharesof CMH, to Dr. Liu Chi Leung. The remaining 50% of the consideration for the 600 shares of Pegasusand the consideration of HK$1 for the assignment of the shareholder’s loan were settled in cash.


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These transfers of shares of Pixel and shares of Pegasus have been properly and legally completed.

Upon completion of the aforesaid share transfers, Smart Winner became the holding company ofPixel and Pegasus, and the acquisition of Hong Kong Imaging was completed on 30 October 2019. Asthe applicable percentage ratios for the acquisition of Hong Kong Imaging are all less than 25%, suchacquisition does not constitute a major transaction as defined under Chapter 14 of the Listing Rules, andhence is not subject to the disclosure requirement pursuant to Rule 4.05A of the Listing Rules. Asimplified structure upon completion of the acquisition of Hong Kong Imaging is set out below:

51% 51%

100% 100%

51% 49%

HKID Limited

(HK)

Pixel

(HK)

Pegasus

(HK)

Smart Winner

(Seychelles)

HKID (Lab)

(HK)

HKID (MRI)

(HK)

To simplify the structure of Hong Kong Imaging, we transferred out Pixel and Pegasus, being theintermediate holding companies of our Group. Upon completion of the aforesaid share transfers, (i)HKID Limited was wholly owned by Smart Winner, a direct wholly-owned subsidiary of CMH; (ii)HKID (Lab) became an indirect non-wholly-owned subsidiary of CMH. HKID (Lab) was held as to 51%by HKID Limited, 13% by Dr. Ooi Gaik Cheng, 10% by Ms. Tang Wan Yin, 10% by Mr. Teo ManLung Peter, 8% by Ms. Wong Ching Ying Isobel, 5% by Mr. Fung Wing Tak and 3% by Dr. KennethTsang jointly with Mrs. Tsang, respectively; (iii) HKID (MRI) became an indirect non-wholly-ownedsubsidiary of CMH. HKID (MRI) was held as to 51% by HKID Limited, 8% by Ms. Wong Ching YingIsobel, 8% by Eastern Summit Enterprise Limited, 8% by Mr. Teo Man Lung Peter, 6% by Dr. Ooi GaikCheng, 5% by Mr. Fung Wing Tak, 5% by Hong Kong Oncology Centre Company Limited, 3% by Ms.Tang Wan Yin, 3% by Mr. Wong Chun Kuen and 3% by Dr. Kenneth Tsang jointly with Mrs. Tsang,respectively; and (iv) Pixel and Pegasus ceased to be members of our Group.


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OUR GROUP STRUCTURE PRIOR TO THE REORGANISATION

The chart below sets out the corporate structure of our Group immediately prior to theReorganisation:

37.32%

22.94%

10.74%

2.46%

6.54%

5.0%

5.00%

10.0%

3.5%

3.5%

2.0%

2.0%

2.0%

2.0%

1.0%

1.0%

83%

81.52%

11.65%

100%

100

%

100

%

100%

100%

0.47%

0.92%

1.44%

100

%

95

%

100%

100

%

51%

51%

100

%

100

%

100%

4.00%

HK

MC

Med

ical

Pro

ducts

(HK

)

Med

ical Concierg

e

Hold

ing

(BV

I)

Hong K

ong M

edical

Consu

ltants

(HK

)

Cen

tralPharm

(HK

)

HK

MC

Den

tal

(HK

)

Cen

tral Health

care

Lim

ited

(HK

)

HK

Brain

Mem

ory

(HK

)

Med

ical Concierg

e

Lim

ited(1

1)

(BV

I)

Med

ical Concierg

e

Man

agem

ent

(BV

I)

HK

ID (L

ab)

(12

)

(HK

)

HK

ID (M

RI)

(13

)

(HK

)

HK

ID L

imited

(HK

)

Sm

art Win

ner

(Sey

chelles)

CM

H

(BV

I)

CM

I

(BV

I)

Our C

om

pan

y

(Cay

man

Islands)

CH

G(1

)

(BV

I)

Dr. Kenneth Tsang(1)

Dr. Adam Leung(1)

Dr. Jason Fong(1)

Dr. Chu Leung Wing(1)

Dr. Jenny Tsang(1)

Wealth Basin(1)(2)

Les Trois(1)(3)

Central Medical

Management(4)

Dr. Clement Lee(5)

Dr. Boron Cheng(5)

Dr. Ada Ma(5)

Dr. Kenneth Ng

Dr. Gordon Chau

Dr. Barbara Tam

Dr. Matthew Ng(5)

Dr. Lo Wai Kei(5)

Tranche 2 Pre-[REDACTED]

Investor(7)


Investors(6)


Investors(8)


Investors(9)


Investor(10)


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Notes:

(1) Pursuant to the Concert Party Deed, CHG, Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing, Dr.Jenny Tsang, Mr. Shiu, Wealth Basin, Mrs. Chen and Les Trois are parties acting in concert.

(2) Wealth Basin is a company wholly owned by Mr. Shiu.

(3) Les Trois is a company wholly owned by Mrs. Chen.

(4) Central Medical Management is held as to 51%, 41% and 8% by Dr. Kenneth Tsang, Mr. Shiu and Dr. Adam Leung,respectively.

(5) Each of Dr. Clement Lee, Dr. Boron Cheng, Dr. Matthew Ng and Dr. Lo Wai Kei is an Equity Partner Doctor. Dr. Ada Mais an ex-Equity Partner Doctor.

(6) The breakdown of the respective shareholding interests held by the Tranche 1 Pre-[REDACTED] Investors in CMH is asfollows:

(i) Double Expert Limited: 2.33%;(ii) Joyous Rainbow Holdings Limited: 2.14%;(iii) Hong Kong Dashenlin Trade and Investment Limited: 1.86%;(iv) Asmex Investment Limited: 1.68%;(v) Goldstone Investment Capital Limited: 1.30%;(vi) Cheung Hing Holdings Limited: 0.93%;(vii) Star List Limited: 0.47%;(viii) Clear Trillion Limited: 0.47%; and(ix) Pine Treasure Holdings Limited: 0.47%.

Please refer to the section headed ‘‘— Pre-[REDACTED] Investments — Information about the Pre-[REDACTED]Investors’’ for further details of the Tranche 1 Pre-[REDACTED] Investors.

(7) The shareholding interest held by the Tranche 2 Pre-[REDACTED] Investor, namely, CEKA Limited, a company whollyowned by Dr. Eddie Cheung, an Equity Partner Doctor, in CMH, is 0.47%. Please refer to the section headed ‘‘— Pre-[REDACTED] Investments — Information about the Pre-[REDACTED] Investors’’ for further details of the Tranche 2 Pre-[REDACTED] Investor.


(i) Dr. Ooi Gaik Cheng: 0.39%;(ii) Ms. Tang Wan Yin: 0.19%;(iii) Mr. Lo Wai Keung Peter: 0.18%;(iv) Dr. Lau Chu Pak: 0.12%; and(v) Dr. Liu Chi Leung: 0.04%.



(i) Hong Kong Clinical Oncology Limited, a company wholly owned by Dr. Stanley Yu, an Equity Partner Doctor:0.96%; and

(ii) Centre for Obesity, Diabetes and Endocrinology (CODE) Limited, a company wholly owned by Dr. Michele Yuen,an Equity Partner Doctor: 0.48%.


(10) The shareholding interest held by the Tranche 5 Pre-[REDACTED] Investor, namely, Unicorn Link Group Limited, in CMHis 4%. Please refer to the section headed ‘‘— Pre-[REDACTED] Investments — Information about the Pre-[REDACTED]Investors’’ for further details of the Tranche 5 Pre-[REDACTED] Investor.

(11) Medical Concierge Limited is held as to 95% and 5% by Medical Concierge Holding Limited and Real Energetic Limited,respectively. Real Energetic Limited is wholly owned by Ms. Yeung Kit Shun, who is a member of our senior management.

(12) HKID (Lab) is held as to 51% by HKID Limited, 13% by Dr. Ooi Gaik Cheng, 10% by Ms. Tang Wan Yin, 10% by Mr.Teo Man Lung Peter, 8% by Ms. Wong Ching Ying Isobel, 5% by Mr. Fung Wing Tak and 3% by Dr. Kenneth Tsangjointly with Mrs. Tsang, respectively. Each of Dr. Ooi Gaik Cheng and Ms. Tang Wan Yin is a Pre-[REDACTED] Investor;Mrs. Tsang is the spouse of Dr. Kenneth Tsang; and each of Mr. Teo Man Lung, Peter, Ms. Wong Ching Ying Isobel andMr. Fung Wing Tak is an Independent Third Party.

(13) HKID (MRI) is held as to 51% by HKID Limited, 8% by Ms. Wong Ching Ying Isobel, 8% by Eastern Summit EnterpriseLimited, 8% by Mr. Teo Man Lung Peter, 6% by Dr. Ooi Gaik Cheng, 5% by Mr. Fung Wing Tak, 5% by Hong KongOncology Centre Company Limited, 3% by Ms. Tang Wan Yin, 3% by Mr. Wong Chun Kuen and 3% by Dr. KennethTsang jointly with Mrs. Tsang, respectively. Each of Dr. Ooi Gaik Cheng and Ms. Tang Wan Yin is a Pre-[REDACTED]Investor; Mrs. Tsang is the spouse of Dr. Kenneth Tsang; and each of Mr. Fung Wing Tak, Ms. Wong Ching Ying Isobel,Mr. Teo Man Lung Peter, Mr. Wong Chun Kuen, Hong Kong Oncology Centre Company Limited and Eastern SummitEnterprise Limited is an Independent Third Party.


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REORGANISATION

In preparation for the [REDACTED], our Group underwent the Reorganisation, the major steps ofwhich are set out below:

Incorporation of Our Company and Changes in Its Shareholding Structure

(1) Our Company was incorporated in the Cayman Islands as an exempted company with limitedliability on 21 September 2020 with an authorised share capital of HK$380,000 comprising38,000,000,000 Shares with a par value of HK$0.00001 each. One fully paid Share wasallotted and issued to the initial subscriber, an Independent Third Party, which wassubsequently transferred to CHG at par value on the same day. Upon completion of theaforesaid transfer, our Company became wholly owned by CHG.

(2) On 23 October 2020, our Company as purchaser, and CMI and the Pre-[REDACTED]Investors as vendors, entered into a share swap agreement, whereby our Company acquired1,073,307 shares of CMH, representing 100% of the total issued shares of CMH, at aconsideration of HK$1,073,307, which was settled through the allotment and issue of1,073,306 Shares at par, credited as fully paid, at the direction of CMI and the Pre-[REDACTED] Investors, to the following subscribers (the ‘‘Share Swap’’):

(a) 726,249 Shares were allotted and issued to CHG;

(b) 30,625 Shares were allotted and issued to Wealth Splendour Limited;

(c) 30,625 Shares were allotted and issued to Dr. Boron Cheng;

(d) 17,500 Shares were allotted and issued to Cambridge Oncology Limited;

(e) 17,500 Shares were allotted and issued to Dr. Gordon Chau;

(f) 17,500 Shares were allotted and issued to Dr. Kenneth Ng;

(g) 17,500 Shares were allotted and issued to Dr. Barbara Tam;

(h) 8,750 Shares were allotted and issued to Dr. Lo Wai Kei;

(i) 8,750 Shares were allotted and issued to Dr. Matthew Ng;

(j) 25,000 Shares were allotted and issued to Double Expert Limited;

(k) 23,000 Shares were allotted and issued to Joyous Rainbow Holdings Limited;

(l) 20,000 Shares were allotted and issued to Hong Kong Dashenlin Trade and InvestmentLimited;

(m) 18,000 Shares were allotted and issued to Asmex Investment Limited;

(n) 14,000 Shares were allotted and issued to Goldstone Investment Capital Limited;

(o) 10,000 Shares were allotted and issued to Cheung Hing Holdings Limited;

(p) 5,000 Shares were allotted and issued to Star List Limited;

(q) 5,000 Shares were allotted and issued to Pine Treasure Holdings Limited;

(r) 5,000 Shares were allotted and issued to Clear Trillion Limited;

(s) 5,075 Shares were allotted and issued to CEKA Limited;

(t) 4,145 Shares were allotted and issued to Dr. Ooi Gaik Cheng;

(u) 2,007 Shares were allotted and issued to Ms. Tang Wan Yin;

(v) 1,975 Shares were allotted and issued to Mr. Lo Wai Keung Peter;

(w) 1,249 Shares were allotted and issued to Dr. Lau Chu Pak; and

(x) 468 Shares were allotted and issued to Dr. Liu Chi Leung;

(y) 10,304 Shares were allotted and issued to Hong Kong Clinical Oncology Limited;


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(z) 5,152 Shares were allotted and issued to Centre for Obesity, Diabetes andEndocrinology (CODE) Limited; and

(aa) 42,932 Shares were allotted and issued to Unicorn Link Group Limited.

(3) Upon completion of the Share Swap, CMH became wholly owned by our Company.

No order, consent, approval, licence, authorisation or validation of or exemption by anygovernment or public body or authority of the Cayman Islands or any sub-division thereof isrequired to authorise or is required in connection with the execution, delivery, performanceand enforcement of the share swap agreement.

(4) Upon completion of the Share Swap, our Company became the ultimate holding company ofour Group. The table below sets out details of the shareholding interests held in ourCompany immediately before the [REDACTED] and the [REDACTED]:

Shareholders Number of SharesPercentage ofshareholding

(%)

CHG 726,250 67.66

Equity Partner DoctorsWealth Splendour Limited 30,625 2.85Dr. Boron Cheng 30,625 2.85Dr. Matthew Ng 8,750 0.82Dr. Lo Wai Kei 8,750 0.82Cambridge Oncology Limited 17,500 1.63Dr. Gordon Chau 17,500 1.63Dr. Kenneth Ng 17,500 1.63Dr. Barbara Tam 17,500 1.63

Tranche 1 Pre-[REDACTED] InvestorsDouble Expert Limited 25,000 2.33Joyous Rainbow Holdings Limited 23,000 2.14Hong Kong Dashenlin Trade and Investment Limited 20,000 1.86Asmex Investment Limited 18,000 1.68Goldstone Investment Capital Limited 14,000 1.30Cheung Hing Holdings Limited 10,000 0.93Star List Limited 5,000 0.47Clear Trillion Limited 5,000 0.47Pine Treasure Holdings Limited 5,000 0.47

Tranche 2 Pre-[REDACTED] InvestorCEKA Limited 5,075 0.47

Tranche 3 Pre-[REDACTED] InvestorsDr. Ooi Gaik Cheng 4,145 0.39Ms. Tang Wan Yin 2,007 0.19Mr. Lo Wai Keung, Peter 1,975 0.18Dr. Lau Chu Pak 1,249 0.12Dr. Liu Chi Leung 468 0.04

Tranche 4 Pre-[REDACTED] InvestorsHong Kong Clinical Oncology Limited 10,304 0.96Centre for Obesity, Diabetes and Endocrinology (CODE) Limited 5,152 0.48

Tranche 5 Pre-[REDACTED] InvestorUnicorn Link Group Limited 42,932 4.00

Total 1,073,307 100.00


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PRE-[REDACTED] INVESTMENTS

Overview

Our Group entered into agreements with the Pre-[REDACTED] Investors in five tranches, whichwere completed on 31 March 2019 (the ‘‘Tranche 1 Pre-[REDACTED] Investment Agreement’’), 23August 2019 (the ‘‘Tranche 2 Pre-[REDACTED] Investment Agreement’’), 30 October 2019 (the‘‘Tranche 3 Pre-[REDACTED] Investment Agreements’’), 1 August 2020 (the ‘‘Tranche 4 Pre-[REDACTED] Investment Agreements’’) and 27 August 2020 (together with a supplemental agreementdated 15 September 2020, the ‘‘Tranche 5 Pre-[REDACTED] Investment Agreement’’) (collectively,the ‘‘Pre-[REDACTED] Investment Agreements’’), respectively. Upon completion of the Pre-[REDACTED] Investments, the Pre-[REDACTED] Investors held in aggregate approximately 18.48% ofthe total issued shares in CMH on an ‘‘as enlarged’’ basis. Pursuant to the Share Swap that took placeon 23 October 2020, the Pre-[REDACTED] Investors transferred their respective entire shareholdinginterests, which in aggregate represented approximately 18.48% of the then total issued shares in CMHto our Company in consideration of our Company’s allotment and issuance of approximately 18.48% inaggregate of the total issued shares of our Company to the Pre-[REDACTED] Investors pro rata to theirrespective interests in CMH. As a result, the Pre-[REDACTED] Investors held in aggregateapproximately 18.48% of the total issued shares of our Company upon completion of the Share Swapand as at the Latest Practicable Date, and will hold [REDACTED]% immediately after completion of the[REDACTED] and the [REDACTED]. Our Directors believe that our Group will benefit from theadditional capital provided by the Pre-[REDACTED] Investors for the development, growth andexpansion of our Group’s business and operation.

Tranche 1 Pre-[REDACTED] Investment in CMH by the Tranche 1 Pre-[REDACTED] Investors

Pursuant to the Tranche 1 Pre-[REDACTED] Investment Agreement dated 29 March 2019 enteredinto between CMH and Double Expert Limited, Joyous Rainbow Holdings Limited, Hong KongDashenlin Trade and Investment Limited, Asmex Investment Limited, Goldstone Investment CapitalLimited, Cheung Hing Holdings Limited, Star List Limited, Clear Trillion Limited and Pine TreasureHoldings Limited, each an Independent Third Party (collectively, the ‘‘Tranche 1 Pre-[REDACTED]Investors’’), respectively, Double Expert Limited, Joyous Rainbow Holdings Limited, Hong KongDashenlin Trade and Investment Limited, Asmex Investment Limited, Goldstone Investment CapitalLimited, Cheung Hing Holdings Limited, Star List Limited, Clear Trillion Limited and Pine TreasureHoldings Limited subscribed for, and CMH allotted and issued, 25,000, 23,000, 20,000, 18,000, 14,000,10,000, 5,000, 5,000 and 5,000 shares in CMH, respectively, at a consideration of HK$25,000,000,HK$23,000,000, HK$20,000,000, HK$18,000,000, HK$14,000,000, HK$10,000,000, HK$5,000,000,HK$5,000,000 and HK$5,000,000, respectively, representing 2.5%, 2.3%, 2.0%, 1.8%, 1.4%, 1.0%,0.5%, 0.5% and 0.5%, respectively, of the then total issued shares of CMH (the ‘‘Tranche 1 Pre-[REDACTED] Investment’’). The Tranche 1 Pre-[REDACTED] Investors subscribed for a total of125,000 shares in CMH at a total consideration of HK$125,000,000. The total consideration ofHK$125,000,000 was determined based on arm’s length negotiation with reference to our Group’s profitfor the year ended 31 March 2018. The proceeds from the Tranche 1 Pre-[REDACTED] Investment wereintended to be used in three areas in the proportions indicated: (i) approximately 3.0% on thedevelopment of our Group’s proprietary management system; (ii) approximately 19.9% on generalworking capital and approximately 41.1% on funding for mergers and acquisitions; and (iii)approximately 36.0% on the expenses in relation to the [REDACTED]. The subscriptions under theTranche 1 Pre-[REDACTED] Investment were completed and fully settled on 31 March 2019. As at theLatest Practicable Date, the proceeds from the Tranche 1 Pre-[REDACTED] Investment had been fullyutilised: (i) a new proprietary management system, including the setting up of a new accounting system,website development and IT system upgrade, has been implemented with an objective to facilitate moreefficient management of our Group’s operations and the system is currently in operation; (ii) theproceeds for general working capital have been utilised for various purposes, including renovations,purchase of office and medical equipment, salaries and rental payments. As for the funding for mergersand acquisitions, the acquisition of Hong Kong Imaging was completed in October 2019 and theremaining portion designated for such purpose has been allocated for the settlement of expenses incurredpertinent to the purchase of the 6th floor of Euro Trade Centre, including deposit, stamp duties and realestate agent commissions; and (iii) the proceeds for expenses in relation to the [REDACTED] have beenallocated in settlement of such expenses.


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Tranche 2 Pre-[REDACTED] Investment in CMH by the Tranche 2 Pre-[REDACTED] Investor

Pursuant to the Tranche 2 Pre-[REDACTED] Investment Agreement dated 23 August 2019 enteredinto between CMH and CEKA Limited (the ‘‘Tranche 2 Pre-[REDACTED] Investor’’), a companywholly owned by Dr. Eddie Cheung, an Equity Partner Doctor, CEKA Limited subscribed for, and CMHallotted and issued, 5,075 shares in CMH, at a consideration of HK$5,075, representing approximately0.5% of the then total issued shares of CMH (the ‘‘Tranche 2 Pre-[REDACTED] Investment’’). Thetotal consideration of HK$5,075 was determined based on arm’s length negotiation and in considerationof our recruiting Dr. Eddie Cheung to join our Group as an Equity Partner Doctor. A higher discountwas offered to the Tranche 2 Pre-[REDACTED] Investor compared with other Pre-[REDACTED]Investors (excluding Tranche 4 Pre-[REDACTED] Investors) in view of the contribution to be made byDr. Eddie Cheung upon his joining us as an Equity Partner Doctor. Our Directors believe that thegranting of such a discount to Dr. Eddie Cheung in respect of the Tranche 2 Pre-[REDACTED]Investment would offer an added incentive to increase his loyalty and commitment to serving as amedical practitioner in our Group. The proceeds from the Tranche 2 Pre-[REDACTED] Investment wereto be used for general working capital. The subscription under the Tranche 2 Pre-[REDACTED]Investment was completed and settled on 23 August 2019. As at the Latest Practicable Date, theproceeds from the Tranche 2 Pre-[REDACTED] Investment had been fully utilised.

The Tranche 2 Pre-[REDACTED] Investment is in the form of share-based payments. The share-based payment expense in respect of the Tranche 2 Pre-[REDACTED] Investment is calculated as thefair value of shares issued on the grant date less subscription money received from Dr. Eddie Cheung,which was approximately HK$5.1 million, and is amortised over the service period (until the[REDACTED] plus five years). The fair value of such shares subscribed by Dr. Eddie Cheung was basedon the Group’s valuation as at the subscription date. For details of the relevant accounting treatment,please see Notes 2.21 and 23(b) to our consolidated financial statements set out in the Accountant’sReport included in Appendix I to this document.


As consideration for the acquisition of Hong Kong Imaging, pursuant to the related sale andpurchase agreements all dated 30 October 2019, on 30 October 2019, 4,145, 2,007, 1,975, 1,249 and468 shares, representing approximately 0.41%, 0.20%, 0.20%, 0.12% and 0.05% of the then total issuedshares of CMH, respectively, were allotted and issued to Dr. Ooi Gaik Cheng, Ms. Tang Wan Yin, Mr.Lo Wai Keung, Peter, Dr. Lau Chu Pak and Dr. Liu Chi Leung (collectively, the ‘‘Tranche 3 Pre-[REDACTED] Investors’’), respectively, at a consideration of HK$4,145,406, HK$2,007,452,HK$1,975,390, HK$1,249,519 and HK$468,570, respectively (the ‘‘Tranche 3 Pre-[REDACTED]Investment’’). Pursuant to the sale and purchase agreements, the Tranche 3 Pre-[REDACTED] Investorssubscribed for a total of 9,844 shares representing 0.98% of the then total issued shares of CMH at atotal consideration of HK$9,846,337. The total consideration of HK$9,846,337 was determined based onarm’s length negotiation with reference to the valuation of the Hong Kong Imaging. The subscriptionsunder the Tranche 3 Pre-[REDACTED] Investment were completed and fully settled on 30 October2019.


Pursuant to the Tranche 4 Pre-[REDACTED] Investment Agreements both dated 1 August 2020,entered into between CMH and each of Hong Kong Clinical Oncology Limited (a company whollyowned by Dr. Stanley Yu, an Equity Partner Doctor of our Group) and Centre for Obesity, Diabetes andEndocrinology (CODE) Limited (a company wholly owned by Dr. Michele Yuen, an Equity PartnerDoctor of our Group) (collectively, the ‘‘Tranche 4 Pre-[REDACTED] Investors’’), respectively, HongKong Clinical Oncology Limited and Centre for Obesity, Diabetes and Endocrinology (CODE) Limitedsubscribed for, and CMH allotted and issued to Hong Kong Clinical Oncology Limited and Centre forObesity, Diabetes and Endocrinology (CODE) Limited 10,304 and 5,152 shares in CMH, respectively, ata consideration of HK$10,304 and HK$5,152, respectively, representing 1.0% and 0.5% of the then totalissued shares of CMH (the ‘‘Tranche 4 Pre-[REDACTED] Investment’’). The Tranche 4 Pre-[REDACTED] Investors subscribed for a total of 15,456 shares in CMH at a total consideration ofHK$15,456. The total consideration of HK$15,456 was determined based on arm’s length negotiationand the consideration of recruiting Dr. Stanley Yu and Dr. Michele Yuen to join our Group as ourEquity Partner Doctors. A higher discount was offered to the Tranche 4 Pre-[REDACTED] Investorscompared with other Pre-[REDACTED] Investors (excluding Tranche 2 Pre-[REDACTED] Investor) inview of the contribution to be made by each of Dr. Stanley Yu and Dr. Michele Yuen upon their joiningus as Equity Partner Doctors. Our Directors believe that the granting of such a discount to Dr. StanleyYu and Dr. Michele Yuen in respect of the Tranche 4 Pre-[REDACTED] Investment would offer an


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added incentive to increase their loyalty and commitment to serving as medical practitioners in ourGroup. The proceeds from the Tranche 4 Pre-[REDACTED] Investment shall be used for generalworking capital. The subscriptions under the Tranche 4 Pre-[REDACTED] Investment were completedand settled on 1 August 2020. As at the Latest Practicable Date, the proceeds from the Tranche 4 Pre-[REDACTED] Investment had been fully utilised.

The Tranche 4 Pre-[REDACTED] Investment is in the form of share-based payments. The share-based payment expenses in respect of the Tranche 4 Pre-[REDACTED] Investment are calculated as thefair value of shares issued on the grant date less subscription money received from Dr. Stanley Yu andDr. Michele Yuen, which were approximately HK$13.4 million and HK$6.7 million, respectively, and isamortised over the service period (until the [REDACTED] plus five years). The fair value of such sharesrespectively subscribed by Dr. Stanley Yu and Dr. Michele Yuen was based on the Group’s valuation asat the subscription date. For details of the relevant accounting treatment, please see Notes 2.21 and23(b) to our consolidated financial statements set out in the Accountant’s Report included in Appendix Ito this document.

Tranche 5 Pre-[REDACTED] Investment in CMH by the Tranche 5 Pre-[REDACTED] Investor

Pursuant to the Tranche 5 Pre-[REDACTED] Investment Agreement dated 27 August 2020, (asamended by a supplemental agreement dated 15 September 2020) entered into between CMH andUnicorn Link Group Limited (the ‘‘Tranche 5 Pre-[REDACTED] Investor’’), Unicorn Link GroupLimited subscribed for, and CMH allotted and issued to Unicorn Link Group Limited 42,932 shares inCMH, at a consideration of HK$60,000,000, representing approximately 4.00% of the then total issuedshares of CMH (the ‘‘Tranche 5 Pre-[REDACTED] Investment’’). The total consideration ofHK$60,000,000 was determined based on arm’s length negotiation with reference to the price-earningsratio of CMH for the year ended 31 March 2020. The proceeds from the Tranche 5 Pre-[REDACTED]Investment are to be used for (i) expenses in relation to the [REDACTED]; and (ii) funding for mergersand acquisitions. The subscription under the Tranche 5 Pre-[REDACTED] Investment was completedand settled on 15 September 2020. As at the Latest Practicable Date, the proceeds from the Tranche 5Pre-[REDACTED] Investment had not been utilised.

No special rights conferred under the Pre-[REDACTED] Investment Agreements will survive upon[REDACTED].

The tables below summarise the details of the Pre-[REDACTED] Investments:

Name of Pre-[REDACTED]Investor

DoubleExpertLimited

JoyousRainbowHoldingsLimited

Hong KongDashenlinTrade andInvestmentLimited

AsmexInvestmentLimited

GoldstoneInvestmentCapitalLimited

CheungHing

HoldingsLimited

Star ListLimited

ClearTrillionLimited

PineTreasureHoldingsLimited

Date of the Pre-[REDACTED]Investment Agreement

29 March2019

29 March2019

29 March2019

29 March2019

29 March2019

29 March2019

29 March2019

29 March2019

29 March2019

Settlement date 31 March2019

31 March2019

31 March2019

31 March2019

31 March2019

31 March2019

31 March2019

31 March2019

31 March2019

Amount of consideration(HK$)

25,000,000 23,000,000 20,000,000 18,000,000 14,000,000 10,000,000 5,000,000 5,000,000 5,000,000

Number of Shares ownedimmediately upon[REDACTED]

[REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED]

Approximate cost per Shareimmediately upon[REDACTED] (HK$)


Shareholding interest of thePre-[REDACTED] Investorin our Companyimmediately upon[REDACTED](1)


Discount/(premium) over mid-point of the [REDACTED]range(2)


Notes:

(1) For illustration purposes only, on the basis of our enlarged issued shares immediately upon completion of the [REDACTED]and the [REDACTED] (without taking into account the Shares which may be issued pursuant to the exercise of the[REDACTED] and any Shares to be issued upon the exercise of any options which may be granted under the Share OptionScheme).

(2) For illustration purposes only, assuming that the [REDACTED] is HK$[REDACTED] per [REDACTED] (being the mid-point of the [REDACTED] range between HK$[REDACTED] and HK$[REDACTED] per [REDACTED]).


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Name of Pre-[REDACTED] Investor

CEKALimited

Dr. OoiGaik Cheng

Ms. TangWan Yin

Mr. LoWai Keung,

PeterDr. LauChu Pak

Dr. LiuChi Leung

Hong KongClinicalOncologyLimited

Centre forObesity,

Diabetes andEndocrinology

(CODE)Limited

UnicornLink GroupLimited

Date of the Pre-[REDACTED]Investment Agreement

23 August2019

30 October2019

30 October2019

30 October2019

30 October2019

30 October2019

1 August2020

1 August2020

27 August2020

Settlement date 23 August2019

30 October2019

30 October2019

30 October2019

30 October2019

30 October2019

1 August2020

1 August2020

27 August2020

Amount of consideration(HK$)

5,075 4,145,406 2,007,452 1,975,390 1,249,519 468,570 10,304 5,152 60,000,000

Number of Shares ownedimmediately upon[REDACTED]


Approximate cost per Shareimmediately upon[REDACTED] (HK$)


Shareholding interest of thePre-[REDACTED]Investor in our Companyimmediately upon[REDACTED](1)


Discount/(premium) overmid-point of the[REDACTED] range(2)


Notes:

(1) For illustration purposes only, on the basis of our enlarged issued shares immediately upon completion of the [REDACTED]and the [REDACTED] (without taking into account the Shares which may be issued pursuant to the exercise of the[REDACTED] and any Shares to be issued upon the exercise of any options which may be granted under the Share OptionScheme).

(2) For illustration purposes only, assuming that the [REDACTED] is HK$[REDACTED] per [REDACTED] (being the mid-point of the [REDACTED] range between HK$[REDACTED] and HK$[REDACTED] per [REDACTED]).

Pursuant to their respective Pre-[REDACTED] Investment Agreements, the Pre-[REDACTED]Investors are not subject to any lock-up arrangements. However, Tranche 1 Pre-[REDACTED] Investors,Tranche 2 Pre-[REDACTED] Investor, Tranche 4 Pre-[REDACTED] Investors and Tranche 5 Pre-[REDACTED] Investor subsequently signed a lock-up undertaking, pursuant to which each of themunconditionally and irrevocably undertakes not to, during the six-month period from the [REDACTED],dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interestsor encumbrances in respect of, any of those securities of the Company held by them. Tranche 3 Pre-[REDACTED] Investors are not subject to any lock-up arrangements.

Among the Pre-[REDACTED] Investors, each of Dr. Ooi Gaik Cheng and Ms. Tang Wan Yin is acore connected person of our Company. Hence, other than the [REDACTED] Shares in aggregate heldby Dr. Ooi Gaik Cheng and Ms. Tang Wan Yin, all the Shares held by the other Pre-[REDACTED]Investors (being Independent Third Parties) will be counted as [REDACTED] for the purpose of Rule8.08 of the Listing Rules. Immediately after completion of the [REDACTED] and the [REDACTED](without taking into account the Shares which may be issued pursuant to the exercise of the[REDACTED] and any Shares to be issued upon the exercise of any options which may be grantedunder the Share Option Scheme), the Pre-[REDACTED] Investors will hold in aggregate[REDACTED]% shareholding in our Company and the breakdown of the shareholding of each of thePre-[REDACTED] Investors is as follows:


(%)

Tranche 1 Pre-[REDACTED] InvestorsDouble Expert Limited [REDACTED] [REDACTED]Joyous Rainbow Holdings Limited [REDACTED] [REDACTED]Hong Kong Dashenlin Trade and Investment Limited [REDACTED] [REDACTED]Asmex Investment Limited [REDACTED] [REDACTED]Goldstone Investment Capital Limited [REDACTED] [REDACTED]Cheung Hing Holdings Limited [REDACTED] [REDACTED]Star List Limited [REDACTED] [REDACTED]Clear Trillion Limited [REDACTED] [REDACTED]Pine Treasure Holdings Limited [REDACTED] [REDACTED]


– 88 –



(%)

Tranche 2 Pre-[REDACTED] InvestorCEKA Limited [REDACTED] [REDACTED]

Tranche 3 Pre-[REDACTED] InvestorsDr. Ooi Gaik Cheng [REDACTED] [REDACTED]Ms. Tang Wan Yin [REDACTED] [REDACTED]Mr. Lo Wai Keung, Peter [REDACTED] [REDACTED]Dr. Lau Chu Pak [REDACTED] [REDACTED]Dr. Liu Chi Leung [REDACTED] [REDACTED]

Tranche 4 Pre-[REDACTED] InvestorsHong Kong Clinical Oncology Limited [REDACTED] [REDACTED]Centre for Obesity, Diabetes and Endocrinology (CODE) Limited [REDACTED] [REDACTED]

Tranche 5 Pre-[REDACTED] InvestorUnicorn Link Group Limited [REDACTED] [REDACTED]

Total: [REDACTED] [REDACTED]

Information About the Pre-[REDACTED] Investors

Tranche 1 Pre-[REDACTED] Investors

Double Expert Limited

Double Expert Limited (‘‘Double Expert’’) was incorporated in the BVI with limited liability andis established as a special purpose company. Double Expert is in turn held as follows: 66% by ExpressGlow Limited (a company incorporated in Hong Kong with limited liability) (‘‘Express Glow’’), 20%by Ironwood Asia Limited (a company incorporated in the BVI with limited liability) (‘‘IronwoodAsia’’), 10% by Max Giant Investment Holdings Limited (a company incorporated in the BVI withlimited liability) (‘‘Max Giant’’) and 4% by Ms. Xu Huihui (‘‘Ms. Xu’’), respectively. Express Glow iswholly owned by Asia Explorer Holdings Limited (a company incorporated in the BVI with limitedliability) (‘‘Asia Explorer’’) and the ultimate beneficial owner of Express Glow is Mr. Hao Zhanwei(‘‘Mr. Hao’’). Mr. Hao is chairman and a controlling shareholder of Shenzhen Hengbang WeiyeInvestment Group (深圳恆邦偉業投資集團). The ultimate beneficial owner of Ironwood Asia is Ms.Lisa Chow (‘‘Ms. Chow’’). Ms. Chow is senior director and deputy chairman of Sotheby’s Hong Kongand she has been with the company for over 15 years. The ultimate beneficial owner of Max Giant isMs. Sun Yen Sian Elaine (‘‘Ms. Sun’’). Ms. Sun is a jewellery designer and she runs her own jewellerybusiness in Hong Kong. Mr. Hao, Ms. Chow and Ms. Sun became acquainted with our Group throughMax Giant.

To the best knowledge of our Company, (i) Express Glow, Asia Explorer, Ironwood Asia, MaxGiant, Mr. Hao, Ms. Chow, Ms. Sun and Ms. Xu comprise financial investors entitled to share in theeconomic returns from Double Expert; (ii) Mr. Hao, Ms. Chow, Ms. Sun and Ms. Xu are high net worthindividuals with substantial investment experience in various sectors and industries; and (iii) each ofDouble Expert, Express Glow, Asia Explorer, Ironwood Asia, Max Giant, Mr. Hao, Ms. Chow, Ms. Sunand Ms. Xu are Independent Third Parties.

Joyous Rainbow Holdings Limited

Joyous Rainbow Holdings Limited was incorporated in the BVI with limited liability and isestablished as a special purpose company, which is wholly owned by a discretionary trust with Mr.Adam Kwok and his certain family members as discretionary beneficiaries. Joyous Rainbow HoldingsLimited and its beneficial owners are Independent Third Parties.

Hong Kong Dashenlin Trade and Investment Limited

Hong Kong Dashenlin Trade and Investment Limited was incorporated in Hong Kong with limitedliability and is a wholly-owned subsidiary of DaShenLin Pharmaceutical Group Co., Ltd. (大參林醫藥集團股份有限公司), the shares of which are listed on the Shanghai Stock Exchange (stock code: 603233).To the best knowledge of our Company, Hong Kong Dashenlin Trade and Investment Limited and thecontrolling shareholders of DaShenLin Pharmaceutical Group Co., Ltd. are Independent Third Parties.


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Asmex Investment Limited

Asmex Investment Limited was incorporated in the BVI with limited liability and is established asa special purpose company, which is wholly owned by Ms. Kwok Yue Yee. To the best knowledge ofour Company, Asmex Investment Limited and Ms. Kwok Yue Yee are Independent Third Parties.

Goldstone Investment Capital Limited

Goldstone Investment Capital Limited was incorporated in the BVI with limited liability and isestablished as a special purpose company, which is owned as to 50% and 50% by Mr. Tsang Chi WahTerrence and Mr. Lau Hiu Fung, respectively. Each of Mr. Tsang Chi Wah Terrence and Mr. Lau HiuFung is an experienced investor in various investments including property investments. Immediatelyprior to the Reorganisation, Goldstone Investment Capital Limited was a director of each of CMH,Central Healthcare Limited, Central Medical Consultants (currently known as HKMC Dental),CentralPharm, Hong Kong Medical Consultants and HK Brain Memory. On 20 October 2020,Goldstone Investment Capital Limited tendered its resignation as a director of each of CMH, CentralHealthcare Limited, Central Medical Consultants (currently known as HKMC Dental), CentralPharm,Hong Kong Medical Consultants and HK Brain Memory. To the best knowledge of our Company,Goldstone Investment Capital Limited, Mr. Tsang Chi Wah Terrence and Mr. Lau Hiu Fung areIndependent Third Parties.

Cheung Hing Holdings Limited

Cheung Hing Holdings Limited was incorporated in the BVI with limited liability and isestablished as a special purpose company, which is wholly owned by Mr. Wang Lishan. Mr. WangLishan is a substantial shareholder of Jutal Offshore Oil Services Limited, the shares of which are listedon the Main Board of the Stock Exchange (stock code: 3303). To the best knowledge of our Company,Cheung Hing Holdings Limited and Mr. Wang Lishan are Independent Third Parties.

Star List Limited

Star List Limited was incorporated in the BVI with limited liability and is established as a specialpurpose company, which is wholly owned by Mr. Luk Ka Luen, Tony. Mr. Luk Ka Luen, Tony is amerchant in the retail and design industry. To the best knowledge of our Company, Star List Limitedand Mr. Luk Ka Luen, Tony are Independent Third Parties.

Clear Trillion Limited

Clear Trillion Limited was incorporated in the BVI with limited liability and is established as aspecial purpose company, which is wholly owned by Mr. Mok Man Fung, Carter. Mr. Mok Man Fung,Carter is an experienced investor in financial investments. To the best knowledge of our Company,Clear Trillion Limited and Mr. Mok Man Fung, Carter are Independent Third Parties.

Pine Treasure Holdings Limited

Pine Treasure Holdings Limited was incorporated in the BVI with limited liability and isestablished as a special purpose company, which is wholly owned by a discretionary trust with Mr.Dominic Kwok and his certain family members as discretionary beneficiaries. Pine Treasure HoldingsLimited and its beneficial owners are Independent Third Parties.

Tranche 2 Pre-[REDACTED] Investor

CEKA Limited

CEKA Limited is a company wholly owned by Dr. Eddie Cheung, who is a specialist inpaediatrics, an Equity Partner Doctor. CEKA Limited and Dr. Eddie Cheung are Independent ThirdParties.


Dr. Ooi Gaik Cheng

Dr. Ooi Gaik Cheng is a specialist in radiology, a substantial shareholder of HKID (Lab) and aformer director of each of HKID Limited, HKID (Lab) and HKID (MRI). Dr. Ooi Gaik Cheng is aconnected person of our Company.


– 90 –


Ms. Tang Wan Yin

Ms. Tang Wan Yin is a registered radiographer (diagnostic), a substantial shareholder of HKID(Lab) and a former director of each of HKID Limited, HKID (Lab) and HKID (MRI). Ms. Tang WanYin is a connected person of our Company.

Mr. Lo Wai Keung, Peter

Mr. Lo Wai Keung, Peter is a practising solicitor of Hong Kong and a former shareholder of Pixelprior to the acquisition of Hong Kong Imaging detailed in this section. Mr. Lo Wai Keung, Peter is anIndependent Third Party.

Dr. Lau Chu Pak

Dr. Lau Chu Pak is a specialist in cardiology, a former substantial shareholder of Pegasus and aformer director of HKID Limited prior to the acquisition of Hong Kong Imaging detailed in this section.Dr. Lau Chu Pak is an Independent Third Party.

Dr. Liu Chi Leung

Dr. Liu Chi Leung is a specialist in general surgery, a former shareholder of Pegasus and a formerdirector of HKID Limited prior to the acquisition of Hong Kong Imaging detailed in this section. Dr.Liu Chi Leung is an Independent Third Party.


Hong Kong Clinical Oncology Limited

Hong Kong Clinical Oncology Limited is a company wholly owned by Dr. Stanley Yu, a specialistin oncology and an Equity Partner Doctor. Hong Kong Clinical Oncology Limited and Dr. Stanley Yuare Independent Third Parties.

Centre for Obesity, Diabetes and Endocrinology (CODE) Limited

Centre for Obesity, Diabetes and Endocrinology (CODE) Limited is a company wholly owned byDr. Michele Yuen, a specialist in endocrinology, diabetes and metabolism and an Equity Partner Doctor.Centre for Obesity, Diabetes and Endocrinology (CODE) Limited and Dr. Michele Yuen are IndependentThird Parties.

Tranche 5 Pre-[REDACTED] Investor

Unicorn Link Group Limited

Unicorn Link Group Limited (‘‘Unicorn Link’’) was incorporated in the BVI with limited liability.Unicorn Link Group Limited is established as a special purpose company and is a wholly-ownedsubsidiary of Xi Yue Cultural Industry Investment Fund L.P. (‘‘Xi Yue Fund L.P.’’), an exemptedlimited partnership incorporated in the Cayman Islands which is engaged in various investments. Thelimited partner of Xi Yue Fund L.P. is United Wealth Ventures Limited (a company incorporated in theBVI with limited liability) (‘‘United Wealth’’), which is in turn owned as to 51% and 49% by Mr. LiKai Sing (‘‘Mr. Li’’) and Glorious Maple Limited (‘‘Glorious Maple’’), respectively. Glorious Maple isowned as to 30% by Mr. Hong Ching Wei (‘‘Mr. Hong’’) and 70% by Rainbow Lead Ventures Limited(‘‘Rainbow Lead’’), which is wholly owned by Mr. Yeung Wan Yiu (‘‘Mr. Yeung’’). The generalpartner of Xi Yue Fund L.P. is Vital Vision Limited (a company incorporated in the Cayman Islandswith limited liability) (‘‘Vital Vision’’), which is responsible for the day to day management of Xi YueFund L.P. and its investment activities. Vital Vision is owned as to 55% and 45% by Red CarpetInvestments Limited (‘‘Red Carpet’’), a company wholly owned by Mr. Li, and Glorious Maple,respectively. Each of Mr. Li and Mr. Yeung is an experienced investor in various sectors.

To the best knowledge of our Company, Unicorn Link, Xi Yue Fund L.P., United Wealth, VitalVision, Glorious Maple, Rainbow Lead, Red Carpet, Mr. Li, Mr. Hong and Mr. Yeung are IndependentThird Parties.

Compliance with Interim Guidance and Guidance Letters

The Sole Sponsor confirms that the investments of the Pre-[REDACTED] Investors are incompliance with the Guidance Letter HKEx-GL29-12 issued by the Stock Exchange in January 2012 (asupdated in March 2017), the Guidance Letter HKEx-GL43-12 issued by the Stock Exchange in October2012 and as updated in July 2013 and March 2017, and the Guidance Letter HKEx-GL44-12 issued bythe Stock Exchange in October 2012 and as updated in March 2017.


– 91 –


CORPORATE AND SHAREHOLDING STRUCTURE

Upon completion of the Reorganisation and the Pre-[REDACTED] Investments, our Companybecame the holding company of our Group. The chart below sets out the corporate and shareholdingstructure of our Group immediately after the Reorganisation and the Pre-[REDACTED] Investments butprior to the [REDACTED] and the [REDACTED]:

42.42%

23.74%

10.74%

2.46%

6.54%

9.10%

5.00%

2.85%

2.85%

0.82%

0.82%

1.63%

1.63%

1.63%

1.63%

67.66%

100%

100

%

100

%

100%

100%

100%

100

%

95

%

100%

100

%

51%

51%

100

%

100

%

4.00%

1.44%

0.92%

0.47%

11.65%

100%

Ace A

lliance

(BV

I)

HK

MC

Med

ical

Pro

ducts

(HK

)

Med

ical Concierg

e

Hold

ing

(BV

I)

Hong K

ong M

edical

Consu

ltants

(HK

)

Cen

tralPharm

(HK

)

HK

MC

Den

tal

(HK

)

Cen

tral Health

care

Lim

ited

(HK

)

HK

Brain

Mem

ory

(HK

)

Med

ical Concierg

e

Lim

ited(1

0)

(BV

I)(B

VI)

HK

ID (L

ab)

(11

)

(HK

)

HK

ID (M

RI)

(12

)

(HK

)

HK

ID L

imited

(HK

)

Sm

art Win

ner

(Sey

chelles)

CM

H

(BV

I)

CH

G(1

)

(BV

I)

Peak Summit(1)

Heroic Wealth(1)

Mastermind

Intelligence(1)

Grateful Mind(1)

Property Linkage(1)

Wealth Basin(1)

Les Trois(1)

Wealth Splendour

Limited(2)

Dr. Boron Cheng(3)

Dr. Matthew Ng(3)

Dr. Lo Wai Kei(3)

Cambridge Oncology

Limited(4)

Dr. Kenneth Ng

Dr. Gordon Chau

Dr. Barbara Tam


Investor(6)


Investors(5)


Investors(7)


Investors(8)


Investor(9)

Our C

om

pan

y

(Cay

man

Islands)

Med

ical Concierg

e

Man

agem

ent


– 92 –


Notes:

(1) Pursuant to the Concert Party Deed, CHG, Dr. Kenneth Tsang, Peak Summit (a company wholly owned by Dr. KennethTsang), Dr. Adam Leung, Heroic Wealth (a company wholly owned by Dr. Adam Leung), Dr. Jason Fong, MastermindIntelligence (a company wholly owned by Dr. Jason Fong), Dr. Chu Leung Wing, Grateful Mind (a company wholly ownedby Dr. Chu Leung Wing), Dr. Jenny Tsang, Property Linkage (a company wholly owned by Dr. Jenny Tsang), Mr. Shiu,Wealth Basin (a company wholly owned by Mr. Shiu), Mrs. Chen and Les Trois (a company wholly owned by Mrs. Chen)are parties acting in concert.

(2) Wealth Splendour Limited is a company wholly owned by Dr. Clement Lee, an Equity Partner Doctor.

(3) Each of Dr. Boron Cheng, Dr. Matthew Ng and Dr. Lo Wai Kei is an Equity Partner Doctor.

(4) Cambridge Oncology Limited is a company owned as to 50% and 50% by Dr. Ada Ma, an ex-Equity Partner Doctor, andMs. Tong Duen Ming Catherine, the mother of Dr. Ada Ma, respectively.

(5) The breakdown of the shareholding interests held by the Tranche 1 Pre-[REDACTED] Investors in our Company was asfollows:

(i) Double Expert Limited: 2.33%;(ii) Joyous Rainbow Holdings Limited: 2.14%;(iii) Hong Kong Dashenlin Trade and Investment Limited: 1.86%;(iv) Asmex Investment Limited: 1.68%;(v) Goldstone Investment Capital Limited: 1.30%;(vi) Cheung Hing Holdings Limited: 0.93%;(vii) Star List Limited: 0.47%;(viii) Clear Trillion Limited: 0.47%; and(ix) Pine Treasure Holdings Limited: 0.47%.

(6) The shareholding interest held by the Tranche 2 Pre-[REDACTED] Investor, namely, CEKA Limited, a company whollyowned by Dr. Eddie Cheung, an Equity Partner Doctor, in our Company, is 0.47%.

(7) The breakdown of the shareholding interests held by the Tranche 3 Pre-[REDACTED] Investors in our Company is asfollows:

(i) Dr. Ooi Gaik Cheng: 0.39%;(ii) Ms. Tang Wan Yin: 0.19%;(iii) Mr. Lo Wai Keung Peter: 0.18%;(iv) Dr. Lau Chu Pak: 0.12%; and(v) Dr. Liu Chi Leung: 0.04%.

(8) The breakdown of the shareholding interests held by the Tranche 4 Pre-[REDACTED] Investors in our Company was asfollows:

(i) Hong Kong Clinical Oncology Limited, a company wholly owned by Dr. Stanley Yu, an Equity Partner Doctor:0.96%; and

(ii) Centre for Obesity, Diabetes and Endocrinology (CODE) Limited, a company wholly owned by Dr. Michele Yuen,an Equity Partner Doctor: 0.48%.

(9) The shareholding interest held by the Tranche 5 Pre-[REDACTED] Investor, namely, Unicorn Link Group Limited, in ourCompany is 4.00%.


(11) HKID (Lab) is held as to 51% by HKID Limited, 13% by Dr. Ooi Gaik Cheng, 10% by Ms. Tang Wan Yin, 10% by Mr.Teo Man Lung Peter, 8% by Ms. Wong Ching Ying Isobel, 5% by Mr. Fung Wing Tak and 3% by Dr. Kenneth Tsangjointly with Mrs. Tsang, respectively. Each of Dr. Ooi Gaik Cheng and Ms. Tang Wan Yin is a Pre-[REDACTED] Investor;Mrs. Tsang is the spouse of Dr. Kenneth Tsang; and each of Mr. Teo Man Lung Peter, Ms. Wong Ching Ying Isobel andMr. Fung Wing Tak is an Independent Third Party.

(12) HKID (MRI) was held as to 51% by HKID Limited, 8% by Ms. Wong Ching Ying Isobel, 8% by Eastern Summit EnterpriseLimited, 8% by Mr. Teo Man Lung Peter, 6% by Dr. Ooi Gaik Cheng, 5% by Mr. Fung Wing Tak, 5% by Hong KongOncology Centre Company Limited, 3% by Ms. Tang Wan Yin, 3% by Mr. Wong Chun Kuen and 3% by Dr. KennethTsang jointly with Mrs. Tsang, respectively. Each of Dr. Ooi Gaik Cheng and Ms. Tang Wan Yin is a Pre-[REDACTED]Investor; Mrs. Tsang is the spouse of Dr. Kenneth Tsang; and each of Mr. Fung Wing Tak, Ms. Wong Ching Ying Isobel,Mr. Teo Man Lung Peter, Mr. Wong Chun Kuen, Hong Kong Oncology Centre Company Limited and Eastern SummitEnterprise Limited is an Independent Third Party.


– 93 –


[REDACTED] AND [REDACTED]

The Company is authorised to issue up to [REDACTED] Shares with a par value of HK$0.00001each. Assuming the [REDACTED] becomes unconditional and all the [REDACTED] are issued,[REDACTED] Shares will be in issue and [REDACTED] Shares will remain unissued (assuming that the[REDACTED] is not exercised and taking no account of any Shares to be issued upon the exercise ofany share options that may be granted under the Share Option Scheme).

The chart below sets out the corporate and shareholding structure immediately after completion ofthe [REDACTED] and the [REDACTED] (assuming that the [REDACTED] is not exercised and takingno account of any Shares to be issued upon the exercise of any share options that may be granted underthe Share Option Scheme):

42.42%

23.74%

10.74%

2.46%

6.54%

9.10%

5.00%

100%

100

%

100

%

10

0%

1

00

%

95

%

100

%

100

%

51%

51%

100

%

100

%

100%

100

%

100

%

Med

ical Concierg

e

Hold

ing

(BV

I)

Hong K

ong M

edical

Consu

ltants

(HK

)

Cen

tralPh

arm

(HK

)

HK

MC

Den

tal

(HK

)

Cen

tral Health

care

Lim

ited

(HK

)

HK

Brain

Mem

ory

(HK

)

Med

ical Concierg

e

Lim

ited(1

0)

(BV

I)

Med

ical Concierg

e

Man

agem

ent

(BV

I)

HK

ID (L

ab)

(11

)

(HK

)

HK

ID (M

RI)

(12

)

(HK

)

HK

ID L

imited

(HK

)

Sm

art Win

ner

(Sey

chelles)

CM

H

(BV

I)

CH

GN

ote 1

(BV

I)

Wealth Basin(1)

Les Trois(1)

Dr. Matthew Ng(3)

Dr. Lo Wai Kei(5)

Cambridge Oncology

Limited(4)

Dr. Kenneth Ng

Dr. Gordon Chau

Dr. Barbara Tam


Investors(5)


Investors(7)


Investor(6)


Investors(8)


Investor(9)

Other Public Shareholders

Dr. Boron Cheng(3)

Our C

om

pan

y

(Cay

man

Islands)

Peak Summit(1)

Heroic Wealth(1)

Mastermind

Intelligence(1)

Grateful Mind(1)

Property Linkage(1)

Wealth Splendour

Limited(2)

100

%

100

%

Ace A

lliance

(BV

I)

HK

MC

Med

ical

Pro

du

cts

(HK

)

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%

[REDACTED]%


– 94 –


Notes:

(1) Pursuant to the Concert Party Deed, CHG, Dr. Kenneth Tsang, Peak Summit (a company wholly owned by Dr. KennethTsang), Dr. Adam Leung, Heroic Wealth (a company wholly owned by Dr. Adam Leung), Dr. Jason Fong, MastermindIntelligence (a company wholly owned by Dr. Jason Fong), Dr. Chu Leung Wing, Grateful Mind (a company wholly ownedby Dr. Chu Leung Wing), Dr. Jenny Tsang, Property Linkage (a company wholly owned by Dr. Jenny Tsang), Mr. Shiu,Wealth Basin (a company wholly owned by Mr. Shiu), Mrs. Chen and Les Trois (a company wholly owned by Mrs. Chen)are parties acting in concert.

(2) Wealth Splendour Limited is a company wholly owned by Dr. Clement Lee, an Equity Partner Doctor.

(3) Each of Dr. Clement Lee, Dr. Boron Cheng, Dr. Matthew Ng and Dr. Lo Wai Kei is an Equity Partner Doctor.

(4) Cambridge Oncology Limited is a company owned as to 50% and 50% by Dr. Ada Ma, an ex-Equity Partner Doctor, andMs. Tong Duen Ming Catherine, the mother of Dr. Ada Ma.

(5) The breakdown of the shareholding interests held by the Tranche 1 Pre-[REDACTED] Investors in our Company will be asfollows:

(i) Double Expert Limited: [REDACTED]%;(ii) Joyous Rainbow Holdings Limited: [REDACTED]%;(iii) Hong Kong Dashenlin Trade and Investment Limited: [REDACTED]%;(iv) Asmex Investment Limited: [REDACTED]%;(v) Goldstone Investment Capital Limited: [REDACTED]%;(vi) Cheung Hing Holdings Limited: [REDACTED]%;(vii) Star List Limited: [REDACTED]%;(viii) Clear Trillion Limited: [REDACTED]%; and(ix) Pine Treasure Holdings Limited: [REDACTED]%.

(6) The shareholding interest held by the Tranche 2 Pre-[REDACTED] Investor, namely, CEKA Limited, a company whollyowned by Dr. Eddie Cheung, an Equity Partner Doctor, in our Company, is [REDACTED]%.

(7) The breakdown of the shareholding interests held by the Tranche 3 Pre-[REDACTED] Investors in our Company is asfollows:

(i) Dr. Ooi Gaik Cheng: [REDACTED]%;(ii) Ms. Tang Wan Yin: [REDACTED]%;(iii) Mr. Lo Wai Keung Peter: [REDACTED]%;(iv) Dr. Lau Chu Pak: [REDACTED]%; and(v) Dr. Liu Chi Leung: [REDACTED]%.

(8) The breakdown of the shareholding interests held by the Tranche 4 Pre-[REDACTED] Investors in our Company will be asfollows:

(i) Hong Kong Clinical Oncology Limited, a company wholly owned by Dr. Stanley Yu, an Equity Partner Doctor:[REDACTED]%; and

(ii) Centre for Obesity, Diabetes and Endocrinology (CODE) Limited, a company wholly owned by Dr. Michele Yuen,an Equity Partner Doctor: [REDACTED]%.

(9) The shareholding interest held by the Tranche 5 Pre-[REDACTED] Investor, namely, Unicorn Link Group Limited, in ourCompany is [REDACTED]%.


(11) HKID (Lab) is held as to 51% by HKID Limited, 13% by Dr. Ooi Gaik Cheng, 10% by Ms. Tang Wan Yin, 10% by Mr.Teo Man Lung Peter, 8% by Ms. Wong Ching Ying Isobel, 5% by Mr. Fung Wing Tak and 3% by Dr. Kenneth Tsangjointly with Mrs. Tsang, respectively. Each of Dr. Ooi Gaik Cheng and Ms. Tang Wan Yin is a Pre-[REDACTED] Investor;Mrs. Tsang is the spouse of Dr. Kenneth Tsang; and each of Mr. Teo Man Lung Peter, Ms. Wong Ching Ying Isobel andMr. Fung Wing Tak is an Independent Third Party.

(12) HKID (MRI) was held as to 51% by HKID Limited, 8% by Ms. Wong Ching Ying Isobel, 8% by Eastern Summit EnterpriseLimited, 8% by Mr. Teo Man Lung Peter, 6% by Dr. Ooi Gaik Cheng, 5% by Mr. Fung Wing Tak, 5% by Hong KongOncology Centre Company Limited, 3% by Ms. Tang Wan Yin, 3% by Mr. Wong Chun Kuen and 3% by Dr. KennethTsang jointly with Mrs. Tsang, respectively. Each of Dr. Ooi Gaik Cheng and Ms. Tang Wan Yin is a Pre-[REDACTED]Investor; Mrs. Tsang is the spouse of Dr. Kenneth Tsang; and each of Mr. Fung Wing Tak, Ms. Wong Ching Ying Isobel,Mr. Teo Man Lung Peter, Mr. Wong Chun Kuen, Hong Kong Oncology Centre Company Limited and Eastern SummitEnterprise Limited is an Independent Third Party.


– 95 –


OVERVIEW

We are an integrated private medical services provider in Hong Kong with specialist doctors

renowned in their respective fields of expertise, complemented by various allied health services and

medical management services. According to Frost & Sullivan, we ranked sixth as a multi-specialties

medical centre operator in Hong Kong with a market share of approximately 1.4%, and ranked fourth in

terms of total revenue generated from provision of internal medicine specialty services, amongst all

private multi-specialties medical centre operators in Hong Kong in 2020. We also offer allied health

services such as clinical psychology, speech therapy, nutritional therapy, psychological counselling, and

imaging and diagnostic services in order to provide holistic care to our clients.

We endeavour to provide high quality clinical service by applying advanced technology, adopting

internationally accredited clinical protocols and offering patient-centred support to improve the health

and well-being of our clients. Our business can be traced back to 2013 when our Founding Doctor, Dr.

Kenneth Tsang, a renowned respiratory medicine specialist, established our subsidiary, Hong Kong

Medical Consultants. In order to meet the increasing demand for high quality and efficient healthcare

services, we developed a multi-disciplinary medical services model through our network of specialist

doctors and allied health professionals from different specialties. As our business expanded, we

developed rapidly in terms of the number of specialty services. We provide these specialty services and

certain allied health services under the brand of ‘‘Hong Kong Medical Consultants’’, and logo .

In October 2019, we acquired Hong Kong Imaging and Diagnostic Centre Ltd (‘‘Hong KongImaging’’), which has two imaging and diagnoses centres and one laboratory located in Central in order

to supplement our medical services. Hong Kong Imaging operates under our sub-brand ‘‘Hong Kong

Imaging and Diagnostic Centre’’, and logo ; and provides X-ray, CT-Scan, MRI, ultrasound

and other diagnostic and laboratory services.

As at the Latest Practicable Date, we operated three medical centres (the ‘‘Medical Centres’’),which comprise of our Integrated Flagship Medical Centre, HKMC II and a psychiatric centre under our

brand ‘‘Hong Kong Medical Consultants’’; and we operated two imaging and diagnoses centres and one

laboratory under our sub-brand ‘‘Hong Kong Imaging and Diagnostic Centre’’ (together, the

‘‘Diagnostic Centres’’), all of which are located in Central, Hong Kong. Our clients mainly include

individuals seeking high quality medical treatment from our well regarded specialists.

We are committed to delivering efficient and exemplary medical services across specialties and

disciplines. Our medical services business operates under two main service streams:

1. Specialist medical services: we provide a wide range of specialty services including

cardiology, respiratory medicine, gastroenterology & hepatology, nephrology, neurology,

psychiatry, endocrinology, diabetes & metabolism, geriatric medicine, oncology, paediatrics,

rheumatology, dental surgery, family medicine and clinical microbiology and infection at our

Medical Centres as well as inpatient services at private hospitals in Hong Kong; and

2. Allied health services: we provide various allied health services including clinical

psychology, speech therapy, nutritional therapy and psychological counselling at our Medical

Centres as well as imaging, diagnostic and laboratory services at our Diagnostic Centres. We

also provide vaccination services at our Medical Centres and CVC Centres.

BUSINESS

– 96 –


To a much lesser extent, we provide medical management services to certain medical practitioners

in relation to administrative and operational functions such as clinic management, accounting and

finance, human resources, central procurement of pharmaceuticals and clinical supplies, facilities and

lease management, regulatory compliance, marketing and business development, medical record

management and information technology systems. By offering medical management services to selected

medical practitioners, we are able to extend and build relationships, and enhance our ability to attract

and recruit specialist doctors that we believe would be able to complement our business.

As at the Latest Practicable Date, our medical team consisted of 17 specialist doctors that work for

us on an exclusive basis, who have a significant amount of experience with an average of approximately

18 years of specialist qualification. In particular, our five Founding Doctors are senior specialists that

have on average approximately 25 years of specialist qualification covering respiratory medicine,

cardiology, neurology, psychiatry and geriatric medicine, and all of them had attained professor or

consultant ranks at hospitals in Hong Kong. In addition, the majority of our specialist doctors are

honorary associate professors at universities in Hong Kong with publications made in medical journals,

and approximately half of our specialist doctors are chairman or chairlady of a medical professional

body in Hong Kong.

The 17 specialist doctors that work for us on an exclusive basis cover 14 medical specialties and

we also have 13 Panel Specialists that work for us on a non-exclusive basis, covering 11 specialties. For

details, please refer to ‘‘— Our Professional Team’’. In addition, we provide ophthalmology services

under our brand through our management services arrangement with three ophthalmologists operating at

the HKMC Ophthalmology Centre. During the Track Record Period, we recorded revenues of HK$195.7

million, HK$248.4 million, HK$251.4 million and HK$166.0 million for the years ended 31 March

2019, 2020 and 2021 and for six months ended 30 September 2021, respectively.

The following table sets out the breakdown of our revenue by business segment for the periods

indicated:

Year ended 31 March Six months ended 30 September

2019 2020 2021 2020 2021


Medical Services:— Specialist medical services 192,273 98.3 232,427 93.6 218,006 86.7 106,398 87.7 127,838 77.0— Allied health services 12 0.0 13,137 5.3 36,483 14.5 16,246 13.4 42,120 25.3


revenue — — (1,768) (0.7) (7,586) (3.0) (3,647) (3.0) (6,223) (3.7)


Medical Management Services 3,375 1.7 4,598 1.8 4,531 1.8 2,266 1.9 2,265 1.4

Total 195,660 100.0 248,394 100.0 251,434 100.0 121,263 100.0 166,000 100.0

BUSINESS

– 97 –


OUR COMPETITIVE STRENGTHS

We believe that our success is mainly attributable to the following competitive strengths:

We are one of the leading multi-specialties medical centre operators in Hong Kong and we are ableto attract and retain highly skilled medical practitioners leveraging on our strong brand name andmedical platform

According to Frost & Sullivan, we ranked sixth in terms of revenue generated from provision of

specialty services (including internal medicine and surgery related specialty services), with a market

share of approximately 1.4%, and ranked fourth in terms of total revenue generated from provision of

internal medicine specialty services, amongst all private multi-specialties medical centre operators in

Hong Kong in 2020. We attribute this success to our strong brand and group of talented specialist

doctors. In addition, we have an experienced team of allied healthcare professionals contributing to

improvement of clinical care, which leads to positive patient referrals and facilitates the recruitment of

qualified and talented medical practitioners, making us a leading competitor in Hong Kong. As at the

Latest Practicable Date, we operated three Medical Centres and three Diagnostic Centres, all of which

are located in Central, the core central business district in Hong Kong. Our clients mainly include


As at the Latest Practicable Date, our medical team included 17 specialist doctors that have a

significant amount of experience, with an average of approximately 18 years of specialist qualification;

and our five Founding Doctor are senior specialists that have on average approximately 25 years of

specialist qualification. Leveraging on our strong brand name and scale of operations, we have attracted

and expect to continue to attract highly-skilled doctors to join our professional team because our

platform is able to provide competitive compensation and a supportive working environment, which is

conducive to professional growth. Our medical network provides a platform for our professional team to

develop their respective specialised fields since we have minimised their administrative time through our

established infrastructure and centralised administrative and operational support. In addition, our medical

platform, with multi-specialties medical services and a patient-centric culture, enables our professional

team to have access to and to retain a large pool of clients.

We believe that having strong brand name with quality services is crucial to our business in order

to attract and retain talent. It is therefore essential to cultivate and foster a culture of knowledge sharing

among the professionals that encourage discussion and sharing of expertise and experience in order to

enhance our service quality and brand name. Our doctors closely collaborate with local universities and

professional bodies to obtain up-to-date information and to keep themselves up to international

standards. In addition, we hold knowledge sharing sessions among our specialists to share up-to-date

information on medical advances periodically. We also encourage our healthcare professional team and

staff to attend internal and external training programmes. Through these learning sessions and external

seminars, our healthcare professional team can keep abreast of the latest developments in various

specialties, which in turn enables us to retain and maintain highly skilled medical practitioners.

Our multi-disciplinary specialist medical services enhance our brand and generate significantbusiness synergy

We believe our platform of specialist medical services enhances our brand awareness and generates

significant business synergy across our different business lines and enables us to expand our clientele to

address their different medical needs.

BUSINESS

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Our medical services mainly consists of (i) specialist medical services covering 14 specialties and(ii) allied health services covering four specialties, including clinical psychology, speech therapy,nutritional therapy, psychological counselling, and imaging and diagnostic services and vaccinationservices. Leveraging our wide scope of specialties and services provided as well as our quality brand,many of our clients directly seek our services in relation to their specific health problems, while externalgeneral practice and specialist doctors also refer their clients to us, in order to receive more targeteddiagnosis and treatment of disease by our experienced specialists. Our multi-disciplinary practice alsoallows our specialist doctors to cross-refer clients to each other and to other allied services in order toprovide seamless and comprehensive treatment for our patients. By fostering long-term relationship withour clients, we have a more comprehensive understanding of the medical history of our clients, which inturn enables us to provide more precise and personalised treatments for their particular needs.

In addition, through our knowledge sharing and internal communications among our medicalpractitioners and allied health professionals, each of our service streams creates synergies, which arebeneficial to our overall operations and provision of holistic and quality healthcare for our clients. Weare able to provide client-centred and personalised healthcare services to our clients and they can enjoythe convenience of receiving various healthcare services from a single service provider. We believe ourfocus on providing a medical platform with renowned and experienced specialist doctors and our abilityin providing high quality and integrated medical services allows us to increase our brand awareness andto attract and retain clients from all walks of life.

Our medical platform is under centralised management with standardised operation proceduresand stringent quality control

Through having a team of experienced specialist doctors in one platform and under centralisedmanagement and administrative operations, we are able to achieve economies of scale and benefit fromsignificant costs savings while maintaining a high-level of quality control. Our doctors can also focus onproviding quality healthcare services to our client, which is the core of our business.

Unlike solo medical practitioners and small private medical practices, our medical platform has ascale of operation that allows us to provide a full spectrum of administrative and operational assistanceto our medical practitioners, including but not limited to clinic management, accounting and finance,human resources, central procurement of pharmaceuticals and clinical supplies, facilities and leasemanagement, regulatory compliance, marketing and business development, medical record managementand information technology systems for maintaining patient and financial records. The sharing ofresources allows us not only to enjoy significant cost savings, but also frees our doctors and alliedhealth professionals to focus on providing quality healthcare to patients and facilitate their provision ofservices. In addition, we enjoy economies of scale through centralising all these administrative andoperational functions and we are able to optimise our costs through various means such as (i)negotiating better lease terms for our Medical Centres, Diagnostic Centres and office space; (ii) betterutilisation of spaces in our Medical Centres by sharing examination rooms and pharmacy; (iii) regularbulk purchase of pharmaceutical and clinical supplies with better pricing and credit terms; and (iv)through engaging and sharing medical support personnel such as nurses, pharmacists and receptionists,we are able to provide better on-the-job training while reducing the risk and costs associated withinsufficient medical and clinic support due to the regular turnover of employees.

Under our centralised management, our senior management promotes a corporate culture withstandard operating procedures and policies to provide consistent and quality services to our patients. Wehave adopted various management practices and implemented more than 70 standard operationprocedures at our Medical Centres and Diagnostic Centres. We have also established a computer

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infrastructure with various information technology systems, which are implemented at our MedicalCentres and Diagnostic Centres to ensure compatibility amongst others, to safeguard our patients’medical records and to allow timely access to such information. Moreover, we have our own pharmacistsand quality control team so that we are able to properly administer pharmaceuticals and ensure thecorrect use and dosage of pharmaceuticals and other clinical supplies, thus enhancing our servicequality. Further, our senior management holds regular meetings with our healthcare professional teamand staff to discuss the development and implementation of various quality control measures to enhancethe quality of our healthcare services. By adhering to our standard operation procedures and stringentquality control, we are able to better ensure the quality of the services provided to our clients. Forfurther details of our quality control system, please see the section headed ‘‘— Quality Control andComplaint Handling’’ below.

We have a doctor-led management team and our healthcare professional team comprisesexperienced specialist doctors, nurses and allied health professionals

Our Group is run by a doctor-led management team with extensive management experience. Westrive to continuously improve our clinical care and client experience with a commitment to provideeffective treatment and excellent care, which we believe are vital to our long-term success.

Our senior management team includes Dr. Kenneth Tsang, Dr. Adam Leung, Mr. Shiu along withour Chief Operating Officer, director of operations, director of marketing & business development anddirector of finance, who have abundant operational and financial management experience. We also haveestablished a medical committee (‘‘Medical Committee’’) which is led by Dr. Adam Leung, andincludes selected senior doctors and the director of operations that is responsible for establishing andimplementing internal policies as well as reviewing medical complaints to ensure client satisfaction.Please see the section headed ‘‘— Quality Control and Complaint Handling’’ below for further details.In addition, most of our doctors are either Founding Doctors or Equity Partner Doctors with a smallequity stake in our Group. Although many of these doctors are passive shareholders that do not manageour day-to-day business, they do provide invaluable input or suggestions as to how to improve ourbusiness operations as experienced medical practitioners and are highly motivated in ensuring thesuccess of our business. For further details of our shareholding structure, please see the section headed‘‘History, Reorganisation and Corporate Structure’’.

We believe that our team of specialists, nurses and allied health professionals is key to our successin gaining market share and maintaining our market position. We have a team of medical professionalsthat share our values and culture, which is imperative for the continuous improvement of clinical careand enhancement of our clients’ experience. All of our specialist doctors have obtained theiraccreditation as specialists in their discipline with significant professional experience. In addition toproviding medical services to our clients, they are able to provide guidance and second opinions to ourhealthcare professional team for complicated conditions at our Medical Centres. In addition, the majorityof our specialist doctors are honorary associate professors at universities in Hong Kong withpublications made in medical journals and approximately half of our specialist doctors are chairmen orchairladies of a medical professional body in Hong Kong.

As at the Latest Practicable Date, our medical team is supported by our allied health service teamcomprising of non-doctor panel specialists and staff of Hong Kong Imaging along with a team ofpharmacists, registered nurses and medical assistants. Our pharmacists and senior nurses are registeredprofessionals with extensive experience in their relevant fields. We believe that our healthcare

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professional team’s profile, experience and reputation has built up our brand name and network withboth upstream and downstream industry players, which facilitates our attraction and retention ofqualified medical practitioners in the industry. Our experienced and reputable healthcare professionalteam has built up our clients’ confidence in our medical platform throughout the years which helpsconsolidate and expand our clientele from all walks of life.

We believe that our doctor-led management team with a focus on upholding the safety and qualityof our client-care has been instrumental to our growth and success and that our business will continue tothrive under the leadership of our Directors and senior management team.

OPPORTUNITIES AND STRATEGIES

We strive to continue to become one of the best specialist medical service providers in Hong Kongand we plan to take advantage of the following opportunities and implement the following strategies:

Expand our medical team to provide a wider span of specialist medical services

Due to the growing demand for specialist medical services, we believe that by expanding our teamof specialist doctors and the addition of new specialist services, we will be able to provide a greaterspectrum of services and care to our clients.

The need for private specialist medical service providers, like us, continues to increase. Theburdens placed on Hong Kong’s public healthcare system remain very high due to limited capacity,insufficient funding, the shortage of skilled doctors and their inability to retain specialists, all of whichhave led to an increasing demand for private specialist medical services. The over-reliance on publichealthcare services has resulted in long wait times for medical services in the public sector; for example,the average wait time for non-emergency cases for internal medicine ranged from 104 weeks to 157weeks between 1 July 2019 and 30 June 2020, according to the Frost & Sullivan Report.

In addition, Hong Kong’s ageing population continues to drive the demand for different types ofspecialty services, and the increasing public awareness of health maintenance has resulted in Hong Kongresidents willing to spend more on private healthcare services, which is considered to be in betterquality compared to Hong Kong’s public medical system. Indeed, Hong Kong residents haveincreasingly purchased private medical insurance in order to obtain private healthcare services andinsurance companies have expanded the coverage of their packages to include more specialist medicalservices. According to the Frost & Sullivan Report, the number of individuals in Hong Kong entitled toemployer or corporate medical benefits increased from 3.3 million in 2015 to 3.5 million in 2019, andthe number of individuals having purchased private medical insurance increased from 2.2 million in2015 to 2.5 million in 2019 driven by growing health consciousness and availability of medicalinsurance products. The Hong Kong government has also launched the Voluntary Health InsuranceScheme in April 2020, offering tax incentives for individuals to purchase insurance products, andaccordingly, the gross premium of accident and health insurance in Hong Kong is projected to rise at aCAGR of 7.9% from HK$18.6 billion in 2021 to HK$25.2 billion in 2025, according to the Frost &Sullivan Report.

Further, tourists from Mainland China have also been increasingly seeking professional healthcareand medical consultation in Hong Kong, particularly for specialty services such as dermatology,oncology, cardiology and dental services creating growth potential for specialist medical serviceproviders like us. According to Frost & Sullivan, it is estimated that revenue from private specialistservice providers will increase at a CAGR of 5.0% from HK$17.0 billion in 2021 to HK$20.7 billion in2025.

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In response to the heightening demand for private specialty services, we aim to further develop our

specialist medical services to capture anticipated business growth. In the near term, we plan to continue

to expand our operations, especially for oncology and specialist areas that have strong demand but we

currently do not cover such as dermatology and dental services. We believe through our strong brand,

reputation and existing client base, we can extend our medical services to meet Hong Kong’s various

medical needs. Accordingly, we intend to use part of our [REDACTED] from the [REDACTED] to

establish:

. A new oncology centre under our brand (‘‘HKMC Oncology Centre’’) and hire a couple of

oncologists as employee doctors along with necessary healthcare support staff, and enter into

a new lease agreement for office space with GFA of approximately 5,000 sq.ft. in Central,

Hong Kong to establish the HKMC Oncology Centre. We currently have one full-time

oncologist, (Dr. Stanley Yu) and we plan to expand our oncology services through the

addition of a couple of oncologists and the establishment of the HKMC Oncology Centre. We

believe creating the HKMC Oncology Centre will lead to our further growth because there is

strong demand for such services. According to the Frost & Sullivan Report, cancer is one of

the major non-communicable diseases in Hong Kong with a trend of rising incidence at an

average rate of approximately 2.9% per annum in the past decade. Based on estimates from

the Hong Kong Cancer Registry, the number of new cancer cases in Hong Kong is projected

to increase from approximately 33,000 in 2018 to more than 42,000 by 2030 with reference

to the prevailing trends in incidence of cancers and population structure. Going forward,

driven by the factors such as (i) increasing population base, (ii) an ageing population and (iii)

recovery of medical tourism that encourages visitors from mainland China to seek cancer

treatment in Hong Kong due to the availability of treatments and medicines not readily

available in the PRC, the market demand for private specialist medical services for cancer in

Hong Kong is expected to increase in future.

. A new dental centre under our brand (‘‘HKMC Dental Centre’’) and hire a couple of

dentists as employee doctors along with necessary healthcare support staff, and enter into a

new lease agreement for office space with GFA of approximately 1,500 sq.ft. in Central,

Hong Kong to establish the HKMC Dental Centre. We believe creating the HKMC Dental

Centre will lead to our further growth because there is strong demand for dental services,

including for beauty and aesthetic purposes. According to the Frost & Sullivan Report, the

market demand for dental services in Hong Kong has been growing along with (i) the

increasing awareness towards the importance of dental care, (ii) an ageing population and

(iii) an increasing demand for orthodontic services, a sub-specialty of dentistry that involves

diagnosis, prevention and correction of mal-positioned teeth and jaws. In particular, demand

for orthodontic services for beauty and aesthetic purposes such as teeth alignment have been

on the rise for younger individuals. Visitors from Mainland China seeking orthodontic

services in Hong Kong is also expected to increase in the future.

. A new dermatology centre under our brand (‘‘HKMC SKIN Centre’’) and hire a couple of

dermatologists as employee doctors along with necessary healthcare support staff, and enter

into a new lease agreement for office space with GFA of approximately 1,500 sq.ft. in

Central, Hong Kong to establish the HKMC SKIN Centre. We believe creating the HKMC

SKIN Centre will lead to our further growth because there is strong demand for dermatology

services for both medical and aesthetic purposes. According to the Frost & Sullivan Report,

the market demand for dermatological services in Hong Kong is likely to increase in future.

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Skin diseases, such as eczema or dermatitis, are common in Hong Kong due to the humid

weather and stressful lifestyle of residents. According to the Hong Kong Allergy Association,

one in five people in Hong Kong suffers from eczema. In addition, similar to other medical

specialties, demand for dermatologist remains high with limited capacity in Hong Kong.

According to the Department of Health, although there were over 300,000 patients seeking

treatment from the public sector, the majority of current market demand needs to be

addressed by the private sector. Apart from treatment of skin diseases, aesthetic dermatology,

which also involve treatments or procedures to improve the skin appearance of patients is in

high demand. According to the Frost & Sullivan Report, the market size of medical aesthetic

services by revenue in Hong Kong grew from approximately HK$4.2 billion in 2015 to

approximately HK$7.1 billion in 2020, representing a CAGR of approximately 11.1%. As a

result, the market demand for dermatological services, especially medical aesthetic services,

in Hong Kong is expected to continue to increase in the future.

For details, please see the section headed ‘‘Future Plans and [REDACTED]’’.

We believe that the new oncologists, dentists and dermatologists that join our Group will be able

to benefit from our brand and referral of services from our existing doctors. In addition to the strong

market demand for such services as mentioned above, we are expanding our collaboration with different

insurance companies as their designated medical provider to provide a wide spectrum of specialists

medical and diagnostic services. This will help to introduce new patients to the Group and provide us

with a stable and sustainable source of income. Recently, we started developing this business line and

have come to an agreement with certain large insurance companies to provide services to its members.

These agreements generally provide that the insurance company will employ the medical services

(including in-patient and out-patient clinical services) of the Group as part of their network of medical

providers at agreed upon fees for differing types of medical services provided to the insurance

company’s eligible members. Moreover, with our medical concierge services, we plan to provide health

check services to customers in Hong Kong and China as well as to individual medical tourists. Please

see the section headed ‘‘— Expand our allied health services network and develop complementary

services’’ below for further information on our medical concierge services. These initiatives are expected

to open up new customer channels for our expansion, including for our new dermatology and dental

services.

Recruit talented medical practitioners by taking advantage of the trend towards consolidation ofsmaller medical practices in Hong Kong

With high rental costs, greater difficulty in hiring and maintaining support staff, along with

increasing regulatory compliance, we believe that operating costs for small medical practices in Hong

Kong will increase, which may weaken their competitiveness and threaten their viability in the future.

According to the Frost & Sullivan Report, small medical practices may find it difficult to cope with

increased administrative costs under the Private Healthcare Facilities Ordinance (the ‘‘PHFO’’) and to

recruit experienced and qualified personnel in order to remain competitive in the future. In November

2018, the PHFO was enacted in Hong Kong, which provides for a new regulatory regime for private

healthcare facilities, including hospitals, day procedure centres, clinics and health service

establishments. The PHFO requires private healthcare facilities to (except qualified small practice

clinics as defined under the PHFO), amongst other things, (i) appoint a chief medical executive, (ii)

comply with requirements under the PHFO, including codes of practice with respect to standards and

specifications of private healthcare facilities in relation to equipment, fittings and furnishings, the

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management and staffing arrangements, and the quality of care for and safety of patients and any other

matters for protecting the health and interests of individuals receiving healthcare services in private

healthcare facilities, (iii) put in place a complaints management system and (iv) adopt price transparency

measures. The licensing requirements for day procedure centres under the PHFO came into effect in

January 2021; and while the requirements for clinics is currently yet to be determined, draft standards

have already been issued by the Hong Kong Director of Health since January 2018. For further details,

please see the section headed ‘‘Regulatory Overview — Overview of Hong Kong Laws and Regulations

— PHFO’’. While we anticipate the PHFO will place a heavy burden on smaller sized medical practices,

we plan to seize this industry opportunity to recruit talented medical practitioners from these smaller

practices and to further increase our scale and grow our business. We intend to be in touch with these

talented medical practitioners through our network on a case by case basis. We plan to be opportunistic

in recruiting medical practitioners that are able to complement our existing medical services or broaden

the type of specialised medical services that we provide.

Expand the Integrated Flagship Medical Centre and reduce reliance and risks associated with therental of properties by opening the Integrated Diagnostic Centre

As at the Latest Practicable Date, we operated three medical centres in Hong Kong. In order to

support our continuous growth including our expansion of our medical professional team as above

mentioned, we intend to use part of our [REDACTED] from the [REDACTED] to expand the Integrated

Flagship Medical Centre by July 2022. For further information, please see ‘‘Future Plans and

[REDACTED]’’.

The rental cost for premium office space in central locations remains very high in Hong Kong.

While we plan to continue to lease a certain amount of properties in the core locations that we operate,

we acquired a property in Central, Hong Kong on 31 March 2021 to provide us the flexibility to

reorganise and move around certain of our operations when necessary, and to reduce the risk of

relocation should we fail to renew the leases with the landlord and/or the risk of exorbitant increases in

rental price. In particular, certain of our existing Diagnostic Centres hold very heavy and high-value

medical equipment (such as our MRI machine and CT Scan machine) that would be costly and difficult

for us to relocate, and we believe acquiring offices for the Integrated Diagnostic Centre will help

alleviate the risk of business disruption in the longer term. As such, we intend to use part of our

[REDACTED] from the [REDACTED] for the establishment of the Integrated Diagnostic Centre,

including funding (i) the repayment of the mortgage loan relating to the Property Purchase (as defined

below); (ii) its renovation costs; (iii) the purchase of new equipment; and (iv) the hiring of a few doctors

and necessary support staff to operate this new centre. We plan to obtain the necessary day procedure

centre licence and move most of the Imaging & Cardiovascular Centre and the entire MRI Centre to the

newly acquired property. We will retain part of the existing offices at the Imaging and Cardiovascular

Centre on the 5th Floor Central Building where our CT Scan machine is located because we plan to

move the CT Scan machine to the Integrated Diagnostic Centre after renovation is complete, which is

expected to be around July 2022 and the lease for this office on 5th Floor Central Building expires in

December 2022. After we move the CT Scan machine to the Integrated Diagnostic Centre, we plan to

continue to use this office for obtaining specimen for testing purposes until the lease expires in

December 2022. While we intend to keep our main operations in our Integrated Flagship Medical

Centre, we plan to refer our patients to the Integrated Diagnostic Centre for follow up health checks and

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establish our wholesale pharmacy there. We believe the purchase of this property will enable us to better

allocate our resources and lower our cost of operations in the long term. For details, please see the

section headed ‘‘Future Plans and [REDACTED]’’.

On 31 March 2021, we purchased the entire 6th floor of Euro Trade Centre, Central, Hong Kong

with GFA of approximately 5,200 sq.ft. at a purchase price of HK$150.0 million (the ‘‘PropertyPurchase’’), which will be used as our Integrated Diagnostic Centre. We conducted an analysis to

determine whether the Property Purchase would be in the best interest of the Group and its shareholders.

According to the statistics from 2000 to 2020 published by the Rating and Valuation Department

of the HKSAR Government, the market rentals of Grades A and B offices(1) in the Central district have

increased by around 205.3% and 181.5%, respectively, over the last twenty years, which are equivalent

to a CAGR of approximately 5.7% and 5.3%, respectively. Over the same period, the market prices of

Grades A and B offices have increased by approximately 361.7% and 394.2%, respectively, which are

equivalent to a CAGR of approximately 8.0% and 8.3%, respectively. The Group studied 10 office

buildings in Central, and found seven of them are held by single owners which are not available for

sale. In addition, only six buildings have direct access to the upper floors from street level. There are

only limited options of commercial premises available to a medical practice. Moreover, the estimated

weight (the machine itself with the shielding) for the CT Scan machine and MRI machine are 9 tonnes

and 10 tonnes, respectively, and the installation of the machine requires special procedures (i.e. the

assembled machine are lifted by a crane from the street level to the building floor and temporary

removal of external wall and windows are required). According to our past experience on finding

suitable premise to house the CT Scan machine and MRI machine, there are only a limited number of

commercial buildings in the Central district that can fulfil the location and structural criteria.

In Hong Kong, the normal commercial lease is three years of a fixed term plus three years of

flexible term. During the flexible term, the rental would be subject to the prevailing market rental

adjustment and either the lessor or lessee can terminate the lease after the three years’ fixed term by

serving one month to six months of notice in lieu of the termination of the lease by each other subject to

the conditions of the lease. In view of the substantial capital expenditure invested by a medical practice,

the market norm of the Hong Kong lease term is not favourable for a medical practice to pursue a stable

and sustainable business. In addition, most of the office buildings are wholly-owned by a single owner

and a medical practice is not the most preferable tenant for the owners amid of the hygienic risk bought

to the building, especially after the Covid-19 pandemic. Hence, the acquisition of a self-owned premise

helps with the sustainability of a medical practice.

There are around 410 commercial building in Central and Sheung Wan district, and only 29% of

those buildings are able to provide a single floor up to 5,000 sq.ft. In addition, as a medical services

provider, the premise requirements are different from an ordinary office tenants; and the following

considerations are key to our patients:

1. whether the building is accessible for wheelchairs;

2. the walking distance from the drop off point;

3. public transport accessibility;

4. the escalators and lifts management for patients (cannot be too fast due to the slow

movement of the patients); and

5. hygiene condition of the building and its surrounding environments.

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Based on the above reasons, we concluded the requirements of a medical services provider like us

are different compared to the normal office user, and finding a stable premise for a medical services

provider may be difficult under a normal rental arrangement. After evaluating the risks, costs and

benefits of the above, we determined that the Property Purchase not only provides a stable location for

operation of our Integrated Diagnostic Centre, but the rental cost savings and expected price stability in

the long-term are beneficial for the Group and its shareholders.

Note:

(1) Grade A — modern with high quality finishes; flexible layout; large floor plates; spacious, well-decorated lobbies andcirculation areas; effective central air-conditioning; good lift services zoned for passengers and goods deliveries;

professional management; parking facilities normally available.

Grade B — ordinary design with good quality finishes; flexible layout; average-sized floor plates; adequate lobbies; central

or free-standing air-conditioning; adequate lift services, good management; parking facilities not essential.

Expand our allied health services network and develop complementary services

We endeavour to provide comprehensive healthcare services to our clients. As such, while we are

expanding our medical professional team and establishing our Integrated Flagship Medical Centre, we

also strive to further develop our allied health services and expand our business to cover other

complementary services. With our registered whole-sale pharmacy licence obtained in July 2020, we

plan to establish a wholesale pharmacy at our Integrated Diagnostic Centre where we can store and

distribute medicine to our Medical Centres as well as to other third-party private medical practitioners

on a wholesale basis. Only licensed medical practitioners (i.e. doctors) can legally prescribe prescription

medicine to patients in Hong Kong. The wholesale pharmacy is expected to take up no more than 300

sq.ft. and to have an on-site staff to manage the inventory. Please see the section headed ‘‘— Inventory

Control’’ for controls we have to prevent over-prescription by doctors.

We also intend to establish a health check centre within our Integrated Diagnostic Centre to

accommodate our upcoming health check programmes under our medical concierge services. According

to Frost & Sullivan Report, the market size of health check services in Hong Kong is expected to

increase at a CAGR of approximately 6% between 2021 to 2025, driven by increased domestic demand

due to an ageing population and greater insurance coverage and medical tourists from Mainland China.

Our medical concierge services will be a value-added service targeting medical tourist customers from

all around the world. According to the Frost & Sullivan Report, Hong Kong has been an established

destination for medical tourism, which is primarily attributable to (i) high-quality medical services and

modern procedures, (ii) well-trained multilingual medical professionals, (iii) top class medical

infrastructure, (iv) exceptional geographic location with close proximity to Mainland China and other

major cities in Asia, and (v) well established infrastructure and attractions for tourism. Specifically,

Hong Kong has been one of the leading destinations for cancer treatment and medical check-ups in

Asia; and the demand for high-quality medical services by reputable specialists is expected to continue

to increase after the COVID-19 pandemic subsides. According to the Frost & Sullivan Report, the

number of medical tourists from Mainland China coming to Hong Kong is expected to increase at a

CAGR of approximately 92.6% between 2021 to 2025 mainly driven by the sustained demand for

comprehensive high-end medical and diagnostic services from and high spending power of residents in

Mainland China, and on the assumption that travel restrictions between Hong Kong and Mainland China

will be lifted by the first half of 2022, as supported by forthcoming implementation of prevention and

control measures such as vaccination programme and health code under mutual recognition system for

cross-border travel.

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In view of this opportunity, we seek to expand our client base by developing a series of health

check programmes to cater for disease prevention, diagnosis, treatment and rehabilitation and such

programmes will be conducted by our specialist doctors as well as panel specialists. Our medical

concierge services is intended to assist with the promotion as well as the arrangement of medical check-

up at our Medical Centres and Diagnostic Centres. It aims to be an one-stop service provider for clients

that are in need of medical check-up, and provide services from information distribution to liaison and

arrangement of health check schedules with us. Although our medical concierge services have not yet

started, we are in the process of collaborating with reputable companies in order to expand our clientele

for our such services. We have recently entered into service agreements with certain marketing partners

pursuant to which they will refer and accompany new clients to obtain medical concierge services from

us in exchange for a percentage of the revenue that we receive from the client.

We believe that in the future through our expanded allied health network and development of

complementary medical services, such as our medical concierge services, we can ultimately bring

together our medical professionals to partner with pharmaceutical and insurance companies as well as

education and financial institutions to create an innovative and holistic healthcare ecosystem.

OUR SERVICES

We mainly provide medical services to our clients through our specialist medical services and

allied health services, and to a much lesser extent, we provide medical management services to certain

medical practitioners.

Medical Services


During the Track Record Period, we have grown our business to offer a wide range of specialist

medical services under our brand. Together with our inpatient services provided at private hospitals in

Hong Kong, we aim to provide a full spectrum of specialist medical services through services provided

at our Medical Centres and at private hospitals; including tertiary care such as providing support and

second opinions to other medical professionals for complicated conditions and inpatient services at

private hospitals to clients that require advanced medical management and treatments. As at the Latest

Practicable Date, we provided these specialist medical services primarily through our medical team

which includes 17 specialist doctors that work for us on a full time and an exclusive basis and nine

doctor panel specialists that work for us on a non-exclusive basis. During the Track Record Period,

medical practitioners who worked for us on an exclusive basis contributed to 99.0%, 96.9%, 98.6% and

96.1% of our revenue from specialist medical services for the years ended 31 March 2019, 2020 and

2021 and the six months ended 30 September 2021, respectively.

Clinical services

Clients can either directly seek our specialist doctors through our medical platform for consultation

to diagnose and treat their specific health problems or external general practice or specialist doctors can

refer their clients to our specialist doctors in order to receive more targeted diagnosis and treatment of

disease by our experienced specialists. Our specialist doctors also refer clients to our other specialists

when necessary in order to provide seamless and comprehensive treatment to our clients.

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The follow table sets out the medical specialties covered by our medical team as at the LatestPracticable Date.

Specialty Description

1 Cardiology An area of medicine which deals with disorders of the heart.

2 Respiratory Medicine An area of medicine which deals with disease of the respiratorysystem such as lung cancer detection, bronchoscopy, lung function.

3 Gastroenterology &Hepatology

An area of medicine which deals with the study of structure,functions, and disease of digestive organs and the liver

4 Nephrology An area of medicine that deals with the physiology and diseases ofthe kidneys.

5 Neurology An area of medicine that deals with the anatomy, functions, andorganic disorders of nerves and the nervous system.

6 Psychiatry An area of medicine which deals with the treatment of mentalillness, emotional disturbance, and abnormal behaviour.

7 Endocrinology, Diabetes &Metabolism

An area of medicine the deals with disorders of the internal glands,such as the thyroid and adrenal glands, as well as disorders such asdiabetes, metabolic and nutritional disorders, obesity, pituitarydiseases, and menstrual and sexual problems.

8 Geriatric Medicine An area of medicine that focuses on the care and well-being of olderpeople.

9 Oncology An area of medicine that deals with the prevention, diagnosis, andtreatment of cancer.

10 Paediatrics An area of medicine that involves the medical care of infants,children, and adolescents.

11 Rheumatology An area of medicine and paediatrics that deals with the joints, softtissues, autoimmune diseases and heritable connective tissuedisorders.

12 Dental Surgery An area of medicine involving the teeth, gums and jawbone.

13 Family Medicine An area of medicine that involves the primary medical care for anindividual and family across all ages, genders, diseases and parts ofthe body.

14 Clinical Microbiology andInfection

An area of medicine that deals with diseases caused by micro-organisms.

15 Doctor panel specialists(1) Specialist medical practitioners working for the Group on an non-exclusive basis covering Respiratory Medicine, Orthopedics &Traumatology, Psychiatry, Oncology, Dental Surgery, GeneralSurgery and Dermatology & Venereology.

Note:

(1) Doctor panel specialists work for the Group on an non-exclusive basis and provide services to us on an as-need-basis only.

The amount of revenue that our doctor panel specialists contributed to the Group for the years ended 31 March 2019, 2020and 2021 and the six months ended 30 September 2021 was HK$2.0 million, HK$7.2 million, HK$3.0 million and HK$1.5million, respectively.

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Inpatient service

For clients who require further investigation, monitoring, surgeries or other inpatient services, we

can arrange for private hospital admissions as requested by the clients or upon the recommendation of

our medical practitioners.

We help facilitate the inpatient admission process of our clients by streamlining the necessary

administrative procedures. Through our referral booking system and our working relationships with the

private hospitals, our clients are generally able to reserve bed space for hospital admission and promptly

receive treatment and obtain emergency medical services at local private hospitals. Our medical

practitioners will visit our patients regularly at the hospitals, and for those with emergency medical

conditions, our specialist doctors will visit and discuss with them even during after-work hours and

public holidays. For details of our operational flow of inpatient admission, please refer to ‘‘—

Operational Flow’’.

We provide assistance to our medical practitioners to obtain admission rights at the local private

hospitals in Hong Kong. It enables our medical practitioners to utilise the facilities at these private

hospitals to perform consultations, treatments and surgeries for our clients. While the admission rights

belong to the respective medical practitioners, all fees payable to us for rendering inpatient services will

be received by the hospitals on behalf of us and were regularly transferred to us directly from the

respective hospitals (after deducting relevant hospital fees and bank charges).


We also provide allied health services at our Medical Centres and imaging and diagnoses services

at our Diagnostic Centres to facilitate our clients’ rehabilitation, diagnostics and other health needs. Our

allied health services mainly include clinical psychology, speech therapy, nutritional therapy,

psychological counselling provided by four non-doctor panel specialists, and imaging and diagnostic

services provided by staff of Hong Kong Imaging. We provide various vaccination services at our

Medical Centres and at the CVC Centres. From February 2021 to December 2021, we provided COVID-

19 vaccination services at the Kowloon Bay CVC Centre and we will start providing such vaccination

services at the Shatin CVC Centre starting from January 2022 until around June 2022, depending on the

on-going COVID-19 situation.

The follow table sets out the allied health services provided during the Track Record Period:

Service Description

1 Clinical Psychology Our experts integrate science, theory, and clinical knowledge for the

purpose of understanding, preventing, and relieving psychologically-

based distress or dysfunction of individuals in order to promote their

well-being and personal development.

2 Speech therapy We assist patients with swallowing problems or communication

disorders caused by brain injuries, strokes, hearing loss, birth defects

or a wide variety of other medical diagnoses that may cause

difficulties swallowing or speech impairment.

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Service Description

3 Nutritional therapy We adopt a holistic approach to wellness that focuses on theimportance of promoting individual health, balanced life-style andself- care by applying nutritional science and necessary dietaryinterventions.

4 Psychological counselling Our counselling psychologists assist patients with physical,emotional and mental distress to improve their psychological well‐being, alleviate feelings of distress and resolve crises. We alsoprovide assessment, diagnosis, and treatment of more severepsychological symptoms.

5 Imaging and diagnoses We provide imaging and diagnoses through Hong Kong Imaging,which includes CT Scan, MRI, Ultrasound, X-ray, Mammogram,Bone densitometry, cardiovascular investigations and otherlaboratory services.

6 Vaccination services We provide vaccination services through our Medical Centres andthe CVC Centres which mainly includes (i) seasonal flu vaccine(Fluarix Tetra 2018–2019); (ii) Hepatitis A vaccine (Havrix 1440);(iii) Hepatitis A and B Combined Vaccine (Twinrix); (iv) HepatitisB Vaccine (Energix); (v) Herpes Zoster (Shingles) Vaccine(Zostavax); (vi) Pneumococcal vaccine (PCV13, 23vPPV); (vii) fullrange of vaccines in the childhood immunisation programme; and(viii) COVID-19 vaccine.

The following table sets out the revenue generated from our medical services by service stream andlocation, for the periods indicated:


2019 2020 2021 2020 2021


Specialist medical servicesprovided at our MedicalCentres(1) 102,562 53.3 140,559 57.6 137,774 55.8 68,172 57.3 80,157 49.0

Specialist medical servicesprovided at private hospitals 89,711 46.7 91,868 37.7 80,232 32.5 38,226 32.1 47,681 29.1

192,273 100.0 232,427 95.3 218,006 88.3 106,398 89.4 127,838 78.1

Allied health services providedat our Medical Centres andDiagnostic Centres(1)(2) 12 0.0 13,137 5.4 36,483 14.8 16,246 13.7 42,120 25.7

Total before elimination 192,285 100.0 245,564 100.7 254,489 103.1 122,644 103.1 169,958 103.8Elimination of inter-segment

revenue — — (1,768) (0.7) (7,586) (3.1) (3,647) (3.1) (6,223) (3.8)

Total 192,285 100.0 243,796 100.0 246,903 100.0 118,997 100.0 163,735 100.0

Notes:

(1) We added five Equity Partner Doctors at various times during the year ended 31 March 2019 and acquired Hong KongImaging in October 2019 which led to the significant increase in revenue during the Track Record Period.

(2) Includes approximately HK$2.9 million and HK$19.8 million in revenue from the Kowloon Bay CVC Centre for the yearended 31 March 2021 and the six months ended 30 September 2021, respectively.

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Operational information

The table below sets out the key operational information of the Group during the Track RecordPeriod:


2019 2020 2021 2020 2021

(Unaudited)

Number of patient visits/admissionsClinical services provided at our Medical Centres 28,505 33,048 32,490 15,966 18,370Inpatient services provided at private hospitals 5,477 8,013 8,156 3,836 5,050Allied health services provided at our Medical

Centres and Diagnostic Centres(1) 10 7,794 19,453 7,239 8,653

Total 33,992 48,855 60,099 27,041 32,073

Average revenue per patient visit/admission(2)

HK$ HK$ HK$ HK$ HK$

Clinical services provided at our Medical Centres 3,598 4,253 4,241 4,270 4,363Inpatient services provided at private hospitals 16,380 11,465 9,837 9,965 9,442Allied health services provided at our Medical

Centres and Diagnostic Centres 1,200 1,686 1,875 2,244 2,578

Notes:

(1) We acquired Hong Kong Imaging in October 2019 which led to the significant increase in patient visits for the years ended

31 March 2020 and 2021.

(2) Average revenue per visit is calculated by dividing the revenue generated from the particular category of service by the totalnumber of patient visits/admissions under the same category.

Changes to our average revenue per patient visit/admission during the Track Record Period wereprimarily due to changes in type of medical services provided as well as the addition of specialistdoctors that joined us during the period.

Average revenue per patient visit for our clinical services provided at our Medical Centresincreased from HK$3,598 per visit for the year ended 31 March 2019 to HK$4,253 per visit for the yearended 31 March 2020. This change was mainly due to the addition of five Equity Partner Doctors whojoined us as specialist doctors at various times during the year ended 31 March 2019 covering variousspecialties. In particular, Dr. Matthew Ng (gastroenterology & hepatology) and Dr. Lo Wai Kei(nephrology) joined us as a specialist doctor in April 2018, Dr. Clement Lee (cardiology) joined us as aspecialist doctor in May 2018, Dr. Boron Cheng (cardiology) joined us as a specialist doctor in July2018, and Dr. Ada Ma (oncology) joined us as a specialist doctor in October 2018. In particular, theaverage revenue per patient visit from our oncologist was significantly higher than from other doctors,leading to the increase. Average revenue per patient visit for our clinical services provided at ourMedical Centres decreased slightly from HK$4,253 per visit for the year ended 31 March 2020 toHK$4,241 per visit for the year ended 31 March 2021 mainly due to changes in the mix of servicesprovided between the periods. Average revenue per patient visit for our clinical services provided at ourMedical Centres increased slightly from HK$4,270 per visit for the six months ended 30 September2020 to HK$4,363 per visit for the six months ended 30 September 2021.

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Average revenue per patient admissions for our inpatient services provided at private hospitalsdecreased from HK$16,380 per admission for the year ended 31 March 2019 to HK$11,465 peradmission for the year ended 31 March 2020. This decrease was mainly driven by greater patientadmissions by doctors that charged relatively lower fees per admission for their services, particularly,our specialist doctor in nephrology and one of our cardiologists. The decrease between the years ended31 March 2019 and 31 March 2020 was also due to the addition of Dr. Eddie Cheung, our paediatricspecialist, during FY2020, whose average revenue per patient admission was significantly lower thanthat of our other specialist doctors. Average revenue per patient visit for our inpatient services providedat private hospitals decreased from HK$11,465 per admission for the year ended 31 March 2020 toHK$9,837 per admission for the year ended 31 March 2021 also mainly due to the addition of Dr. EddieCheung in August 2019 whose average revenue per inpatient admission is substantially lower than otherspecialist doctors as his paediatric specialty mainly involves consultations of new borns and children athospitals with less medical procedures, coupled with lower average revenue per inpatient admission forDr. Lo Wai Kei (nephrology), Dr. Kenneth Tsang (respiratory), Dr. Adam Leung (cardiology) and Dr.Jason Fong (neurology) as they provided more lower priced services during the year ended 31 March2021 due to the mix of patients they received. Average revenue per patient admissions for our inpatientservices provided at private hospitals decreased from HK$9,965 per visit for the six months ended 30September 2020 to HK$9,442 per visit for the six months ended 30 September 2021 mainly attributableto lower average revenue per inpatient admission for Dr. Kenneth Tsang and Dr. Adam Leung due topatient mix.

Medical Management Services

During the Track Record Period, we provided medical management services to certain medicalpractitioners in relation to administrative and operational functions such as clinic management,accounting and finance, human resources, centralised procurement of pharmaceuticals and clinicalsupplies, facilities and lease management, regulatory compliance, marketing and business development,medical record management and information technology systems for maintaining patient and financialrecords. During the years ended 31 March 2019, 2020 and 2021 and the six months ended 30 September2021, our management fee income generated from the provision of medical management servicesamounted to HK$3.4 million, HK$4.6 million, HK$4.5 million and HK$2.3 million, respectively,representing 1.7%, 1.9%, 1.8% and 1.4% of our total revenue.

For the year ended 31 March 2018, we provided medical management services to Dr. KennethTsang, Dr. Matthew Ng and Dr. Lo Wai Kei before they joined our Group as specialist doctors andprovided medical services to us. Dr. Kenneth Tsang joined us as a specialist doctor in November 2017;while Dr. Matthew Ng and Dr. Lo Wai Kei both joined us as specialist doctors in April 2018. We didnot provide such services to them during the years ended 31 March 2019, 2020 and 2021 and the sixmonths ended 30 September 2021.

Prior to the setup of our medical services business in November 2017 and Dr. Kenneth Tsang, Dr.Matthew Ng and Dr. Lo Wai Kei joining us as specialist doctors, we shared our costs between thesethree doctors as this provided economies of scale, increased patient referrals, and helped established theHKMC brand. The costs incurred by us included, but was not limited to, office rent, salaries, thepurchase of medicines, negotiation with the medical suppliers, business contract negotiation and otheradministrative functions. The management service fees charged to them was primarily determined withreference to the costs incurred by the Group. Accordingly, we did not record any significant profit fromthe provision of medical management services to them.

Starting from 30 June 2018, we provided on-going management services to three ophthalmologists,namely Dr. Gordon Chau, Dr. Kenneth Ng and Dr. Barbara Tam (the ‘‘HKMC Ophthalmologists’’ andeach a ‘‘HKMC Ophthalmologist’’), who operate a ophthalmology centre under our Hong Kong

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Medical Consultants brand at the HKMC Ophthalmology Centre. Under this management servicesarrangement with the HKMC Ophthalmologists, they pay us a fixed fee for using our brand and platformservices and they do not provide medical services to us or our patients. Medical management fee incomerecognised from the HKMC Ophthalmologists was HK$3.4 million, HK$4.6 million, HK$4.5 millionand HK$2.3 million for the years ended 31 March 2019, 2020 and 2021 and the six months ended 30September 2021, respectively.

The key terms of our medical management service agreements entered into with the HKMCOphthalmologists are as follows:

HKMC Ophthalmologists

Period of service: Five years commencing 30 June 2018, automatically renewed for asucceeding term of another five years unless 90 days prior notice is given.

Management servicesprovided:

. Licensing the trade name and mark of ‘‘Hong Kong MedicalConsultants’’ for the medical practice’s use.

The Group acts as an independent contractor in providing the followingservices:

. Assist in securing and maintaining space and equipment asreasonably necessary for the medical practice;

. Carry out activities related to the expansion and development ofpatient base, including development of policies and procedures topromote the medical practice;

. Assist with initial patient inquires and complaints;

. Assist with contract supervision and management, such as: businesscontract review and negotiation, recruitment and negotiatingagreements with physicians, negotiating agreements with medicalsuppliers; negotiating agreements with landlords; and

. Assist with business development, marketing, public relations,regulatory compliance and the provision of professional services.

Management fees: HK$1.5 million per year for each HKMC Ophthalmologist

Termination: . Material breach of the terms and conditions of the agreement byeither party which remains uncured for 30 days after written noticeis provided;

. The medical practice fails to use reasonable effort to perform thepatient care and medical services as required by the Medical Councilof Hong Kong; or is no longer qualified to provide medical servicesin Hong Kong; or

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. Either party becomes insolvent or bankrupt, or goes intoreceivership; or required under any government authority or courtorder.

Restrictive covenants: The Group shall not provide or otherwise engage in services or activities

which constitute the practice of medicine for the HKMC Ophthalmologist.

The HKMC Ophthalmologists are granted a licence to use our ‘‘Hong Kong Medical Consultants’’

trade name and mark for their medical practice. We also provide various services to the HKMC

Ophthalmologists, including, but not limited to, the assistance with initial patient inquiries and

bookings, business contract review and negotiation, business development, marketing and public

relations in broadening the customer base, and regular review of compliance with relevant rules and

regulations. The HKMC Ophthalmologists were of the view that by leveraging our platform and

business network, there would be more business opportunities for them and would ease their

administrative burdens.

We agreed to the annual management fee of HK$1.5 million for each HKMC Ophthalmologist

after taking into consideration (i) the costs to be incurred by us for the provision of such medical

management services; (ii) the benefits received by the HKMC Ophthalmologists by using our brand; (iii)

the referral of business between us and the HKMC Ophthalmologists; (iv) the benefits of reduction of

time and effort of the HKMC Ophthalmologists on tedious administrative matters and the reduction of

risk of non-compliance with the rules and regulations relevant to the medical practice of the HKMC

Ophthalmologists; and (v) the reputation and the then scale of business of the HKMC Ophthalmologists.

Because the negotiation with the HKMC Ophthalmologists took place at around the same time we were

in discussions with the other Primary Shareholders to join the Group, we also made reference to the

Fixed Committed Fee Contribution arrangement for the original five Equity Partner Doctors when

determining the annual fixed fee for the HKMC Ophthalmologists. Please see the section headed

‘‘History, Reorganisation and Corporate Structure — Our History’’ for further information on the

discussions amongst the Primary Shareholders.

By offering medical management services to selected medical practitioners, we are able to extend

and build relationships, and enhance our ability to attract and recruit specialist doctors that we believe

would be able to complement our services. Medical management service fees were not material to our

business during the Track Record Period, and represented only 1.8% of our total revenue in FY2021;

and such fees are expected to continue to remain insignificant. Although we currently have no plans to

expand this service, should the opportunity arise, we may agree to expand this service to selected

doctors in the future, in which case, we will charge such doctor(s) either a fixed fee or on a cost plus a

profit margin basis, the amount of which depends on the expected cost and extent of services required

by the doctor(s).

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OUR MEDICAL CARE SERVICES NETWORK

Our Medical Centres and Diagnostic Centres

As at the Latest Practicable Date, we operated three Medical Centres and three Diagnostic Centres,

all of which are located in Central, Hong Kong. The following table sets out the basic information, types

of services provided and facilities at each of our Medical Centres as at the Latest Practicable Date:

Integrated FlagshipMedical Centre HKMC II

HKMC PsychiatricCentre

Commencement of business with the Group June 2021 November 2017 November 2017

Approximate GFA (sq.ft.) 16,282 2,092 300

Specialist Medical Services(1)

Cardiology ✓

Respiratory Medicine ✓

Gastroenterology & Hepatology ✓ ✓

Nephrology ✓

Neurology ✓

Psychiatry ✓

Endocrinology, Diabetes & Metabolism ✓

Geriatric Medicine

Oncology ✓ ✓

Paediatrics ✓

Rheumatology ✓

Dental Surgery ✓

Family Medicine ✓

Clinical Microbiology and Infection ✓

Allied Health Services(1)

Clinical Psychology ✓ ✓

Psychological Counselling ✓ ✓

Speech therapy ✓

Nutritional therapy ✓

Main facilities— Consultation room(s) 24 Three One

— Designated room(s) for medical

procedures

— Four —

— Ultrasound room(s) One — —

— Treatment room(s) Ten — —

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The following table sets out the basic information, types of services provided and key equipment at

each of our Diagnostic Centres as at the Latest Practicable Date:

Diagnostic Centres

Imaging andCardiovascular Centre MRI Centre Medical Laboratory Centre

Commencement of business withthe Group

October 2019 October 2019 October 2019

Approximate GFA (sq.ft.) 3,003 1,500 1,700

Services CT Scan, Ultrasound, X-ray,Mammogram, Blood andCardiovascular services

MRI Blood and other specimenlaboratory testing services

Key equipment One CT Scan machineOne X-ray machineTwo Ultrasound machinesOne Mammogram machineOne DEXA machine

One MRI machine Six testing machines

Our Diagnostic Centres

During the Track Record Period, we generally engaged third party imaging and diagnosesproviders to conduct supplementary services for our clients including laboratory, imaging and diagnosticservices as requested by our specialist doctors. In view of our business expansion, in October 2019, weacquired Hong Kong Imaging, which has two imaging and diagnoses centres and one laboratory, all ofwhich are located in Central, Hong Kong. The acquisition of Hong Kong Imaging provides our specialistdoctors with a trusted and stable source to obtain diagnostic services, and provides our patients with amore seamless service experience. Our specialist doctors currently refer laboratory, imaging anddiagnostic services to Hong Kong Imaging to the extent practicable, as well as to other third-partyimaging and diagnoses providers to the extent Hong Kong Imaging does not provide such services.Hong Kong Imaging also get referrals from other third-party medical practitioners and provide servicesto their clients. For the years ended 31 March 2020 and 2021 and the six months ended 30 September2021, Hong Kong Imaging contributed HK$12.9 million, HK$32.5 million and HK$21.8 million to ourrevenue, respectively, representing 5.2%, 12.9% and 13.1% of our total revenue, respectively.

Historically, Hong Kong Imaging had been profitable. Hong Kong Imaging recorded an unauditednet profit of HK$4.1 million for the year ended 31 March 2018 and HK$4.2 million for the year ended31 March 2019. Prior to our acquisition on 30 October 2019, Hong Kong Imaging recorded anunaudited loss of HK$0.3 million for the period from 1 April 2019 to 29 October 2019 mainly due to (i)fewer customers from Mainland China as a result of the social unrest and protests in Hong Kong and (ii)increased repair and maintenance costs of HK$0.6 million for its CT Scan machine due to the expiry ofthe warranty period for the machine. Hong Kong Imaging recorded a loss of HK$2.6 million for the fullyear ended 31 March 2020 mainly due to the same reasons above, with repair and maintenance costs ofHK$1.1 million, and coupled with the COVID-19 outbreak which adversely impacted Hong KongImaging since the beginning of 2020. The social unrest and protests in Hong Kong have subsided inlight of the enactment of the National Security Law (i.e. the Law of the People’s Republic of China onSafeguarding National Security in the Hong Kong Special Administrative Region enacted on 30 June2020). The Directors believe that once the COVID-19 pandemic is over, and business and travel returnsto normal, Hong Kong Imaging’s business will improve and return to profitability. Please also see thesection headed ‘‘Financial Information — Recent Developments and Material Adverse Change — Impactof COVID-19’’.

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Selected Details of our Medical Centres and Diagnostic Centres

The following table provides the commencement date, renovation costs and staffing at our Medical

Centres and Diagnostic Centres:

Medical Centres Diagnostic Centres

IntegratedFlagshipMedicalCentre(1) HKMC II

HKMCPsychiatricCentre

Imaging &Cardiovascular

CentreMRICentre

MedicalLaboratory

Centre

Commencement of business with the Group June 2021November

2017November

2017October

2019October

2019

Renovation costs incurred during theTrack Record Period (HK$’000) 19,693 1,932 — 19 — —

Number of Staffing:As at 31 March 2019— Specialist doctors 10 2 1 N/A N/A N/A— Non-doctor specialists 2 — — N/A N/A N/A— Nurses — 2 — N/A N/A N/A— Healthcare assistants 15 1 2 N/A N/A N/A— Pharmacists and dispensers 5 2 — N/A N/A N/A— Other clinical support staff 9 3 — N/A N/A N/A

As at 31 March 2020— Specialist doctors 15 3 3 3 — —

— Non-doctor specialists 3 — — 3 2 —

— Nurses — 2 — — — —

— Healthcare assistants 22 1 2 5 — —

— Pharmacists and dispensers 5 2 — — — —

— Other clinical support staff 10 3 — 3 2 1

As at 31 March 2021— Specialist doctors 16 3 3 3 — —


— Nurses 1 3 — — — —




As at 30 September 2021— Specialist doctors 20 1 3 2 — —


— Nurses 2 2 — — — —




Note:

(1) We established HKMC I, HKMC III, HKMC Geriatric Medicine Centre and HKMC Paediatric Centre in January 2018,March 2020, November 2017 and August 2019, respectively, and incurred total renovation costs of HK$6.4 million, HK$1.1

million, nil and HK$1.0 million for these respective medical centres during the Track Record Period. In June 2021, werelocated our HKMC I, HKMC III, HKMC Geriatric Medicine Centre and HKMC Paediatric Centre to suite 901, CentralBuilding, 1–2 Pedder Street, Central, Hong Kong and established our Integrated Flagship Medical Centre. The number of

staffing included in our Integrated Flagship Medical Centre as of 31 March 2019, 2020 and 2021 represents the totalnumber of staff included in HKMC I, HKMC III, HKMC Geriatric Medicine Centre and HKMC Paediatric Centre as of 31March 2019, 2020 and 2021, respectively.

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The following tables provide details of our key equipment at our Medical Centres and Diagnostic

Centres:

Integrated Flagship Medical Centre

Description of key equipment:

Age (years)as at

30 September2021

Remaininguseful life (years)

Net book value(HK$’000) as at30 September

2021

1 GE CASE Performance Stress Test System with

Treadmill and BP

5 — —

2 Nicolet 3 Channels UltraPro EMG/NCS + Software 4 1 58

3 ECG Analyzer & ECG Electrode 3 2 9

4 Pharmacy Refrigerator Fiocchetti Labor — 400 with

ECT-F display panel (002270) (2 keys)

4 1 7

5 Pharmacy Fridge (Labor 140) 3 2 10

6 1 IQAIR HP100 AIR CLEANER 3 2 6

7 2 IQAir HealthPro 100 2 3 20

8 Fitmate WM C09066-01-99 3 2 28

9 GE Logiq S8 XDClear 2.0 Digital Ultrasound

System Console Design

1 4 406

10 Drager Jaundice meter JM-105 2 3 25

11 RAD-97 with non-invasive blood pressure, pediatric

reusable sensor, adhesive sensor

2 3 14

12 1 IQAir HealthPro 100 2 3 10

13 Flu test instrument 2 3 23

14 Philips Affiniti 50 Ultrasound System 0 5 380

15 Philips 12-4 mhz Sector-array transducer 0 5 97

HKMC II

Description of key equipment:

Age (years)as at

30 September2021

Remaininguseful life (years)

Net book value(HK$’000) as at30 September

2021

1 Model NTE797, Negative Pressure Total Exhaust

Sterile Isolator

3 2 65

2 Pharmacy Fridge (Medika-200) 3 2 13

3 6 sets of Plum 360 CE 3.0 Modu Le New 3 2 35

4 AED Defibrillator 3 2 6

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Imaging and Cardiovascular Centre Net book value(HK$’000) as at30 September

2021Description of key equipment:

Age (years) as at30 September

2021Remaining

useful life (years)

1 PHILIPS ICT Elite System, Optivantage DH

Pedestal System (CT SCAN)

5 — —

2 FUJIFILM MAMMO machine model No.

399Y100004

5 1 —

3 GE Medical Systems HK Ltd — Detector for

GE Lunar DPX-NT System

2 3 48

4 GE LOGIQ9 Ultrasound 11 — —

5 PHILIPS AFFINITI 70 Multi-specialty Diagnostic

Ultrasound System

5 — —

6 X-RAY Tube for TOSHIBA AQUILION CT

Scanner

9 — —

7 FUJIFILM Imaging Machine, FCR PRIMA T2 5 — —

8 FUJIFLIM FDR D-EV02 G35 Wireless X-ray

Machine

3 2 96

MRI Centre Net book value(HK$’000) as at30 September

2021Description of key equipment:

Age (years) as at30 September

2021Remaining

useful life (years)

1 Philips Ingenia 1.5T S MRI System 5 — —

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The following table provides our revenue at our Medical Centres and Diagnostic Centres during

the Track Record Period:


2019 2020 2021 2020 2021


Medical Centres:Integrated Flagship Medical

Centre(1) 154,052 78.7 152,916 61.6 138,624 55.1 66,484 54.8 88,546 53.3HKMC II 25,347 13.0 67,114 27.0 65,932 26.2 32,702 27.0 30,351 18.3HKMC Psychiatric Centre 12,886 6.6 12,703 5.1 14,494 5.8 7,703 6.4 5,982 3.6

192,285 98.3 232,733 93.7 219,051 87.1 106,888 88.1 124,878 75.2

Diagnostic Centres — — 12,831 5.2 32,503 12.9 15,772 13.0 21,828 13.1CVC Centres — — — — 2,870 1.1 — — 19,814 11.9Others(2) — — — — 97 0.0 — — 3,452 2.1Medical Management Services 3,375 1.7 4,598 1.8 4,500 1.8 2,250 1.9 2,250 1.4Less: Elimination of inter-

segment revenue — — (1,768) (0.7) (7,586) (3.0) (3,647) (3.0) (6,223) (3.7)

Total 195,660 100.0 248,394 100.0 251,434 100.0 121,264 100.0 166,000 100.0

Note:

(1) Included revenue generated from HKMC I, HKMC III, HKMC Geriatric Medicine Centre and HKMC Paediatric Centreduring the Track Record Period.

(2) Represents revenue from wholesale of pharmaceutical products.

The following table provides our revenue by type of medical practitioners at our Medical Centres

during the Track Record Period:


Type of medical practitioner 2019 2020 2021 2020 2021


Founding Doctors 107,281 55.8 92,653 39.8 75,905 34.7 38,962 36.5 40,037 32.1Equity Partner Doctors 77,709 40.4 124,413 53.5 128,436 58.6 59,580 55.7 75,868 60.7Employee Doctors 5,277 2.7 8,140 3.5 10,552 4.8 5,367 5.0 6,951 5.6Doctor panel specialists 2,006 1.1 7,221 3.1 3,017 1.4 2,489 2.3 1,530 1.2Non-doctor panel specialists 12 0.0 306 0.1 1,141 0.5 490 0.5 492 0.4

Total 192,285 100.0 232,733 100.0 219,051 100.0 106,888 100.0 124,878 100.0

Note:

(1) One of our Doctor panel specialists (Dr. Michele Yuen) became an Equity Partner Doctor starting in August 2020.

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OPERATIONAL FLOW

The following flow charts illustrate the operation flow at (i) our Medical Centres for medical

services and allied health services, and (ii) inpatient medical services at private hospitals:

Medical Centres for Specialist Medical Services and Allied Health Services

Registration Pre-consultation

assessment

Consulation Treatment, drug

prescription,

and/or referral

arragement

Drug dispensing

(if applicable)

Payment and

arrange follow-up

(if applicable)

Step 1 Step 2 Step 3 Step 4 Step 5 Step 6

Step 1: Our medical centre assistant registers the patient at the reception.

Step 2: Our medical centre assistant collects pre-consultation information such as blood

pressure and/or body temperature of patient.

Step 3: Medical practitioner provides consultation and treatment plan to patient.

Step 4: Medical practitioner provides treatment or procedure to patient, or provides (i)

prescription to patient; and/or (ii) referral to other specialists; and/or (iii) hospital

admission services (if applicable) to patient. If hospital admission is required, treatment

may be performed at the hospital.

Step 5: Patient receives medication prescribed by medical practitioner (if applicable).

Step 6: Patient proceeds to payment and arranges for follow-up appointment (if applicable).

Inpatient Admission at Private Hospitals

Step 1 Step 2 Step 3 Step 4 Step 5 Step 6

Admission

registration

Investigation,

treatment or surgery

drug dispensing

(if applicable)

Discharge from

hospital

Payment

remittance

Arrange

follow-up

(if applicable)

Step 1: Our clients may receive pre-treatment consultation by our medical practitioners before

their admission to hospitals. After confirming the need for hospital admission with

patient, we will check the availability of private hospitals and prepare the patient for

admission. In order to do so, we will prepare and submit admission letters ahead of the

admission date to the relevant private hospital, which specify information including the

patient’s general conditions, preliminary diagnosis and the facilities and services

required.

Step 2: Patient receives investigation, treatment or surgery at hospital performed by our medical

practitioners, and followed by the post-treatment check-up.

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Step 3: Patient receives medication prescribed by medical practitioner (if applicable).

Step 4: When the patient is discharged from the hospital, he/she will settle the total fees,

including the consultation and treatment fees charged by our medical practitioners

directly with the hospital.

Step 5: The relevant hospital will then remit our fees to us through bank transfer (after

deducting the relevant hospital fees and bank charges).

Step 6: Our medical practitioner will arrange follow-up consultation for the patient at our

Medical Centres as necessary. Our nurses and healthcare assistants also follows up with

the patient and addresses any needs the client may have after the procedures

OUR PROFESSIONAL TEAM

Our professional team comprises of our medical team and allied health services team along with a

team of pharmacists, nurses and medical assistants.

Our specialist medical services are provided by our medical team which, as of the Latest

Practicable Date, comprised of (i) 17 specialist doctors covering cardiology, respiratory medicine,

gastroenterology & hepatology, nephrology, neurology, psychiatry, endocrinology, diabetes &

metabolism, geriatric medicine, oncology, rheumatology, paediatrics, dental surgery, family medicine

and clinical microbiology and infection and (ii) nine doctor panel specialists covering respiratory

medicine, orthopedics & traumatology, psychiatry, oncology, dental surgery, general surgery and

dermatology & venereology.

Our allied health services are provided by our allied health service team, which, as of the Latest

Practicable Date, comprised of (i) four non-doctor panel specialists covering clinical psychology, speech

therapy, nutritional therapy and psychology counselling at Medical Centres; and (ii) doctors,

radiologists, nurses, healthcare assistants and other technicians at Hong Kong Imaging.

Our Specialist Doctors and Panel Specialists

Our success is attributable to our experienced professional medical team. Our medical team

provides a wide range of specialist medical services; and our exclusive specialist doctors have on

average approximately 18 years of specialist qualification.

All of our medical practitioners are registered in Hong Kong under the Medical Registration

Ordinance (Chapter 161 of the Laws of Hong Kong) and our specialists are fellows of the respective

academy or college of their specialties in Hong Kong and overseas. Each of our specialist doctors and

Panel Specialists is covered by medical liability insurance in respect of his or her own practice. Our

operations department is responsible to verify the annual practising certificate issued by the Medical

Council for each specialist doctor and Panel Specialist and to ensure that our specialist doctors and

Panel Specialists purchase their own medical liability insurance. We have also purchased medical

liability insurance in order to ensure we are also protected against any malpractice claims against us.

During recruitment and negotiation with potential candidates for our medical team in determining

the agreed rate of service, we will take into account various factors such as area of specialty, number of

consultation hours and patients, responsibility, qualification, experience, reputation, and revenue

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expected to be generated. Upon expiration and/or renewal of service contracts with our medical

practitioners, our senior management team will review and renegotiate their service agreements based on

their performance with the Group. Our Medical Committee also conducts periodic reviews to help ensure

our doctors are performing up to professional standards, including investigating any ethical issues and

complaints.

The following tables sets out the details of our specialist doctors and Panel Specialists as at the

Latest Practicable Date:

Specialist doctors

Specialty

Number ofmedical

practitioner(s)Name of medicalpractitioners

Date of joiningthe Group

Expiry dates ofexisting serviceagreements(1)

Founding Doctors

Respiratory Medicine 1 Dr. Kenneth Tsang November 2017 November 2022

Cardiology 1 Dr. Adam Leung January 2018 November 2022

Neurology 1 Dr. Jason Fong November 2017 November 2022

Psychiatry 1 Dr. Jenny Tsang November 2017 November 2022

Geriatric Medicine 1 Dr. Chu Leung Wing November 2017 November 2022

Equity Partner Doctors

Cardiology 2 Dr. Clement Lee May 2018 March 2023

Dr. Boron Cheng July 2018 March 2023

Gastroenterology &

Hepatology

1 Dr. Matthew Ng April 2018 March 2023

Nephrology 1 Dr. Lo Wai Kei April 2018 March 2023

Oncology 1 Dr. Stanley Yu August 2020 July 2025

Paediatrics 1 Dr. Eddie Cheung August 2019 May 2024

Endocrinology, Diabetes

& Metabolism

1 Dr. Michele Yuen May 2018 June 2025

Employee Doctors

Gastroenterology &

Hepatology

1 Dr. Choi Wai Lok November 2021 None

Rheumatology 1 Dr. Catherine Yuen March 2020 None

Dental Surgery 1 Dr. Lee Kim Bing May 2021 None

Family Medicine 1 Dr. Brigitte Schlaikier

Elisabeth

July 2021 None

Clinical Microbiology

and Infection

1 Dr. Teresa Wang October 2021 None

Total 17

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Panel Specialists

SpecialtyNumber of Panel

Specialists(2)Expiry dates of existing service

agreements

Doctors

Respiratory Medicine 2 April 2024 and June 2024

Orthopedics & Traumatology 1 None(3)

Psychiatry 2 January 2024 and May 2025

Oncology 1 None(3)

Dental Surgery 1 None

General Surgery 1 None(3)

Dermatology & Venereology 1 October 2025

Non-doctors

Clinical Psychology 1 May 2025

Speech Therapy 1 May 2025

Nutritional Therapy 1 August 2024

Psychological Counselling 1 April 2025

Total 13

Notes:

(1) We entered into service agreements with our Founding Doctors, Equity Partner Doctors and Employee Doctors. Please seebelow for further details of the respective service agreements.

(2) We generally have partnership service agreements with the Panel Specialists. Panel Specialists work for the Group on a non-exclusive basis and provide services to us on an as-need-basis only. The amount of revenue that our Panel Specialists

contributed to the Group for the years ended 31 March 2019, 2020 and 2021 and the six months ended 30 September 2021was HK$2.0 million, HK$7.5 million, HK$4.2 million and HK$2.0 million, respectively.

(3) Whilst no written service agreement were signed with these Panel Specialists, they provide services to us on an as neededbasis.

Compensation Arrangements with Specialist Doctors and Panel Specialists

As at the Latest Practicable Date, we had 17 specialist doctors that work for us on an exclusive

basis and 13 Panel Specialists, that work for us on an non-exclusive basis. The compensation

arrangements for them differ based on whether the doctor is a Founding Doctor, Equity Partner Doctor,

Employee Doctor or Panel Specialist.

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The following table provides the number of our specialist doctors and Panel Specialists as at thedates indicated and the service fees and/or salaries paid to such medical practitioners for the periodsindicated:

As at 31 MarchAs at

30 September2021

As at theLatest

PracticableDate2019 2020 2021

Founding Doctors 5 5 5 5 5Equity Partner Doctors(1) 5 6 8 7 7Employee Doctors(2) 1 2 2 4 5Panel Specialists(3) 4 11 12 13 13

Total 15 24 27 29 30

Year ended 31 March

Six monthsended

30 September20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

Founding Doctors — — — —

Equity Partner Doctors 40,879 62,508 62,855 38,376Employee Doctors 2,853 3,912 5,947 4,184Panel Specialists 968 3,620 1,306 1,202

Total 44,700 70,040 70,108 43,762

Note:

(1) Dr. Ada Ma tendered her resignation with us in August 2021 and her last employment date is expected to be in January2022, thus we have excluded Dr. Ada Ma as at 30 September 2021 and as at the Latest Practicable Date.

(2) Dr. Lee Kim Bing, specialist in dental surgery, joined us in May 2021 as an Employee Doctor. Dr. Brigitte Schlaikier, aspecialist in family medicine, joined us in July 2021 as an Employee Doctor. Dr. David But, a specialist in gastroenterology& hepatology and one of our Employee Doctors, resigned and left in September 2021. Dr. Teresa Wang, a specialist inclinical microbiology and infection, joined us in October 2021 as a part-time Employee Doctor. Dr. Choi Wai Lok, aspecialist in gastroenterology & hepatology, joined us in November 2021 as an Employee Doctor.

(3) A doctor specialised in dermatology & venereology joined us in October 2020 as a Panel Specialist. A doctor specialised indental surgery joined us in May 2021 as a Panel Specialist.

The Founding Doctors consider themselves as the founding members and major business owners ofour Group, and that their economic interests are aligned with that of our Group’s overall profitabilityand performance. As such, the Founding Doctors had agreed to structure their financial return tocorrelate with the Founding Doctors’ capacities as major business owners of our Group (i.e. the longterm growth and financial return from their equity ownership in the Group) rather than service feespayable on regular basis for our Founding Doctors’ provision of medical services in their capacities asspecialist doctors.

As mentioned in the section headed ‘‘History, Reorganisation and Corporate Structure — OurHistory’’, with the aim to develop our business as an integrated medical service provider, we decided tointroduce, in addition to the Founding Doctors, other specialist doctors to our Group, with Dr. KennethTsang playing the role of liaising with potential partners. In consideration of our Group’s stage ofdevelopment at the time, and in order to fulfil various developmental needs (which included, amongother things, the strengthening of our clinic brand and attaining the targeted scale of operations), it wascrucial that leading specialist doctors with their own successful and profitable medical practices berecruited to join our Group. As such, our Equity Partner Doctors (namely, Dr. Matthew Ng, Dr. Boron

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Cheng, Dr. Lo Wai Kei, Dr. Clement Lee and Dr. Ada Ma) were identified by Dr. Kenneth Tsang toengage in discussions to join our Group in 2017. As each of such Equity Partner Doctors was a leadingspecialist who, prior to joining us, had his/her own established, successful and profitable medicalpractice, it was necessary for us to offer the Equity Partner Doctors a sufficiently attractive remunerationpackage, structured at better than prevailing market rates, to incentivize their leaving their successfulmedical practices to join our Group at its then early stage of development. Details of the remunerationand service terms of the Equity Partner Doctors are set out below. After the joining of these EquityPartner Doctors, to further expand our specialist doctors team, we subsequently recruited the other threeEquity Partner Doctors (namely, Dr. Eddie Cheung, Dr. Michelle Yuen and Dr. Stanley Yu) on termssimilar to those adopted for the other Equity Partner Doctors.

We have five Employee Doctors as at the Latest Practicable Date. In contrast to the Equity PartnerDoctors (who, prior to joining us, already had their own established and successful medical practices),the Employee Doctors had joined our Group to provide them with a medical platform in order to growhis/her medical practice in the private sector. In contrast to the Founding Doctors and the Equity PartnerDoctors, the Employee Doctors have no equity interest in the Group and rely on a fixed salary and theprofit sharing bonus as their primary source of income. Details of the remuneration and service terms ofthe Employee Doctors are set out below.

During the Track Record Period, we entered into different service agreements with our specialistdoctors and Panel Specialists. The key terms of our typical service agreements are as follows:

Founding Doctors

Term: Five years

Work scope: Provision of medical services to the Group with respect to his or her medicalspecialty as an independent contractor.

Qualifications: The doctor must be a registered specialist of the Hong Kong MedicalCouncil or a recognised professional body of equivalent standing whichentitles him/her to legally practise as a medical practitioner in Hong Kong,and shall at all times maintain his/her specialist registration.

Exclusivity: Each of the Founding Doctors is engaged on an exclusive basis, and theyshall practise at our Medical Centres or any other locations as mutuallyagreed at all material times.

Service fees: No service fees are provided to any of the Founding Doctors.

Termination: Either party may give written notice to the other party to terminate theagreement with no less than 90 days prior written notice.

The Group may terminate the agreement if the relevant Founding Doctor:

. breaches any terms of the agreement capable of remedy but is notremedied within 21 days after notice provided by the Group;

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. becomes incompetent, guilty of gross misconduct and/or any serious orpersistent negligence in respect of a doctor’s obligations;

. fails or refuses after written warning to carry out his/her dutiesreasonably and property required;

. becomes charged, indicted or convicted of a criminal offence;

. becomes involved in a disciplinary inquiry hearing at the MedicalCouncil of Hong Kong as a defendant and sentenced; or indicted in adeath inquest of a deceased who was the doctor’s patient; or

. becomes unable to practise as a medical practitioner for any reason.

Restrictive covenants: Each of the Founding Doctors shall not directly or indirectly solicit or aidany person in soliciting any of the Group’s patients during or after the termof the agreement; and shall indemnify the Group for all fees, costs orexpenses (including legal fees) incurred by the Group for enforcing thiscovenant.

Please also see ‘‘— New Service Agreements with Founding Doctors and Equity Partner Doctors’’below, which will become effective upon the [REDACTED].

During the Track Record Period, we paid no service fees to our Founding Doctors, all of whichjoined us as specialist doctors on an exclusive basis starting on 3 November 2017. Our FoundingDoctors were willing to accept no service fees for the medical services they provided to us because asfounding shareholders, they were willing to take up the risk and rewards of the business, and futureearnings generated by the Group. As exclusive doctors, they each have an obligation to notify us andobtain our approval if he/she provides medical services for a fee at other hospitals or locations that havenot been registered with the Group; and we are not aware of such instances or any breach of thisnotification requirement during the Track Record Period. As Founding Doctors, they rely mainly ondividends distributed by us as their primary source of income. During the Track Record Period, theamount of dividends declared that was attributable to the Founding Doctors amounted to HK$103.1million (representing nil for the year ended 31 March 2019, HK$60.2 million for the year ended 31March 2020, HK$42.9 million for the year ended 31 March 2021 and nil for the six months ended 30September 2021).

The following table provides the contribution to our profit before tax (before [REDACTED]expenses) by each of our Founding Doctors during the Track Record Period:


Founding Doctor 2019 2020 2021 2020 2021


Doctor A 24,000 33.5 18,368 31.1 4,544 11.1 4,821 19.7 896 3.6Doctor B 18,402 25.7 13,904 23.5 7,076 17.2 4,033 16.5 5,526 22.2Doctor C 7,301 10.2 5,113 8.6 1,376 3.3 1,334 5.5 (80) (0.3)Doctor D 5,917 8.3 6,102 10.3 6,478 15.8 4,041 16.5 2,108 8.5Doctor E 3,542 4.9 2,781 4.7 2,206 5.4 917 3.8 1,127 4.5

Total 59,162 82.6 46,268 78.2 21,680 52.7 15,146 62.0 9,577 38.5

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The Founding Doctors’ contribution to our profit before tax (before [REDACTED] expenses)amounted to approximately HK$59.2 million, HK$46.3 million, HK$21.7 million and HK$9.6 millionduring the years ended 31 March 2019, 2020 and 2021 and the six months ended 30 September 2021,respectively, representing 82.6%, 78.2%, 52.7% and 38.5% of our total profit before tax (before[REDACTED] expenses), respectively. Should we have paid service fees to the Founding Doctors duringthe Track Record Period, our profit for years/period during the Track Record Period would have besubstantially lower. Please see the section headed ‘‘— Hypothetical Net Profit Taking into AccountMarket Compensation of Our Founding Doctors’’ below for further information. Please also see thesection headed ‘‘Risk Factors — Risk Relating to Our Business — The service fees we pay to ourspecialist doctors that are Founding Doctors and Equity Partner Doctors have had, and is expected tocontinue to have, a significant impact on our business, financial position and profitability’’.

Equity Partner Doctors

Term: Five years

Work scope: Provision of medical services to the Group with respect to his or her medicalspecialty as an independent contractor.


Exclusivity: Each of the Equity Partner Doctors is engaged on an exclusive basis, andthey shall practise at our Medical Centres or any other locations as mutuallyagreed at all material times.

Service fees: Depending on the Equity Partner Doctor, whose service agreement wasnegotiated at an arms-length basis with the Group, the service fees payableto each of the Equity Partner Doctor is calculated by the following formula:

Service Fee = Annual Fee Contribution – Committed Fee Contribution

The Annual Fee Contribution is:

(i) the total amount derived from medical services that the relevant EquityPartner Doctor directly contributed to the Group’s earnings beforeinterest, taxes, depreciation and amortisation (‘‘EBITDA’’) for theparticular year, or

(ii) the total amount of revenue and income derived from medical servicesthat the relevant Equity Partner Doctor directly contributed to theGroup for the particular year less associated direct costs includingrental expenses, dedicated medical staff costs and other direct expenses(‘‘Doctor Operating Profit’’);

in each case, as calculated based on the audited financial statements and inaccordance with HKFRS.

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Six out of seven of our current Equity Partner Doctors are required tocontribute a fixed dollar amount (‘‘Fixed Committed Fee Contribution’’) tothe Group’s profit before tax per year, which ranged from HK$0.5 million toHK$2.6 million under his/her respective agreement. The remaining EquityPartner Doctor is required to contribute the greater of a fixed amount (i.e.HK$1.1 million) to the Group’s profit before tax per year or 11.25% of hisAnnual Fee Contribution (‘‘Variable Committed Fee Contribution’’, andtogether with the Fixed Committed Fee Contribution, each a ‘‘CommittedFee Contribution’’). The fixed portion of the Committed Fee Contributionfor each Equity Partner Doctor was predetermined by his/her equity interestheld in the Group at the relevant time he/she joined the Group.

For the six months ended 30 September 2021, the service fees paid to eachof our Equity Partner Doctors ranged from HK$1.5 million to HK$10.7million. For the year ended 31 March 2021, the service fees paid to each ofour Equity Partner Doctors ranged from HK$2.1 million to HK$19.5 million.For the year ended 31 March 2020, the service fees paid to each of ourEquity Partner Doctors ranged from HK$2.3 million to HK$21.3 million. Forthe year ended 31 March 2019, the service fees paid to each of our EquityPartner Doctors ranged from HK$4.0 million to HK$12.8 million.

Termination: Either party may give a written notice to the other party to terminate theagreement with no less than 3-months prior written notice.

The Company may terminate the agreement if the relevant Equity PartnerDoctor:

. breaches any material term of the agreement;

. fails to perform medical services up to professional standards requiredby the Medical Council of Hong Kong or is not qualified to providemedical services in Hong Kong; or

. becomes insolvent or bankrupt or is not able to carry out the medicalservices or duties under the agreement in compliance with allapplicable laws.

Restrictive covenants: Each of the Equity Partner Doctors shall not:

. divulge or communicate with any person or use for any purpose theGroup’s trade secrets and other confidential information;

. for a period of 6-months after termination of the agreement, directlycontact and/or solicit in Hong Kong any client/patient of the Group forwhich he/she provided medical services during the last 12-months priorto the termination of the agreement; and

. for a period of 6-months after termination of the agreement, solicit orentice away from the Group, any individual who is or has been anemployee or director during the last 12-months prior to the terminationof the agreement, except for dedicated medical staff (such as nursesand assistants) that are specifically employed for the doctor.

Please also see ‘‘— New Service Agreements with Founding Doctors and Equity Partner Doctors’’below, which will become effective upon the [REDACTED].

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We currently have seven Equity Partner Doctors, all of whom work for us on an exclusive basis,and are small passive shareholders of the Group. Five Equity Partner Doctors joined us as specialistdoctors during the year ended 31 March 2019 and one additional Equity Partner Doctor (Dr. EddieCheung) joined us as a specialist doctor during the year ended 31 March 2020. On 1 August 2020, Dr.Stanley Yu joined our Group as a specialist doctor and Equity Partner Doctor; while Dr. Michele Yuenjoined us as a specialist doctor on 1 July 2020, and became an Equity Partner Doctor on 1 August 2020.In August 2021, one of our Equity Partner Doctors, Dr. Ada Ma tendered her resignation due to personalreasons and had ceased to be our Equity Partner Doctor as at the Latest Practicable Date. As exclusivedoctors, they each have an obligation to notify us and obtain our approval if he/she provides medicalservices for a fee at other hospitals or locations that have not been registered with the Group; and we arenot aware of such instances or any breach of this notification requirement during the Track RecordPeriod and up to the Latest Practicable Date.

The Equity Partner Doctor’s service fees are determined by subtracting his/her Committed FeeContribution to us from his/her Annual Fee Contribution (e.g. EBITDA or Doctor Operating Profit). Sixout of seven of our Equity Partner Doctors have an arrangement with us whereby they only contribute afixed dollar amount to our profit before tax (i.e., the Fixed Committed Fee Contribution) under theirrespective service agreements. Therefore, any excess in income over the Committed Fee Contributionthat was generated by these six Equity Partner Doctors was paid out to him/her as service fees, which inturn effectively places a cap on the amount of profit that we can derive from them to the total amount ofthe Fixed Committed Fee Contributions, which is currently HK$9.3 million per year. The remainingEquity Partner Doctor has an arrangement with us whereby he contributes a variable amount to ourprofit before tax with a fixed minimum amount of HK$1.1 million per year (i.e. the Variable CommittedFee Contribution as discussed above), so accordingly, there is no cap on the amount of profit that wecan derive from him.

Prior to joining our Group, each of our Equity Partner Doctors was a leading specialist who hashis/her own established medical practice. As such, and in view of the requirements of the Group’s thenstrategic and development plans, we offered the Equity Partner Doctors a sufficiently attractiveremuneration package (i.e. any excess in income over their respective Committed Fee Contribution) atbetter than prevailing market rates to incentivise their leaving their established and successful medicalpractice to join the Group.

During the years ended 31 March 2019, 2020, 2021 and the six months ended 30 September 2021,the total service fees paid by us to our Equity Partner Doctors amounted to HK$40.9 million, HK$62.5million, HK$62.1 million and HK$38.4 million, respectively. During the Track Record Period, thedividends declared that were attributable to the Equity Partner Doctors amounted to HK$10.2 million.The Equity Partner Doctors’ contribution to our revenue amounted to HK$77.7 million, HK$124.4million, HK$128.4 million and HK$75.9 million for the years ended 31 March 2019, 2020 and 2021 andthe six months ended 30 September 2021, respectively. The Equity Partner Doctors’ contribution to ourprofit before tax (before [REDACTED] expenses) amounted to HK$6.3 million, HK$8.6 million,HK$9.9 million and HK$5.2 million during the years ended 31 March 2019, 2020 and 2021 and the sixmonths ended 30 September 2021, respectively; representing 8.8%, 14.5%, 24.0% and 21.0% of ourtotal profit before tax (before [REDACTED] expenses), respectively. The service fee arrangements thatour Equity Partner Doctors have with us generally effectively cap the potential profitability that theGroup can retain from them, and is expected to continue to limit our profitability attributable to them forthe foreseeable future. Please see the section headed ‘‘Risk Factors — Risks Relating to Our Business —The compensation we pay to our specialist doctors that are Founding Doctors and Equity PartnerDoctors have had, and are expected to continue to have, a significant impact on our business, financialposition and profitability’’.

Going forward, we plan to mainly recruit specialist doctors with compensation arrangements thatprovide a fixed base salary plus incentive profit sharing or fee split arrangements, except for exceptionalopportunities where we find a doctor whose medical practice justifies adding him/her as an equitypartner doctor, in which case, we shall adopt a Variable Committed Fee Contribution model for such anew equity partner doctor that joins us.

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Employee Doctors

Term: The agreement remains effective unless otherwise terminated by either party.

Work scope: Provision of medical services to the Group with respect to his or her medicalspecialty as an employee.


Exclusivity: Each Employee Doctor is engaged on an exclusive basis, and they shallpractise at our Medical Centres or any other locations as mutually agreed atall material times.

Service fees: A fixed base salary plus incentive profit sharing, if any.

The incentive profit sharing scheme provides that the Employee Doctor isentitled to share a percentage of any profit surplus, which is determined bythe revenue generated by the Employee Doctor over the sum of his/her ownbase salary and the direct costs associated the such revenue generated. Theprofit sharing percentage increases progressively from 25% to 55% based ondifferent thresholds.

Termination: Either party may give a written notice to the other party to terminate theagreement with no less than 3 months prior written notice.

The Group may terminate the agreement if the relevant Employee Doctor:

. commits any serious or wilful or persistent breach of the agreement,and to the extent such breach if capable of remedy fails to be remediedwithin 30 days notice from the Group;

. is guilty of dishonesty or any grave misconduct or wilful neglect in his/her performance, and to the extent such breach, if capable of remedy,fails to be remedied within 30 days notice from the Group;

. is constantly in breach of the agreement or conduct is likely to bringdisrepute to the Group;

. becomes of unsound mind, or bankrupt or subject to receivership, or isotherwise prohibited by law from fulfiling his/her duties under theagreement; or

. is convicted of any criminal office that affects his/her position in theGroup; or is guilty of such conduct, which in the Group’s opinionbrings disrepute to the Group.

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Restrictive covenants: Each of the Employee Doctors shall not:

. Unless with the prior written consent of the Company, be engaged in

any other competing business within 3 kilometres of the Group’s

clinics;

. Solicit business from of the Group’s customers or other parties that has

dealt with the Group;

. Employ any of the Group’s employees that is likely to possess the

Group’s confidential information;

. Solicit or entice away any of the Group’s employees or directors; or

. Engage in other medical practice outside his/her employment without

the consent of the Group.

We currently have five Employee Doctors and they joined us in 2020 and 2021, respectively and

work for us on an exclusive basis. As exclusive doctors, they each have an obligation to notify us and

obtain our approval if he/she provides medical services for a fee at other hospitals or locations that have

not been registered with the Group; and we are not aware of such instances or any breach of this

notification requirement during the Track Record Period and up to the Latest Practicable Date. These

Employee Doctors have no equity interest in our Group and rely on a fixed salary and the profit sharing

bonus as their primary source of income from us. During the years ended 31 March 2019, 2020 and

2021 and the six months ended 30 September 2021, the Employee Doctors’ contribution to our profit

before tax (before [REDACTED] expenses) amounted to HK$1.6 million, HK$2.9 million, HK$2.3

million and loss before tax (before [REDACTED] expenses) of HK$0.1 million, respectively,

representing 2.2%, 4.9%, 5.5% and –0.6% of our total profit before tax (before [REDACTED]

expenses), respectively.

Panel Specialists

Term: One to five years.

Work scope: Provision of medical services to the Group with respect to his or her medical

specialty as an independent contractor.

Qualifications: The specialist must be a registered specialist of the Hong Kong Medical

Council or a recognised professional body of equivalent standing which

entitles him/her to legally practise as a medical practitioner in Hong Kong,

and shall at all times maintain his/her specialist registration.

Exclusivity: All Panel Specialists are engaged on a non-exclusive basis, they shall

practise at our Medical Centres or other designated locations during times

when we require their service in order to provide flexibility to our

operations.

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Service fees: Depending on the Panel Specialist:

. 70% to 75% of the actual fees received by the Group for all medical

services provided and, if applicable, 70% to 90% of the gross profit

from sales of medication and ancillary services such as diagnostic and

laboratory tests; or

. a fee splitting arrangement with us whereby he/she shall be entitled to:

(i) for all outpatient consultations, procedures and examinations — a

profit sharing percentage that increases progressively from 50% to 80%

based on different thresholds and (ii) for all hospital income — 80% of

such income.

Termination: Either party may give a written notice to the other party to terminate the

agreement with no less than 90 days’ prior written notice.

The Group may terminate the agreement if the relevant Panel Specialist:

. breaches any terms of the agreement capable of remedy but is not

remedied within 21 days after notice provided by the Group;

. becomes incompetent, guilty of gross misconduct and/or any serious or

persistent negligence in respect of a doctor’s obligations;

. fails or refuses after written warning to carry out his/her duties

reasonably and property required;

. becomes charged, indicted or convicted of a criminal offence;

. becomes involved in a disciplinary inquiry hearing at the Medical

Council of Hong Kong or similar regulatory entity as a defendant and

sentenced; or indicted in a death inquest of a deceased who was the

doctor’s patient; or

. becomes unable to practise a medical practitioner for any reason.

Restrictive covenants: Each of the Panel Specialists shall not directly or indirectly solicit or aid any

person in soliciting any of the Group’s patients during or after the term of

the agreement; and shall indemnify the Group for all fees, costs or expenses

(including legal fees) incurred by the Group for enforcing this covenant.

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Our Panel Specialists include specialist doctors and non-doctor health specialists that work for us

on a non-exclusive basis. In addition, prior to becoming one of our Equity Partner Doctors in August

2020, we engaged Dr. Michele Yuen as a Panel Specialist. The Panel Specialists do not have any equity

interest in our Group and rely mainly on sharing from the revenue that they generate with us as their

primary source of income from us. In addition, unlike our Equity Partner Doctors, the revenue sharing

ratio derived from services provided by these doctors was approximately 70% during the Track Record

Period, and the profits that we can derive from their services are not capped at any fixed amounts.

During the years ended 31 March 2019, 2020 and 2021 and the six months ended 30 September 2021,

their contribution to our profit before tax (before [REDACTED] expenses) amounted to HK$0.4 million,

HK$1.5 million, HK$0.8 million and HK$0.3 million, respectively, representing 0.6%, 2.5%, 1.9% and

1.2% of our total profit before tax (before [REDACTED] expenses), respectively.

New Service Agreements with Founding Doctors and Equity Partner Doctors

All of our Founding Doctors and Equity Partner Doctors will enter into a new service agreement

with us, which will become effective upon the [REDACTED] (‘‘New Service Agreements’’) to (i)

extend the termination date of their existing service agreements to 31 March 2026 and (ii) pay us an

early termination fee (‘‘Termination Fee’’) should (i) any Founding Doctor or Equity Partner Doctor

terminate his/her services to us prior to 31 March 2026; or (ii) we terminate his/her services upon the

occurrence of any ‘‘termination event’’ caused by the relevant Founding Doctor or Equity Partner Doctor

(including, without limitation, (a) inability to provide medical services to the Group due to termination

or suspension of his/her medical licence; and (b) material breach of the terms of the New Service

Agreement resulting from fraud, willful default or gross negligence of the relevant doctor). With respect

to the amount of the Termination Fee, the New Service Agreements provide that (i) each of our

Founding Doctors shall pay us a termination fee equivalent to the annual average of his/her contribution

to our profit before tax for the prior three financial years prorated for the remaining term of his/her

contract and (ii) each of our Equity Partner Doctors shall pay us a termination fee equivalent to his/her

annual Committed Fee Contribution prorated for the remaining term of his/her contract. The Termination

Fee does not apply in case of death, incapacity or critical illness of the respective Founding Doctor or

Equity Partner Doctor leading to his/her inability to reasonably provide us with his/her services.

Accordingly, the key terms of the New Service Agreements for each of our Founding Doctors and

Equity Partner Doctors, including with respect to service fees, will remain the same as their existing

service agreements described above, except with respect to the extended term and Termination Fee.

During the term of the New Service Agreements, any proposed revision of the existing terms of the

New Service Agreements will be subject to and conditional upon the approval of the Shareholders. Upon

expiry of the New Service Agreements, any renewal of the New Service Agreements (whether on their

existing terms of otherwise) will also be subject to and conditional upon the approval of the

Shareholders.

Hypothetical Net Profit Taking into Account Market Compensation of Our Founding Doctors

We incurred no service fees for our Founding Doctors’ services during the Track Record Period

and up to the Latest Practicable Date. We have no plans to pay service fees to our Founding Doctors for

the foreseeable future, and as discussed above, our Founding Doctors will not be entitled to any service

fees after the [REDACTED] pursuant to the New Service Agreements.

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The service fees and salaries paid to our other specialist doctors during the Track Record Period,including Equity Partner Doctors, Employee Doctors and Panel Specialists were all fair and reasonableand were either in-line with or exceeded the market rate in Hong Kong for such doctors based on theirrespective qualifications, specialisation, experience and level of seniority. The service fees and salariesfor these doctors were negotiated on an independent arms-length basis in order to retain these highlyskilled and experienced medical practitioners.

According to the Frost & Sullivan Report, the market rate of service fees in Hong Kong forspecialist doctors with similar qualifications, specialisation, experience and level of seniority as ourFounding Doctors, was approximately 60% of the profit before tax generated by such doctors. Based onthe service fee ratio of 60%, the hypothetical net profit attributable to owners of the Company (adjustedby adding back [REDACTED] expenses) during the Track Record Period would be as follows:

Year ended 31 March

Six monthsended

30 September20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

Net profit attributable to owners of theCompany for the period (audited) 59,960 50,194 21,643 15,270

Subtract: Hypothetical additional servicefees for the Founding Doctors net ofincome tax(1) (29,638) (23,163) (10,862) (5,746)

Add: [REDACTED] expenses — — 14,317 4,621

Hypothetical net profit attributable toowners of the Company(1) 30,322 27,031 25,098 14,145

Note:

(1) The hypothetical additional service fees and hypothetical net profit are for illustrative purposes only, and do not reflect theactual amount of net profit attributable to owners of the Company during the Track Record Period under HKFRS.

The hypothetical additional service fees for the Founding Doctors net of income tax is based on the profit before tax of theFounding Doctors multiplied by 60%. The corporate income tax rate of 16.5% for Hong Kong was used to calculate the netof income tax figure. The profit before tax for the Founding Doctors was determined by deducting from their revenue,relevant costs and expenses so allocated to them. Direct costs were allocated based on costs incurred for the FoundingDoctors and their staff, whereas shared direct expenses, such as depreciation of right-of-use assets for the Medical Centres,were allocated based on the floor area attributable to the Founding Doctors; while other direct costs relating to sellingexpenses and administrative expenses, such as corporate office and staff costs, were allocated with reference to theshareholding percentage held by all doctors.

OUR SUPPLIERS

Our suppliers primarily include pharmaceutical manufacturers and distributors as well aslaboratories and imaging centres.

Pharmaceutical Manufacturers and Distributors

Our pharmaceutical suppliers mainly include manufacturers and distributors of pharmaceuticals.We do not enter into long term supply agreements with such suppliers and there is no minimumpurchase commitments under our contracts. Orders are placed on an as-need basis. The credit andpayment terms granted by our pharmaceutical suppliers are generally between 30 and 60 days.

When selecting our suppliers, we perform assessment based on various criteria, including qualityand source of products, reputation in the industry, price and delivery time. For details on the qualitycontrol measures we imposed on the products we procured, please refer to ‘‘— Quality Control andComplaint Handling’’.

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The pharmaceuticals used by us are produced by different manufacturers under different brands. Inthe event that any of the existing pharmaceutical suppliers is no longer able to provide supplies to ourGroup, we believe that we will be able to identify suitable substitute pharmaceutical suppliers in atimely manner.

We have put in place inventory control measures to control our supplies procurement processes,post-delivery management and maintain a stable level of inventory for our daily operations. For details,please refer to ‘‘— Inventory Control’’. During the Track Record Period, we did not encounter anydifficulty, shortage or quality issues with our pharmaceutical suppliers or the products we procured fromthem that could materially and adversely affect our business operations.

Laboratories and Imaging Centres

During the Track Record Period, our suppliers also included third party laboratories and imagingcentres, which provide services such as X-ray, CT Scan, MRI, as well as blood and other specimentesting. Typically, fees are prepaid by the patients to us, and we will in turn pay the third party suppliersfor the services rendered. To ensure the quality and efficiency of the services provided by laboratoriesand imaging centres to us, we select them by considering their scope of service, the quality of theirservices and the convenience of their locations. After our acquisition of Hong Kong Imaging in October2019, we normally rely on third party laboratories and imaging centres only to the extent Hong KongImaging does not provide such services.

Major Suppliers

During the Track Record Period, our top five suppliers were pharmaceutical distributors, andlaboratories and imaging centres located in Hong Kong. For the years ended 31 March 2019, 2020 and2021 and the six months ended 30 September 2021, purchases from our single largest supplier, whichwas a provider of pharmaceutical products, amounted to HK$15.8 million, HK$20.1 million, HK$20.8million and HK$12.8 million, respectively, representing 33.9%, 33.4%, 35.9% and 41.3% of our totalpurchase costs, respectively. For the years ended 31 March 2019, 2020 and 2021 and the six monthsended 30 September 2021, purchases from our five largest suppliers amounted to HK$37.1 million,HK$47.0 million, HK$49.1 million and HK$26.9 million, respectively, representing 79.6%, 78.1%,84.8% and 86.4% of our total purchase costs, respectively.

The tables below set out certain details of our five largest suppliers during the Track RecordPeriod:

For the year ended 31 March 2019

Rank Supplier BackgroundPurchaseamount

% of ourtotal

purchaseProducts/Services

purchasedLength ofrelationship

(HK$’000)

1 Supplier A Supplier of pharmaceuticalproducts

15,772 33.9% Pharmaceuticalproducts

Since November2013

2 Supplier B Supplier of pharmaceuticalproducts


Since November2013

3 Supplier C Supplier of pharmaceuticalproducts


Since October2017

4 Hong Kong Imaging Provision of diagnostic and

laboratory services

2,227 4.8% Diagnostic and

laboratoryservices

Since November

2013

5 Supplier D Provision of professional medical

services

1,308 2.8% Diagnostic and

laboratoryservices

Since December

2018

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% ofour totalpurchase

Products/Servicespurchased

Length ofrelationship

(HK$’000)

1 Supplier A Supplier of pharmaceutical products 20,065 33.4% Pharmaceutical products Since November 20132 Supplier B Supplier of pharmaceutical products 12,860 21.4% Pharmaceutical products Since November 20133 Supplier C Supplier of pharmaceutical products 10,863 18.1% Pharmaceutical products Since October 20174 Supplier E Supplier of pharmaceutical products 1,756 2.9% Pharmaceutical products Since May 20175 Hong Kong Imaging Provision of diagnostic and

laboratory services1,473 2.4% Diagnostic and

laboratory servicesSince November 2013




Products/Servicespurchased


(HK$’000)

1 Supplier A Supplier of pharmaceutical products 20,790 35.9% Pharmaceutical products Since November 20132 Supplier C Supplier of pharmaceutical products 11,526 19.9% Pharmaceutical products Since October 20173 Supplier B Supplier of pharmaceutical products 10,256 17.7% Pharmaceutical products Since November 20134 Supplier F Provision of laboratory services 5,100 8.8% Laboratory services Since December 20185 Supplier E Supplier of pharmaceutical products 1,473 2.5% Pharmaceutical products Since May 2017

For the six months ended 30 September 2021



Product/Servicespurchased


(HK$’000)

1 Supplier A Supplier of pharmaceutical products 12,837 41.3% Pharmaceutical products Since November 20132 Supplier C Supplier of pharmaceutical products 5,136 16.5% Pharmaceutical products Since October 20173 Supplier B Supplier of pharmaceutical products 5,039 16.2% Pharmaceutical products Since November 20134 Supplier F Provision of laboratory services 2,974 9.6% Laboratory services Since December 20185 Supplier E Supplier of pharmaceutical products 867 2.8% Pharmaceutical products Since May 2017

To the best knowledge and belief of our Directors, except for Hong Kong Imaging, our five largest

suppliers during the Track Record Period were Independent Third Parties and none of our Directors or

their close associates or any Shareholders (which to the best knowledge of our Directors beneficially

own more than 5.0% of our Shares) had any interests in any of our top five suppliers during the Track

Record Period. The purchase amounts for Hong Kong Imaging as set out in the above tables were for

purchases made before our acquisition of Hong Kong Imaging in October 2019. During the Track

Record Period, none of our Group’s major suppliers was also one of our Group’s major clients.

OUR CLIENTS

During the Track Record Period, our clients primarily consisted of individual clients and corporate

clients for our medical services; and medical practitioners for our medical management services. Our

individual clients represented a significant portion of our client base and the amount of revenue

generated from them represented 92.6%, 91.1%, 93.1% and 96.6% of our total revenue for the years

ended 31 March 2019, 2020 and 2021 and the six months ended 30 September 2021, respectively. For

the same periods, revenue generated from our corporate clients represented 5.6%, 7.8%, 8.1% and 5.8%

of our total revenue, respectively. Revenue generated from medical management services represented

1.7%, 1.9%, 1.8% and 1.4% of our total revenue for the years ended 31 March 2019, 2020 and 2021 and

the six months ended 30 September 2021, respectively.

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Individual clients generally settle their own medical payments by cash or cash equivalent, and theirpayments include (i) where they are not covered by any medical scheme or insurance plan, the feeincurred for the consultation and treatment received and (ii) where clients are under a medical scheme orinsurance plan, the co-payment amount for the treatment received as required under the scheme.

We generally enter into contractual arrangements with corporate clients including medical schemesand insurance companies, who settle medical payments for their policy members or staff members whoare our patients. Medical scheme and insurance companies structure and administer corporate healthcarebenefit plans to their members. We provide these members with medical and allied health services.Under our service contracts with the medical schemes and insurance companies, we offer services totheir members in return for a service fee at an agreed rate based on the number of treatments to bereceived. A credit term of up to six months is generally granted to medical schemes and insurancecompanies.

Medical practitioners generally settle their management service fees on demand after we invoicethem, which is on a quarterly basis.

Major Clients

For the year ended 31 March 2019, our single largest client was an individual patient and therevenue generated from this patient was HK$8.1 million, representing 4.2% of our total revenue duringthe year. For the year ended 31 March 2020, our single largest client was an insurance provider, and therevenue generated from this corporate client was HK$8.2 million, representing 3.3% of our total revenueduring the year. For the year ended 31 March 2021, our single largest client was an insurance provider,and the revenue generated from this corporate client was HK$8.9 million, representing 3.5% of our totalrevenue during the period. For the six months ended 30 September 2021, our single largest client was aninsurance provider, and the revenue from this corporate client was HK$3.9 million, representing 2.4% ofour total revenue during the period.

For the years ended 31 March 2019, 2020 and 2021 and the six months ended 30 September 2021,revenue from our five largest clients, included individual and corporate clients, and doctors that weprovided medical management services to, amounted to HK$16.9 million, HK$18.0 million, HK$18.9million and HK$9.0 million, respectively, representing 8.7%, 7.3%, 7.5% and 5.4% of our total revenue,respectively.

To the best knowledge and belief of our Directors, all of our five largest clients during the TrackRecord Period were Independent Third Parties and none of our Directors or their close associates or anyShareholders (which to the best knowledge of our Directors beneficially own more than 5.0% of ourShares) had any interests in any of our five largest clients during the Track Record Period. During theTrack Record Period, none of our major clients was also one of our major suppliers.

Client Relationship Management

We aim to offer comprehensive and personalised healthcare services to our clients based on theirspecific needs and treatment options. To this end, our nurses and other medical assistants are trained tobe client-care managers, and play a crucial role in promoting client satisfaction by ensuring that theirneeds are properly addressed. In our daily operations, when we are first approached by potential clients,our client-care managers can help answer enquiries and understand their specific needs. If they decide toreceive healthcare services from us, our client-care managers can arrange appointments for medicalservices at our Medical Centres or for inpatient admission as applicable. They also provide assistancepertaining to any necessary administrative procedures regarding inpatient admissions at private hospitals,liaise with our specialists and allied health professionals, arrange subsequent follow-up consultations andhandle any peripheral requests that clients may have. Placing strong emphasis on client relationship

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management allows us to provide client-centred and personalised healthcare services. Designating ourclient-care managers on client relationship management also alleviates the workload of our medicalpractitioners and allows them to focus on providing quality healthcare services.

Pricing

Our clients mainly include people seeking the best quality medical care and services. To compete

effectively with other medical care service providers in the market, we position our medical services tobe mid-to-high end in terms of our pricing. Our medical service fees primarily include consultation fees,

medication fees, treatment fees and laboratory and diagnostic fees.

When determining our rates chargeable to our individual clients, our management takes intoaccount various factors such as (i) market price range charged by our competitors, (ii) operating costs,

(iii) time costs and complexity of the treatment, (iv) the type of specialty involved and (v) the level ofseniority of our medical practitioners as well as the following factors:

. for consultation fees: cost-plus basis of our cost in engaging members of our medical and

allied health service team;

. for medication fees: the reference retail price of the pharmaceutical drugs, price charged bydistributors for the pharmaceutical drugs, and relevant administration costs;

. for treatment fees: determined based on the risk and complexity in delivering the procedures,

the materials and equipment involved, time required for delivering the treatment and the

number of treatments involved; and

. for laboratory and diagnostic fees: cost-plus basis which covers Hong Kong Imaging or thirdparty laboratory and diagnostic costs as well as our administration costs.

Subject to the final approval of our senior management team, our charging rates are revised

periodically with reference to the market rates. When there is an increase in the price of thepharmaceutical drugs, we are generally able to pass on the cost increase to our clients by price

adjustment.

For our corporate clients, subject to negotiation, we may offer a discount as compared to feeschargeable to individual clients for certain medical schemes and insurance companies.

For our management service fees, we generally adopt a cost-plus basis of our cost in providing

such management services.

CASH AND CREDIT MANAGEMENT

Our corporate clients generally settle their fees by way of bank transfers or cheque. For patients

who receive medical services from us under the policies provided by our corporate clients, we will seekpayments directly from the relevant medical scheme and insurance companies. In such instance, fees

receivable from medical scheme and insurance companies are settled by bank transfer or cheques with acredit period of up to six months after our date of invoice.

For revenue generated from our clients’ stay at the private hospitals, payments from these clients

will be collected by the respective hospitals on behalf of us and such hospitals will generally transfer theamount to us via bank transfer within 60 days. Our finance department reconciles between the bank

statements and hospital statements of our medical practitioners on a monthly basis to check if there areany irregularities in the income records.

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Most of our individual clients settle their medical payments by way of credit card or other

electronic means (such as EPS and Alipay), and occasionally we receive cash payment. As part of our

cash handling policy, all cash received from our clients is kept in the locked cabinet in the drug

dispensing counter or cashier at each of our Medical Centres and Diagnostic Centres. Our finance

department personnel and receptionists are responsible for performing a daily check on the amount of

cash against the payment record in our information technology system and reconcile any inconsistency.

After confirming all amounts are correct, the cash received at our Medical Centres and Diagnostic

Centres will be deposited to our bank account by our finance team.

MARKETING

We are subject to certain professional and ethical guidelines prescribed by the Medical Council in

respect of advertising and promotion of medical practice and services by medical practitioners. We

believe that a significant number of clients come to us on account of our brand and reputation and

referrals from our former or existing clients. Medical practitioners are generally prohibited from

promotion of the medical practice through advertisements. For details, please see the section headed

‘‘Regulatory Overview — Overview of Hong Kong Laws and Regulations — Undesirable Medical

Advertisements Ordinance (Chapter 231 of the Laws of Hong Kong)’’.

While our medical practitioners are subject to certain prohibition from promotion of their

individual medical practice, our Group plans to grow by enhancing our reputation through covering

additional medical specialties, providing medical concierge services and exploring business opportunities

with more corporate clients. Our Directors believe that our business strategies would further strengthen

our position as a highly recognised specialty medical platform in Hong Kong.

Referral Model

We believe our business is dependent on our brand and reputation, which in turn comes from the

quality of healthcare services that our experienced medical practitioners provide. Leveraging our

reputation and expertise in certain specialties, previous and existing patients refer clients to us and third-

party general practices or specialist doctors also refer their patients to us for targeted diagnosis and

treatment. In addition, our medical platform allows our services to complement each other and creates

synergistic benefits. For example, our specialist doctors in one specialty can refer their patients to our

other specialist doctors when necessary, and can refer patients to our allied health services, including

imaging and diagnostic procedures. We do not receive or pay referral fees, and the service fees that our

specialist doctors receive do not vary based on whether the patient is referred to that doctor from a

third-party or internally. Accordingly, the service fee to a specialist doctor includes only the revenue

generated by the services provided by such doctor.

For clients who require further management, surgeries and other inpatient services, we can arrange

for private hospital admissions and our doctors will provide consultations, treatments or surgeries to our

clients at the private hospital. Where necessary, our allied health services could also facilitate our

clients’ rehabilitation after clients are discharged from hospitals. We believe this allows us to provide

comprehensive care to our clients and enhance their overall wellbeing.

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The following chart sets out the relationship among our various service streams during the Track

Record Period:

At our Medical and Diagnostic Centres At private hospitals

Our specialistmedical services

3rd party general or specialist practice

Allied healthservices

(Client relationshipManagement)

Referral Referral

Arrange follow-up consultation

Inpatient servicesArrange hospital admission

COMPETITION

The private healthcare service industry in Hong Kong is highly competitive and fragmented.

According to the Frost & Sullivan Report, there were over 3,000 private healthcare service providers in

Hong Kong registered with the Department of Health in 2020. In general, leading private healthcare

providers compete based on their ability to: (i) recruit and retain talented medical practitioners with

substantial professional training, qualification, medical knowledge and clinical experience, (ii) open

medical centres in prime locations and (iii) provide a wide variety of medical services under different

specialties through their widespread network of medical centres, in particular in term of specialty

services. According to the Frost & Sullivan Report, there is likely to be an increasing trend of

consolidation among independent medical centre operators. For a discussion on the landscape of the

Hong Kong medical industry, please see the section headed ‘‘Industry Overview’’.

We believe we are well positioned to capitalise on the growth in this industry through our existing

platform of resources and capabilities. We intend to leverage our leading position, extensive service

spectrum, established brand and reputation with renowned specialist doctors, and experienced

management team to continue to be one of the leading private multi-specialties medical centre operators

in Hong Kong.

QUALITY CONTROL AND COMPLAINT HANDLING

Providing quality healthcare services is one of our Group’s management priorities. To this end, we

have established a medical committee and have adopted quality assurance and enhancement measures for

our medical and allied health service team and our staff to ensure standard operation procedures for our

services. As at the Latest Practicable Date, we have established more than 70 standard operation

procedures in relation to the operations of our pharmacy, oncology, administration and clinics. We

believe prioritising quality training and adoption of standard operation procedures within our Group

could strengthen our position in the market.

Our Medical Committee is led by Dr. Adam Leung, and includes selected senior doctors and the

director of operations; and is responsible to establish and implement internal policies and review

medical complaints and ensure client satisfaction. The Medical Committee, along with our operational

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personnel, established and implemented internal policies and standard operations procedures to reduce

operational risk and to oversee our internal controls. Our Medical Committee with the assistance of the

human resources department, reviews our established standard operations procedures periodically and

conducts update of our internal guidelines and policies governing various aspects of our operations,

including but not limited to medical centre operation procedures, handling of dangerous drugs, inventory

control and clinical waste disposal. In addition, from time to time, the Medical Committee launches

experience sharing sessions to our medical and allied health service team and staff on the development

and implementation of quality control measures as well as discusses and reviews the quality control

measures of our Medical Centres. Our Medical Committee upholds standards and regularly

communicates and discusses important issues from update of key medical development to daily

operation issues in order to continuously enhance the quality of service provided by our medical and

allied health service team and staff.

As a measure to enhance service quality, our Medical Committee has set up an efficient complainthandling mechanism whereby any complaints are recorded by our client-care managers. We have alsoplaced questionnaires in relation to our service quality at the reception of each Medical Centre for ourpatients to provide feedback. Complaints concerning our medical and allied health service team will bereported to the Medical Committee for follow-up. The Medical Committee and other personnel will theninvestigate the incident and suggest solutions to implement and prevent reoccurrence. For serious cases,we may seek legal counsel.

During the Track Record Period and up to the Latest Practicable Date, we have not received anymaterial claims or complaints with respect to our medical services provided to clients.

MEDICAL PRACTITIONERS AND EMPLOYEES

As at the Latest Practicable Date, we had 137 medical practitioners and employees in Hong Kong,who work for us on exclusive and non-exclusive basis. The table below sets out a breakdown of ourmedical practitioners and employees by function as at the Latest Practicable Date:

Executive Directors and senior management(1)(2) 7Specialist doctors (excluding doctors who are also our executive Directors

and/or senior management)(3) 15Panel Specialists(3) 13Radiologists, radiographers and MRI specialists 7Nurses and healthcare assistants 37Pharmacists and Dispensers 7Finance and accounting, human resources and administration(2) 19Others(4) 32

Total 137

Notes:

(1) Two of our executive Directors and senior management are also our specialist doctors. They are Dr. Kenneth Tsang and Dr.Adam Leung.

(2) Two members of our senior management are also our staff who is responsible for overseeing (i) human resources andadministration and (ii) accounting and finance, respectively.

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(3) Our Founding Doctors, Equity Partner Doctors and Panel Specialists are independent contractors and are not employees

under our service agreements with them.

(4) Include support staff such as receptionists, secretaries, janitors and drivers.

We offer our employees remuneration packages based on their experience and position. Generally,

remuneration to all our employees comprises basic salary, performance-based incentive bonus and

medical benefits. For a discussion of the compensation arrangements with our specialist doctors and

Panel Specialists, refer to ‘‘— Our Professional Team — Compensation arrangements with our Specialist

Doctors and Panel Specialists’’. Our Medical Committee is responsible for the recruitment of new

specialists and other healthcare professionals. We recruit personnel from the open market and we

formulate our recruitment policy based on market conditions, our business demand and expansion plans.

Our Medical Committee periodically reviews our employees’ performance. To enhance the quality of our

services, we adopt standard assessment criteria when selecting our Group’s professional team members

including specialist doctors, allied healthcare practitioners and registered and enrolled nurses, which take

into account a number of factors such as experience, skills and competencies. We assess their credentials

and suitability through interviews and provide regular training upon hiring.

Our Training Systems and Knowledge Management

The Hong Kong Academy of Medicine imposes mandatory continuous education requirements on

medical practitioners practising in Hong Kong. Other professional bodies such as those for psychologists

and therapists impose certain continuous education requirements for their respective fields or encourage

them to obtain continuous education on a voluntary basis. Our medical practitioners fulfil such

requirements by attending external conferences or training programmes. Newly recruited medical

practitioners would be under supervision of the Medical Committee for the first 6 months after joining

our Group to help them familiarise themselves with our service standards, policies and procedures. We

provide written guidelines, instruction manuals, internal training, on-the-job guidance to our client-care

managers and newly recruited healthcare assistants.

We also believe that it is crucial to cultivate and foster a culture of knowledge sharing among the

professionals that encourage discussion and sharing of expertise and experience as well as exchange of

clinical findings in different areas at expertise. We strive to be a learning organisation that facilitates the

continuous learning of our medical and allied health service team. To this end, we hold regular

knowledge sharing sessions among our specialists. We place great emphasis and encourage our medical

and allied health service team and staff to attend internal and external training programmes. Through

these regular peers learning sessions and external seminars, our medical and allied health service team

can keep abreast of the latest development in various specialties and in turn allow them to provide

quality healthcare solutions to our clients.

INVENTORY CONTROL

Our inventory typically consists of pharmaceuticals and clinical supplies and is stored at our

Medical Centres. We carry out regular physical inventory taking and assessments to verify the accuracy

of our inventory record. We closely monitor the pharmaceutical expiry dates to minimise the risk of

dispensing expired items. We maintain strict control over inventory and have implemented an inventory

control policy to meet procurement needs. The objective of such policy is to provide guidelines to our

staff in the management and control of inventory including safeguarding and disposal of inventory, to

eliminate any potential misuse and misappropriation of inventory as well as to control the cost of

pharmaceutical drugs.

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In addition, we have implemented and imposed strict safety guidelines for dispensing procedures

and the storage of pharmaceutical drugs. Our pharmacists play an important supervisory role in the drug

ordering and dispensing process, which includes checking the identity and dose of the specific drug

against the prescription, and are responsible for proper storage and keeping records of the stock of our

pharmaceutical drugs. Information is provided to doctors regularly to remind them of the appropriate

usage/dosage of vaccine/drugs to patients. We regularly review our measures and policies in relation to

the prevention of medical incidents, which covers dispensary and dangerous drug management.

Our doctors are subject to the Code of Professional Conduct issued by the Medical Council, which

include the Guidelines on Proper Prescription and Dispensing of Dangerous Drugs (‘‘PrescriptionGuidelines’’). Only licensed medical practitioners (i.e. doctors) can legally prescribe prescription

medicine to patients in Hong Kong. Our pharmacists and dispensers are also familiar with the

Prescription Guidelines and help ensure that the drugs prescribed by our doctors are dispensed correctly,

and they would consult with the prescribing doctor, as necessary, to ensure the prescription and dosage

is accurate or appropriate. Upon receipt of a prescription issued by our specialist doctors, our licensed

pharmacists would review the prescription to ensure the prescription and any drug combinations are

appropriate and safe by verifying the patient’s record as well as drug indications and interactions. Our

pharmacists freely communicate with our specialist doctors to ensure the prescription is appropriate. Our

doctors and pharmacists follow the Prescription Guidelines, which require that dangerous drugs (such as

psychoactive substances with known potential for abuse) be prescribed with due caution in order to

avoid misuse or patient dependence. Dangerous drugs are prescribed only after proper clinic assessment

and diagnosis and only in amounts within the range of therapeutic dosage and limited to such duration

as necessary for proper treatment of the patient. Our doctors keep adequate and proper medical records

of the patient and evaluate their treatment history to help avoid stock piling, resale or other

inappropriate uses by the patient; and require regular follow-up assessments of patients that are provided

with dangerous drugs. These controls help mitigate the risk of over-prescription of drugs, especially

dangerous drugs, to our patients. Since the founding of our business, we have not received any

complaints from any patients or the Medical Council or any other professional body that our specialist

doctors have ‘‘over-prescribed’’ medicine.

During the Track Record Period and as at the Latest Practicable Date, we were in full compliance

with the applicable laws and regulations in relation to the storage of pharmaceuticals and medical

supplies in all material aspects. During the Track Record Period and up to the Latest Practicable Date,

we had not experienced any significant write-offs of our inventory.

FACILITY MANAGEMENT

We understand that facility management is essential for our Group to maintain a clean and healthy

environment at our medical centres. Effective management of our medical facilities is crucial to ensure

imminent and efficient response to service requests and minimum interruption to our operations for

scheduled maintenance.

We have implemented strategic management on our facilities that help to extend asset life of our

medical facilities, track and lower maintenance costs, prevent and predict equipment failures, improve

labour productivity and reduce costly downtimes. We have also set up maintenance procedures for

managing medical facilities and equipment at each of our medical centres.

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INFORMATION TECHNOLOGY

Our operations rely on the efficiency of our information technology system. Our informationtechnology system is designed for recording data of our patients, internal control and workflowprocedure and assists the management of our Medical Centres and Diagnostic Centres. The systemmanages various facets of our operations, for instance, appointment booking, client registration,prescriptions, billing and the management of our clients’ other data. It also has regular automatic datasetbackup and is designed to ensure the security of our client’s information. The system also maintainsdetailed information regarding each of the pharmaceutical drugs in our inventory.

DATA PRIVACY MANAGEMENT

In view of the importance of maintaining confidentiality of personal information of our patients,we implement appropriate levels of access control rights for our medical and allied health service teamand staff as security shields for computer systems to safeguard our patients’ medical records andpersonal information. Our patients’ medical records and personal information are not connected with theInternet in order to uphold the security of data collected by us. We regularly review and strengthen theintegrity of our system security.

We also seek our patients’ consent before collecting their personal data and other information suchas past medical history and known drugs allergies. Our information and data protection policy, whichgoverns the collection, transfer, and subsequent processing of data, ensures that our medical and alliedhealth service team and our staff would properly handle, store and dispose information relating to ourpatients.

All patients’ medical records, reports, medical laboratory and other diagnostic reports are notallowed to be disclosed to the public. When the medical records of a patient are required to be obtainedby a third party such as medical practitioners outside our Group (or non-referring doctors with respect toHong Kong Imaging), a written consent with our patient’s signature must be obtained prior to disclosureto ensure that no unauthorised person has access to the medical records.

ENVIRONMENTAL, SOCIAL RESPONSIBILITY AND GOVERNANCE

We are subject to various laws and regulations in Hong Kong in relation to environmental matterswith respect to disposal of clinical waste according to the Waste Disposal Ordinance (Chapter 354 of theLaws of Hong Kong) and the Waste Disposal (Clinical Waste) (General) Regulation (Chapter 354O ofthe Laws of Hong Kong). For further information on the relevant laws and regulations, please see thesection headed ‘‘Regulatory Overview — Overview of Hong Kong Laws and Regulations — WasteDisposal Ordinance (Chapter 354 of the Laws of Hong Kong)’’.

We have established policies to ensure that we meet the statutory requirements in relation toenvironmental matters and the disposal of clinical waste. We believe that we are in compliance in allmaterial respects with applicable environmental regulations in Hong Kong. During the Track RecordPeriod and as at the Latest Practicable Date, we had engaged qualified service providers in Hong Kongfor the disposal of clinical waste. During the Track Record Period and up to the Latest Practicable Date,we have not received any material fines or penalties associated with the breach of any environmentallaws or regulations.

We value utilising our resources efficiently and encourage energy, water and resourcesconservation at our workplace. To this end, we issue written guidelines and encourage our staff toimplement energy-efficient measures such as double-sided printing, turning off unused room appliancesand maintaining optimal temperature when air conditioners are in use.

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We also value social responsibility and are devoted to educating the general public to bringawareness to different aspects of health management. To this end, we from time to time hold educationalseminars for the public to bring awareness about the prevention and early detection of different healthconditions.

We do not tolerate any corruption, fraud and other behaviours violating work ethics or in breach ofthe Prevention of Bribery Ordinance (Chapter 201 of the Laws of Hong Kong). We value and upholdintegrity, honesty and fairness in how we conduct business. All employees should decline an offer ofadvantage if acceptance of it could affect their objectivity in conducting our business. Employees will besubject to disciplinary actions for their misconduct including verbal or written warnings, demotion anddismissal, and the case may be reported to law-enforcement authorities for possible prosecution,depending on the situation.

In addition to this, we have implemented a whistleblowing policy. This policy allows all ouremployees to report any possible improprieties, misconducts, malpractices or irregularities. Reports andcomplaints received will be handled in a prompt and fair manner. Such policy also aims at protectingwhistleblowers from unfair dismissal, victimisation and unwarranted disciplinary actions. To the bestknowledge of our Directors, during the Track Record Period and as at the Latest Practicable Date, wedid not have any litigation involving the allegation of corruption of our Group or our employees, and wewere not aware of any material non-compliance with laws and regulations relating to bribery, extortion,fraud and money laundering in Hong Kong.

IMPACT OF OUTBREAK OF COVID-19 ON OUR BUSINESS

We are engaged in the provision of medical services and management services in Hong Kong andsubstantially all of our revenue is generated from clients located in Hong Kong during the Track RecordPeriod. An outbreak of respiratory illness caused by the novel coronavirus (COVID-19) first emerged inlate 2019 and continues to expand globally. As at the Latest Practicable Date, COVID-19 had spreadglobally with the death toll and number of infected cases continuing to rise. In response to the outbreakof COVID-19, the Hong Kong government has taken since February 2020 a number of actions such astemporarily closing government offices and public facilities, restricting travel internationally, includingbetween Hong Kong and Mainland China, tracing, quarantining and otherwise treating individuals inHong Kong who had contracted COVID-19, requiring residents to wear masks, asking residents toremain at home and to avoid gathering in public, among other actions. The outbreak of COVID-19 inHong Kong has also resulted in the temporary closure of many corporate offices and retail stores.

Since February 2020, we have introduced enhanced hygiene and precautionary measures across ourMedical Centres and Diagnostic Centres to ensure the safety of all our medical practitioners, staff andpatients. A set of standard operating procedures was developed and implemented, and internal trainingwas provided to all relevant personnel. For details of these measures, please refer to ‘‘— OccupationalHealth and Safety’’.

From February 2020 to July 2020, the number of patient visits at our Medical Centres andDiagnostic Centres as well as in-patient admissions at private hospitals for which our specialist doctorsprovide medical services, have, on average, decreased mainly due to the COVID-19 outbreak along withthe related delays in seeking non-urgent medical treatment, travel restrictions and the slowdown in theHong Kong economy. For a more detailed discussion on the impact the COVID-19 outbreak had on ourbusiness, please see the section headed ‘‘Financial Information — Recent Developments and MaterialAdverse Change — Impact of COVID-19’’.

BUSINESS

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OCCUPATIONAL HEALTH AND SAFETY

We are subject to the health and safety requirements under Hong Kong law. As such, we haveinternal policies and systems in place designed with a view to implement and ensure strict compliancewith such requirements. We provide written guidelines to our staff on health and safety-relatedrequirements, such as handling medical equipment and clinical wastes. During the Track Record Periodand up to the Latest Practicable Date, we did not experience any material accidents in the course of ourbusiness operations.

In view of the outbreak of COVID-19 in Hong Kong, we have implemented enhanced hygiene andprecautionary measures at our Medical Centres and Diagnostic Centres, which include:

. Temperature screening at entry of centres;

. Requiring clients to answer questions on travel and recent activities;

. Placing hand sanitising products in our centres;

. Regularly cleaning and disinfecting our centres;

. Provision of face masks to employees and clients;

. Promoting personal hygiene among our employees and clients.

Accordingly, all employees are required to familiarise themselves with requirements of ourcontingency plan for pandemic outbreak and ensure that all measures are properly implemented.

INSURANCE

We have purchased and maintain insurance to cover, among others, employees’ compensation,property, public liability, medical malpractice liability and medical insurance for our employees. Wealso ensure our medical practitioners purchase their own medical liability insurance.

We are of the view that the insurance policies maintained are adequate for our existing businessand operations and in-line with the industry norm. We will review and procure the necessary additionalinsurance coverage as and when the need arises. During the Track Record Period and up to the LatestPracticable Date, we did not make any material claims under our insurance policies. For the years ended31 March 2019, 2020 and 2021 and the six months ended 30 September 2021, our insurance expenseswere HK$0.5 million, HK$0.4 million, HK$0.6 million and HK$0.3 million, respectively.

INTERNAL CONTROL AND RISK MANAGEMENT

Our Medical Committee is responsible for establishing our internal control system and reviewingits effectiveness. In accordance with the applicable laws and regulations, we have established proceduresfor developing and maintaining our internal control system, covering areas such as corporategovernance, operations, management, legal, finance and audit. We believe that our internal controlsystem is sufficient in terms of comprehensiveness, practicability and effectiveness for our currentbusiness operation. We have also established a set of comprehensive risk management policies andmeasures to identify, evaluate and manage risks arising from our operations.

In terms of day-to-day operations, we strictly follow labelling guidelines as required under theapplicable laws and regulations to ensure that human errors in drugs dispensary are minimised. We havealso established a stringent quality control system and complaint handling mechanism to ensure that weproactively minimise operational risks and promptly handle client complaints when they arise. Fordetails, please see ‘‘— Quality Control and Complaint Handling’’.

BUSINESS

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PROPERTIES

As at the Latest Practicable Date, we have leased eight properties in Hong Kong for our operationswith an aggregate GFA of approximately 31,787 sq.ft. Our leased properties have a lease term rangingfrom 3 months to 6 years. As at the Latest Practicable Date, our total rental expenses wereapproximately HK$2.4 million per month. The following table provides a list of our leased properties asat the Latest Practicable Date.

Address UsageApproximate

GFA

(sq.ft.)

1. Integrated Flagship Medical Centre(1)

Suite 901, Central Building,1–3 Pedder Street, Central, Hong Kong

Medical centre 16,282

2. HKMC IIRoom 1202, Central Building,1–3 Pedder Street, Central, Hong Kong

Medical centre 2,092

3. HKMC Psychiatric CentreRoom 306, Central Building,1–3 Pedder Street, Central, Hong Kong

Medical centre 300

4. HKMC Group13/F, Pacific House,20 Queen’s Road Central, Hong Kong

Central administration office 3,690

5. Imaging and Cardiovascular CentreSuite 515–519, 5th Floor,Central Building,1–3 Pedder Street, Central, Hong Kong

Imaging and test centre 3,003

6. MRI CentreUnit 703, Euro Trade Centre,21–23 Des Voeux Road Central,Central, Hong Kong

Imaging centre 1,500

BUSINESS

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Address UsageApproximate

GFA

(sq.ft.)

7. Medical Laboratory CentreSuite 901–902, 9/F, Silver Fortune Plaza,1 Wellington Street, Central, Hong Kong

Laboratory centre 1,700

8. Staff Quarters(2)

Villa Cecil, 216 Victoria Road,Pok Fu Lam, Hong Kong

Residential 3,220

Notes:

(1) On 1 February 2021, we started a new lease agreement for suite 901 consisting of the entire office space on the 9th floor of

Central Building, 1–3 Pedder Street, Central, Hong Kong for a term of six years and expiring on 31 January 2027. This newoffice space has approximately 16,282 sq.ft. and we have relocated our HKMC I, HKMC III and HKMC Paediatric Centre(which were located on the 8th and 5th floors in the same building) and HKMC Geriatric Medicine Centre (which was

located at Manning House, Central) to this new office on the 9th floor in June 2021. As a result of this move, our rentalexpenses has increased by approximately HK$1.0 million per month after the relocation.

(2) During the Track Record Period and as at the Latest Practicable Date, we leased one residential property in Hong Kong withlease term of two years as our staff quarters, with rental expense of HK$85,000 per month for use by one of our FoundingDoctors representing benefit-in-kind for director fees for one of our subsidiaries.

On 31 March 2021, we purchased from an Independent Third Party the entire 6th floor of Euro

Trade Centre, Central, Hong Kong with GFA of approximately 5,200 sq.ft. at a purchase price of

HK$150.0 million, which will be used as our Integrated Diagnostic Centre (the ‘‘Property Purchase’’).With respect to the Property Purchase, we paid HK$75.0 million in cash and financed the remaining

HK$75.0 million through a mortgage loan. The mortgage loan will be repaid with the [REDACTED]

from the [REDACTED], please see section headed ‘‘Future Plans and [REDACTED]’’ for details. We

were also responsible for paying for our portion of real estate agent commissions of HK$1.5 million and

Hong Kong stamp duties of HK$12.8 million.

PROPERTY INTERESTS AND PROPERTY VALUATION

Knight Frank Petty Limited, an independent property valuer, has valued our property interests as at

30 September 2021 and is of the opinion that the total market value of the property in which we had an

interest as at such date was HK$165.0 million and the attributable market value to us was HK$165.0

million. The full text of the letter and summary disclosure of property valuation with regard to our

property interests are set out in ‘‘Appendix III — Property Valuation Report’’ to this document.

BUSINESS

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INTELLECTUAL PROPERTY

As at the Latest Practicable Date, we had registered five trademarks in Hong Kong which are

material to our business. We had also registered seven domain names. For details, please see the section

headed ‘‘Statutory and General Information — E. Further Information about Our Business — 2. Our

Intellectual Property Rights’’ in Appendix V to this document.

During the Track Record Period and up to the Latest Practicable Date, we did not engage in any

research and development activities.

REGULATORY COMPLIANCE AND LEGAL PROCEEDINGS

During the Track Record Period and up to the Latest Practicable Date, we had obtained all material

licences and permits necessary for the operation of our business and such licences and permits are still

valid and in force. We have not experienced any refusal of the renewal application of any material

licences and permits necessary for the operation of our business.

During the Track Record Period and up to the Latest Practicable Date, we had complied with the

relevant laws and regulations in relation to our business in all material respects and there were no

material breaches or violations of laws or regulations applicable to us.

We may from time to time be subject to various legal or administrative proceedings arising in the

ordinary course of business, such as proceedings in respect of disputes with suppliers or clients and

labour disputes. During the Track Record Period and up to the Latest Practicable Date, there had not

been any material litigation or claim or arbitration made or pending or threatened against us.

BUSINESS

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CONTROLLING SHAREHOLDERS OF OUR COMPANY

Immediately following the [REDACTED] and the [REDACTED] (without taking into account any

Shares which may be allotted and issued pursuant to the exercise of the [REDACTED] or any options

which may be granted under the Share Option Scheme), our Company will be directly owned as to

[REDACTED]% by CHG, which is in turn owned as to 42.42% by Peak Summit (a company wholly

owned by Dr. Kenneth Tsang), 23.74% by Heroic Wealth (a company wholly owned by Dr. Adam

Leung), 10.74% by Mastermind Intelligence (a company wholly owned by Dr. Jason Fong), 2.46% by

Grateful Mind (a company wholly owned by Dr. Chu Leung Wing), 6.54% by Property Linkage (a

company wholly owned by Dr. Jenny Tsang), 9.10% by Wealth Basin (a company wholly owned by Mr.

Shiu) and 5.00% by Les Trois (a company wholly owned by Mrs. Chen), respectively. On 23 October

2020, CHG, Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing, Dr. Jenny

Tsang, Mr. Shiu and Mrs. Chen, together with Peak Summit, Heroic Wealth, Mastermind Intelligence,

Grateful Mind, Property Linkage, Wealth Basin and Les Trois (collectively, the ‘‘Concert Parties’’),entered into the Concert Party Deed, confirming, among others, that they have been acting and will

continue to act in concert with each other to obtain and/or to consolidate effective control of our Group.

Accordingly, CHG, Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing, Dr.

Jenny Tsang, Mr. Shiu, Mrs. Chen, Peak Summit, Heroic Wealth, Mastermind Intelligence, Grateful

Mind, Property Linkage, Wealth Basin and Les Trois are a group of our Controlling Shareholders.

Save as disclosed above, there is no other person who will, immediately following the completion

of the [REDACTED] and the [REDACTED] (without taking into account any Shares which may be

allotted and issued pursuant to the Share Option Scheme), be directly or indirectly interested in 30% or

more of the Shares then in issue or have a direct or indirect equity interest in any member of our Group

representing 30% or more of the equity in such entity.

Save as disclosed below, each of our Controlling Shareholders, our Directors and their respective

close associates confirmed that they do not have any interest in a business apart from our Group’s

business which competes or is likely to complete, directly or indirectly, with our Group’s business,

which would require disclosure pursuant to Rule 8.10 of the Listing Rules.

ACTING IN CONCERT

On 23 October 2020, CHG, Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung

Wing, Dr. Jenny Tsang, Mr. Shiu, Mrs. Chen, Peak Summit, Heroic Wealth, Mastermind Intelligence,

Grateful Mind, Property Linkage, Wealth Basin and Les Trois entered into the Concert Party Deed,

confirming that since the date on which they first became interested (whether directly or indirectly) in

our Group, (i) they have been and undertake to continue to act in concert and collectively for all

material commercial decisions, including but not limited to financial and operational matters and

strategic decisions, of our Group; (ii) they have reached consensus on, and have unanimously approved,

consented to or rejected, all material issues and decisions in relation to our Group and our business; and

(iii) they have been cooperating with each other to obtain and maintain the control and the management

of our Group. The Concert Parties further confirm and agree that if they are unable to reach unanimous

decisions on any material matter or issue relating to our Group after good faith discussions, Dr. Kenneth

Tsang shall be entitled to make the conclusive decision, which shall be binding on the others.

RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

– 151 –


DELINEATION OF BUSINESS

As at the Latest Practicable Date, as confirmed by each of our Controlling Shareholders and

Directors and so far as our Directors are aware, (1) apart from the interest in our Group, none of our

Controlling Shareholders or their respective close associates was engaged or had any interest in any

business which, directly or indirectly, competes or may compete with the business of our Group, which

would require disclosure under Rule 8.10 of the Listing Rules; and (2) none of our Directors had any

interest in any business which competes or is likely to compete, either directly or indirectly, with the

business of our Group, which would require disclosure under Rule 8.10 of the Listing Rules.

INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS

Our Directors consider that our Group is capable of carrying on our business independently from

our Controlling Shareholders and their respective associates (other than the members of our Group) after

[REDACTED] for the following reasons:

Management Independence

Notwithstanding the fact that our Controlling Shareholders will maintain controlling interests in

our Company upon the [REDACTED], our management and operational decisions are made by our

Board as well as our senior management. Our Board comprises four executive Directors and three

independent non-executive Directors. None of our executive Directors currently holds any directorship

or senior management role in any of the entities engaging in the excluded businesses. We consider that

our Board and senior management will function independently from our Controlling Shareholders

because:

(i) each of our Directors is aware of his/her fiduciary duties as a Director which require, among

others, that he/she acts for the benefit and in the best interest of our Company and does not

allow any conflict between his/her duties as a Director and his/her personal interests;

(ii) in the event that a potential conflict arises out of any transaction to be entered into between

our Group and our Directors or their respective associates, the interested Director(s) shall

abstain from voting at the relevant board meetings of our Company in respect of such

transactions and shall not be counted in the quorum as required in the Articles;

(iii) all of our executive Directors and senior management have substantial experience in the

industry in which we are engaged and have served our Group for a period of time during

which they have demonstrated their capability of discharging their duties independently from

our Controlling Shareholders as well as making decisions that are in the best interest of our

Group. In addition, we have an independent senior management team with no members

playing any managerial role or having any beneficial interest in our Controlling Shareholders

or any of their respective associates. Our Group’s business had been operated under

substantially the same management during the Track Record Period and up to the Latest

Practicable Date; and

(iv) our Board has formed an audit committee, a remuneration committee and a nomination

committee, each of which consists of independent non-executive Directors. We believe that

these independent non-executive Directors, who are responsible for monitoring the operations

of our Group, will be able to safeguard the interests of our Shareholders by exercising their

independent judgment and providing professional advice to our Board.


– 152 –


In view of the above, our Directors believe that they are capable of performing their roles in our

Company independently and that our Company is able to manage our Group’s business independently

from our Controlling Shareholders and their respective associates.

Operational Independence

Our Group has sufficient operational resources, including capital, general administrative resources,

facilities and employees to operate our business independently. We have established our own

organisational structure made up of individual departments, each with specific areas of responsibilities.

We are the holders of all relevant licences and qualifications material to our business.

During the Track Record Period, Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu

Leung Wing and Dr. Jenny Tsang, each a Controlling Shareholder of our Group, were our specialist

doctors, specialising in respiratory medicine, cardiology, neurology, geriatric medicine and psychiatry,

respectively. The aggregate revenue generated from the aforesaid five specialist doctors for the three

years ended 31 March 2021 and the six months ended 30 September 2021 was HK$107.3 million,

HK$92.7 million, HK$75.9 million and HK$40.0 million, respectively, representing approximately

55.8%, 39.8%, 34.7% and 31.3% of the total revenue of specialist medical services for the

corresponding periods. The aggregate revenue our Group generated from the aforesaid five specialist

doctors during the Track Record Period indicated a reducing extent of reliance our Group had on them.

Apart from the aforesaid five specialist doctors, more specialist doctors and panel specialists are joining

our Group, which should prevent us from relying on any single specialist doctor or broaden our income

source in terms of the number of doctors with our Group. For details, please see the section headed

‘‘Business — Our Professional Team’’. As such, we believe that our Group is able to operate

independently of our Controlling Shareholders.

Save as disclosed above, our Group had not shared any operational resources such as office

premises, facilities and general administration resources with our Controlling Shareholders or their

respective associates during the Track Record Period. Our Group has also established a set of internal

control procedures for the effective operation of our business.

Our Directors confirm that our top five customers and top five suppliers for each period during the

Track Record Period are all independent from our Controlling Shareholders and their respective

associates. We do not rely on our Controlling Shareholders or their respective associates and have

independent access to our customers and suppliers for the provision of services or materials.

Taking into account the above, our Directors are satisfied that our Group can operate

independently from our Controlling Shareholders after [REDACTED].

Financial Independence

Our Group has an independent financial reporting system and make financial decisions based on

our own business needs. We have sufficient capital to operate our business independently and have

adequate resources to support our daily operations. During the Track Record Period, none of our

Controlling Shareholders or their respective associates financed our operations. We do not intend to

obtain any borrowings, guarantees, pledges or mortgages from any of our Controlling Shareholders or

entities controlled by our Controlling Shareholders following [REDACTED]. Hence, our Group does not

have financial dependence on our Controlling Shareholders or their respective associates.


– 153 –


Having considered the above, our Directors are of the view that we will be financially independent

from our Controlling Shareholders and their respective associates upon [REDACTED] and we are able

to obtain financing from external sources without reliance on our Controlling Shareholders and their

respective associates.

LOCK-UP UNDERTAKING BY OUR CONTROLLING SHAREHOLDERS

Each of our Controlling Shareholders, collectively a group of controlling shareholders (as defined

under the Listing Rules), has undertaken to the [REDACTED], our Company and the Stock Exchange

that, as a controlling shareholder or a group of controlling shareholders, he, she or it shall not, at any

time during (i) the first six-month period commencing on the [REDACTED] (the ‘‘First Six-monthPeriod’’), which is required under the Listing Rules, dispose of, or enter into any agreement to dispose

of or otherwise create any options, rights, interests or encumbrances in respect of any of the Shares in

respect of which, he, she or it is shown in this document to be the beneficial owner (as defined in Rule

10.07(2) of the Listing Rules (the ‘‘Relevant Securities’’); and (ii) the second six-month period

commencing on the date on which the First Six-month Period expires (the ‘‘Second Six-monthPeriod’’), which is required under the Listing Rules, dispose of, or enter into any agreement to dispose

of or otherwise create any options, rights, interests or encumbrances in respect of any of the Relevant

Securities if, immediately following such disposal or upon exercise or enforcement of such options,

rights, interests or encumbrances, our Controlling Shareholders would cease to be a controlling

shareholder or a group of controlling shareholders (as defined under the Listing Rules) of our Company.

NON-COMPETITION UNDERTAKINGS

Our Controlling Shareholders have given non-competition undertakings in favour of our Company

under the Deed of Non-competition, pursuant to which each of our Controlling Shareholders warrants

and undertakes with our Company that, from [REDACTED] and for as long as he/she/it:

(a) is or is otherwise deemed to be our Controlling Shareholder;

(b) individually owns and/or is deemed to own, directly or indirectly, 10% or more of the issued

shares in our Company; or

(c) is or remains a Director,

he/she/it shall not, and shall use all reasonable endeavours to procure that his/her/its close associates

(‘‘Controlled Persons’’) and any companies directly or indirectly controlled by him/her/it (excluding

any members of our Group) (‘‘Controlled Companies’’) not to, either on his/her/its own account or with

each other or in conjunction with or on behalf of any body corporate, partnership, joint venture or other

contractual arrangement, whether directly or indirectly, whether for profit or not, carry on, participate in,

hold, engage in, acquire or operate, or provide any form of assistance to any person, firm or company

(except the members of our Group) to conduct business which, directly or indirectly, competes or may

compete with the business presently carried on by our Company or any of our subsidiaries, namely, the

provision of medical services and medical management services in the private sector, in Hong Kong or

such other place as our Company or any of our subsidiaries may conduct or carry on business from time

to time (the ‘‘Restricted Activity’’), and/or use the trademarks owned by our Group. Such non-

competition undertakings, however, do not apply to:

(i) the holding of the Shares or other securities issued by our Company or any of our

subsidiaries from time to time;


– 154 –


(ii) the holding of shares or other securities in any company which has an involvement in the

Restricted Activity, provided that such shares or securities are listed on a recognised stock

exchange and the aggregate interest of our Controlling Shareholders and his/her/its associates

(as ‘‘interest’’ is construed in accordance with the provisions contained in Part XV of the

SFO) does not amount to more than 5% of the relevant share capital of the company in

question;

(iii) the contracts and other agreements entered into between our Group and our Controlling

Shareholders and/or their associates; and

(iv) the involvement, participation or engagement of our Controlling Shareholders and/or his/her/

its associates in the Restricted Activity in relation to which our Company has agreed in

writing to such involvement, participation or engagement, following a decision by our

independent non-executive Directors to allow such involvement, participation or engagement.

New Business Opportunity

In the event that any Controlling Shareholder is offered or becomes aware of any business or

investment opportunity within the scope of the Restricted Activity (‘‘New Business Opportunity’’):

(a) he/she/it shall promptly notify our Company of such New Business Opportunity in writing;

(b) he/she/it shall not, and shall use all reasonable endeavours to procure that his/her/its

Controlled Persons and Controlled Companies not to, invest or participate in such New

Business Opportunity, unless such New Business Opportunity is rejected by the independent

committee of our Board (the ‘‘Independent Board Committee’’), comprising our

independent non-executive Directors from time to time who do not have any material interest

in the Restricted Activity and the New Business Opportunity, and the principal terms of

which our Controlling Shareholder(s) and/or his/her/its Controlled Persons or Controlled

Companies invest or participate in are no more favourable than those made available to our

Company;

(c) he/she/it may only engage in the New Business Opportunity if a notice is received from the

Independent Board Committee confirming that the New Business Opportunity is not accepted

by our Company and/or does not constitute competition with the business of our Group; and

(d) if any material change occurs in the nature, terms and/or conditions of such New Business

Opportunity, he/she/it shall refer such New Business Opportunity as so revised to our

Company, in the manner outlined above as if it were a fresh New Business Opportunity.

General Undertakings

To ensure the performance of the aforementioned non-competition undertakings given under the

Deed of Non-competition, our Controlling Shareholders shall, among other things:

(a) when required by our Company, provide all information necessary for the Independent Board

Committee to conduct annual review on the compliance with the terms of the Deed of Non-

competition and the enforcement thereof;

(b) where the Independent Board Committee has rejected the New Business Opportunity referred

to by our Controlling Shareholder(s), regardless of whether our Controlling Shareholder(s)

would invest or participate in such New Business Opportunity thereafter, procure our


– 155 –


Company to disclose to the public either in the annual or interim reports of our Company or

an announcement the decision of the Independent Board Committee with respect to the New

Business Opportunity, including its decision and the basis thereof; and

(c) do all such acts and things and execute all such deeds and documents as may be required to

carry into effect or give legal effect to the provisions of the Deed of Non-competition and the

transactions contemplated thereunder.

In respect of the undertakings stated above, our Company confirms that if the Independent Board

Committee rejects the New Business Opportunity referred to by our Controlling Shareholders, regardless

of whether our Controlling Shareholder(s) would invest or participate in such New Business Opportunity

thereafter, it will disclose to the public either in the annual or interim report of our Company or an

announcement the decision of the Independent Board Committee with respect to the New Business

Opportunity, including its decision and the basis thereof.

Each of our Controlling Shareholders has undertaken to our Company that he/she/it will abstain

from voting on the board level or the shareholder level of our Company and will not be counted in the

quorum if there arises any actual or potential conflict of interest in relation to the Restricted Activity

and the New Business Opportunity.

To ensure that the terms of the Deed of Non-competition are observed, our independent non-

executive Directors will, based on the information available to them, review on an annual basis (i) the

compliance with and the enforcement of the non-competition undertakings given under the Deed of Non-

competition; and (ii) all the decisions made by our Group in relation to whether take up any New

Business Opportunity.

CORPORATE GOVERNANCE MEASURES

Our Company will adopt the following corporate governance measures to monitor the compliance

with the Deed of Non-competition and to safeguard the interests of our Shareholders:

(a) our independent non-executive Directors will annually review the compliance with and the

enforcement of the non-competition undertakings given under the Deed of Non-competition;

(b) our Controlling Shareholders undertake to provide, upon our Company’s request, all

information that is necessary for the annual review conducted by our independent non-

executive Directors and the enforcement of the Deed of Non-competition;

(c) our Company will disclose decisions on matters reviewed by our independent non-executive

Directors in relation to the compliance with and the enforcement of the Deed of Non-

competition in the annual reports of our Company;

(d) our Controlling Shareholders will provide confirmation on compliance with their undertaking

under the Deed of Non-competition in the annual reports of our Company;

(e) our Company has appointed three independent non-executive Directors to ensure the effective

exercise of independent judgment on the decision-making process of our Board and provide

independent advice to our independent Shareholders;

(f) our Company has appointed China Everbright Capital Limited as our compliance adviser to

advise on compliance matters according to the Listing Rules; and


– 156 –


(g) if any potential conflict of interests arises between our Group and our Controlling

Shareholders in relation to our Group’s business, the interested Directors, or as the case may

be, our Controlling Shareholders, would, according to the Articles or the Listing Rules, be

required to declare his/her/its interests and, where required, abstain from participating in the

relevant board meeting or general meeting as well as voting on the transaction, and shall not

be counted in the quorum where required.


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Prior to [REDACTED], we have entered into certain transactions with parties who will be our

connected persons or deemed connected persons as defined under Chapter 14A of the Listing Rules

upon [REDACTED]. Upon [REDACTED], these transactions will constitute continuing connected

transactions pursuant to Rule 14A.31 of the Listing Rules. Details of such transactions are set out below.

CONNECTED PERSONS

Upon [REDACTED], the following parties, with which our Group has entered into certain

transactions in the ordinary and usual course of business, will become connected persons of our Group:

Name Description of Connected Relationship

Dr. Kenneth Tsang Our executive Director and Controlling Shareholder

Dr. Adam Leung Our executive Director and Controlling Shareholder

Dr. Jason Fong Our Controlling Shareholder

Dr. Chu Leung Wing Our Controlling Shareholder

Dr. Jenny Tsang Our Controlling Shareholder

Ms. Tsang Wah Sin, Margie

(‘‘Ms. Margie Tsang’’)Ms. Margie Tsang is the sister of Dr. Kenneth Tsang, our executive

Director and one of our Controlling Shareholders

M & M Production

Company Limited

(‘‘M & M Production’’)

M & M Production is a limited company held as to 80% by Ms. Margie

Tsang, 10% by Mrs. Tsang Hung Yim Wan, the mother of Dr. Kenneth

Tsang and Ms. Margie Tsang, and 10% by Mr. Lam Ho Yin Martin,

the son of Ms. Margie Tsang

FULLY-EXEMPT CONTINUING CONNECTED TRANSACTIONS

Service Agreements with Each of Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. ChuLeung Wing and Dr. Jenny Tsang

Description of the transaction

Our Group has been engaging Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu

Leung Wing and Dr. Jenny Tsang (collectively, the ‘‘Practising Primary Shareholders’’) to provide

medical services to our Group as set out below:

Practising Primary Shareholders Scope of service

Dr. Kenneth Tsang Specialist in Respiratory Medicine

Dr. Adam Leung Specialist in Cardiology

Dr. Jason Fong Specialist in Neurology

Dr. Chu Leung Wing Specialist in Geriatric Medicine

Dr. Jenny Tsang Specialist in Psychiatry

CONTINUING CONNECTED TRANSACTIONS

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Pursuant to the service agreements entered into between our Group and each of the Practising

Primary Shareholders, the Practising Primary Shareholders agreed to irrevocably and unconditionally

provide the medical services as shown above to our Group. Prior to [REDACTED], no fees or other

payments were made by our Group to the Practising Primary Shareholders. Our Group will enter into

new service agreements with each of the Practising Primary Shareholders (the ‘‘New ServiceAgreements’’) commencing on the [REDACTED] and effective until 31 March 2026 to provide medical

services to our Group at a nominal fee of HK$1 each year.

Considering that (i) the entering into of the New Service Agreements with a term of more than

three years promotes stability and continuity in our operations; (ii) the strategic plan of our Group to

have the Practising Primary Shareholders provides various specialist medical services; and (iii) such

term is sufficiently long to provide better protection to our Group taking into account the nature of our

Group’s business and the nature of services provided by the Practising Primary Shareholders, our

Directors are of the view that the New Service Agreements are beneficial to the interests of our

Shareholders as a whole.

Historical transaction amounts

There was no historical transaction amount paid by our Group to the Practising Primary

Shareholders in consideration of their medical services provided to our Group for the three years ended

31 March 2021 and the six months ended 30 September 2021.

Annual caps and basis

Our Directors estimate that for each of the years ending 31 March 2022 and 31 March 2023, the

annual fees payable by our Group to each of the Practising Primary Shareholders will not exceed HK$1,

being the nominal fees payable to each of the Practising Primary Shareholders under the New Service

Agreements.

Implications under the Listing Rules

Since each of the applicable percentage ratios (other than the profits ratio) for the New Service

Agreements is expected to be less than 0.1%, the transaction under the New Service Agreements will

constitute de minimis continuing connected transaction under Rule 14A.76(1)(a) of the Listing Rules,

and will be fully exempted from independent shareholders’ approval, annual review and all disclosure

requirements.


– 159 –


Commercial Endorsement Agreement with M & M Production

Description of the transaction

Our Group has been engaging M & M Production to procure Ms. Margie Tsang to act as our

Group’s commercial endorser since 1 December 2019 for a term of three years.

Pursuant to the commercial endorsement agreement entered into between our Group and M & M

Production, Ms. Margie Tsang is required to participate in the filming of our Group’s commercials as

our Group’s commercial endorser, and our Group shall pay Ms. Margie Tsang a consideration of

HK$1,000,000.

Pricing policy

The terms of and the fees payable under the commercial endorsement agreement with M & M

Production were determined through commercial negotiations on an arm’s length basis and were based

on the scope of services rendered by Ms. Margie Tsang. From our perspective, the terms were no more

favourable to Ms. Margie Tsang than those which would otherwise have been provided by our Group to

an independent celebrity.


– 160 –


Historical transaction amounts

The total fees paid by our Group for Ms. Margie Tsang, being our commercial endorser, for the

year ended 31 March 2020 and 31 March 2021 and the six months ended 30 September 2021 were

HK$1,000,000, HK$150,000 and nil, respectively.

Annual caps and basis

Our Directors estimate that the annual fees payable by our Group to Ms. Margie Tsang under the

commercial endorsement agreement with M & M Production for each of the years ending 31 March

2022 and 31 March 2023 will be nil and HK$1,000,000, respectively, as the payment to M & M

Production for the current commercial endorsement agreement has been completed, and such commercial

endorsement agreement may be renewed on 30 November 2022, subject to the requirements under the

Listing Rules.

Implications under the Listing Rules

Since each of the applicable percentage ratios (other than the profits ratio) for the commercial

endorsement agreement with M & M Production is expected to be less than 0.1%, the transaction under

the commercial endorsement agreement with M & M Production will constitute de minimis continuing

connected transaction under Rule 14A.76(1)(a) of the Listing Rules, and will be fully exempted from

independent shareholders’ approval, annual review and all disclosure requirements.


– 161 –


THE DIRECTORS’ VIEWS

Our Directors (including independent non-executive Directors) are of the view that it is in the

interests of our Group to continue with the continuing connected transactions described in this section

after [REDACTED], and that the transactions contemplated under (i) the New Service Agreements; and

(ii) the commercial endorsement agreement with M & M Production have been and will continue to be

conducted on normal commercial terms that are fair and reasonable and are in the interests of our

Company and our Shareholders as a whole and are carried out in the ordinary and usual course of

business of our Group. In addition, the proposed annual caps for the fully-exempt continuing connected

transactions described above are fair and reasonable and in the interests of our Company and our

Shareholders as a whole.


– 162 –


OVERVIEW

Our Board currently consists of seven Directors, comprising four executive Directors and three

independent non-executive Directors. Our Directors are supported by our senior management in the day-

to-day management of our business.

DIRECTORS

The table below sets out the information relating to the members of our Board:

Name Age PositionDate of joining

our Group

Date ofappointmentas Director Role and responsibilities

Relationshipwith other

Directors andsenior

management

Executive Directors

Dr. Kenneth Tsang(曾華德醫生)

60 Executive Director,chairman of theBoard and chiefexecutive officer

October 2013 21 September2020(re-designatedas an executiveDirector on 23October 2020)

Overseeing the corporateplanning, businessdevelopment andmanagement of operationsof our Group

Spouse ofMrs. Tsang

Dr. Adam Leung(梁永雄醫生)

61 Executive Director November 2017 21 September2020(re-designatedas an executiveDirector on 23October 2020)

Overseeing the businessdevelopment andmanagement of operationsof our Group

N/A

Mrs. Chen ChouMei Mei Vivien(陳周薇薇女士)

71 Executive Director andchief operatingofficer

November 2017 21 September2020(re-designatedas an executiveDirector on 23October 2020)

Overseeing the overalloperations of our Group

N/A

Mr. Shiu Shu Ming(蕭恕明先生)

51 Executive Director November 2017 21 September2020(re-designatedas an executiveDirector on 23October 2020)

Financial planning andstrategic development ofour Group

N/A

Independent non-executive Directors

Mr. David MichaelNorman

64 Independentnon-executiveDirector

[.] [.] Bringing independentjudgment to our Board

N/A

Mr. Ip Koon WingErnest(葉冠榮先生)



N/A

Mr. Wong KwokShing Thomas(汪國成先生)



N/A

DIRECTORS AND SENIOR MANAGEMENT

– 163 –


Executive Directors

Dr. Kenneth Tsang (曾華德醫生), aged 60, is our executive Director, chairman of our Board and

our chief executive officer. Dr. Kenneth Tsang is also our founder and one of our Controlling

Shareholders. Dr. Kenneth Tsang is primarily responsible for overseeing the corporate planning,

business development and management of operations of our Group. Dr. Kenneth Tsang is also the

chairman of the nomination committee and a member of the remuneration committee of our Company.

Dr. Kenneth Tsang is the spouse of Mrs. Tsang, our director of operations.

Dr. Kenneth Tsang graduated from the University of Glasgow with degrees of Bachelor in

Medicine and Surgery in July 1986. He later obtained the degree of Doctor of Medicine from the

University of Glasgow in December 1995. Dr. Kenneth Tsang obtained the membership of the Royal

Colleges of Physicians of London and Edinburgh and Royal College of Physicians and Surgeons of

Glasgow (MRCP (UK)) in November 1989. Dr. Kenneth Tsang was awarded fellowships by the Hong

Kong College of Physicians in January 1996, Hong Kong Academy of Medicine (Medicine) in October

1996, Royal College of Physicians of Edinburgh in March 1999, Royal College of Physicians and

Surgeons of Glasgow in March 2001, and Royal College of Physicians of London in May 2001,

respectively. Dr. Kenneth Tsang obtained his specialist qualification in respiratory medicine in 1996.

Dr. Kenneth Tsang is an Honorary Clinical Professor in the Faculty of Medicine of The University

of Hong Kong. He has been serving as a member of the Grant Review Board of the Health and Medical

Research Fund Research Council, Food and Health Bureau of the Hong Kong government and Vice-

President of the Society of Physicians of Hong Kong. Dr. Kenneth Tsang was a President from 2001 to

2003 and is currently a council member of the Hong Kong Thoracic Society. Dr. Kenneth Tsang was

chairman of the Hong Kong Lung Foundation from 2007 to 2009. Dr. Kenneth Tsang served as the

Assistant Dean in External Affairs and Fund Raising of the Faculty of Medicine of The University of

Hong Kong, National Delegate for China to the European Respiratory Society and a Section Head in the

respiratory disorders faculty of Faculty of 1000 Medicine. Dr. Kenneth Tsang was Distinguished

Professor at Guangzhou Medical University of the PRC from November 2011 to October 2014. Dr.

Kenneth Tsang was an associate editor of Respirology, the indexed official journal of the Asian Pacific

Society of Respirology.

Dr. Kenneth Tsang was a director of each of the following companies at the time of or within the

twelve months prior to their respective dissolutions:

Name of company

Place ofincorporation/establishment

Nature of businessimmediately prior to

dissolutionDate of

dissolutionMeans ofdissolution

Reason fordissolution

University MedicalSpecialists Limited

(大學專科醫療中心

有限公司)

Hong Kong Dormant 22 July 2011 Dissolved byderegistration

Dormant

Hong Kong Medical

Specialists Limited(香港專科醫療中心

有限公司)

Hong Kong Provision of

managementservices for amedical clinic

23 September

2016

Dissolved by

deregistration

Cessation of

business

Sharp Wealthy Limited Hong Kong Dormant 3 November 2017 Dissolved byderegistration

Dormant


– 164 –


Dr. Kenneth Tsang confirmed that the aforementioned companies were solvent immediately prior

to their respective dissolution; that there was no wrongful act on his past leading to the dissolution of

these companies; and that he is not aware of any actual or potential claim that has been or will be made

against him as a result of such dissolution.

Dr. Kenneth Tsang is not and has not been a director of any other listed company in Hong Kong

or overseas in the past three years preceding the Latest Practicable Date.

Dr. Adam Leung (梁永雄醫生), aged 61, is our executive Director and one of our Controlling

Shareholders. Dr. Adam Leung joined our Group in November 2017 and is primarily responsible for

overseeing the business development and management of operations of our Group.

Dr. Adam Leung obtained his Bachelor of Medicine and Bachelor of Surgery degrees from The

University of Hong Kong in November 1984. Dr. Adam Leung obtained a Doctor of Medicine degree

from The University of Hong Kong in November 1993. Dr. Adam Leung has been a member of the

Royal Colleges of Physicians of London and Edinburgh and Royal College of Physicians and Surgeons

of Glasgow (MRCP (UK)) since November 1987. He was awarded a fellowship by the Hong Kong

College of Physicians in June 1993, a fellowship by the American College of Cardiology in August

1994, a fellowship by the Hong Kong College of Cardiology in March 1995 and a fellowship by the

Royal College of Physicians of Edinburgh in March 1997, respectively. In addition, Dr. Adam Leung is

a foundation fellow of the Hong Kong Academy of Medicine (Medicine). Dr. Adam Leung has been a

registered medical practitioner in Hong Kong specialising in cardiology since March 1998.

Dr. Adam Leung is currently an honorary consultant in cardiology at the Department of Medicine

and Geriatrics of Kwong Wah Hospital. He is also the co-chairman of the Heart Program Committee,

and the doctor-in-charge and medical advisor of the Heart Center and Cardiac Catheterization and

Interventional Center of the Hong Kong Adventist Hospital.

Dr. Adam Leung is not and has not been a director of any other listed company in Hong Kong or

overseas in the past three years preceding the Latest Practicable Date.

Mrs. Chen Chou Mei Mei Vivien (陳周薇薇女士), aged 71, is our executive Director and chief

operating officer. Mrs. Chen is also one of our Controlling Shareholders. Mrs. Chen joined our Group in

November 2017 and is responsible for overseeing the overall operations of our Group.

Mrs. Chen has been a non-executive director of Wing Tai Properties Limited, a company listed on

the Main Board of the Stock Exchange (stock code: 0369) since September 2012, and was an

independent non-executive director of New Silkroutes Group Ltd, a company listed on the Singapore

Exchange Limited (stock code: NSG:SP) from June 2015 to March 2021. Mrs. Chen is currently the

school supervisor of Yan Chai Hospital No. 2 Secondary School and a vice president of Hong Kong

Health Food Association Limited. Mrs. Chen was a member of the Advisory Council on Food and

Environmental Hygiene (ACFEH) from April 2015 to April 2019.

Save as disclosed above, Mrs. Chen is not and has not been a director of any other listed company

in Hong Kong or overseas in the past three years preceding the Latest Practicable Date.

Mr. Shiu Shu Ming (蕭恕明先生), aged 51, is our executive Director. Mr. Shiu is also one of our

Controlling Shareholders. Mr. Shiu joined our Group in November 2017 and is responsible for the

financial planning and strategic development of our Group.


– 165 –


Mr. Shiu graduated from the City University of Hong Kong (formerly known as City Polytechnicof Hong Kong) in November 1993 with a bachelor’s degree in accountancy. Mr. Shiu has been amember of the Hong Kong Institute of Certified Public Accountants since May 2016. Mr. Shiu has beenan ordinary member of the Hong Kong Securities Institute since August 2008. He is a responsibleofficer licensed to conduct Type 6 (advising on corporate finance) regulated activity under the SFO.

Mr. Shiu has over 20 years of experience in corporate finance, including mergers and acquisitions,investments, initial public offering and fundraising exercise in various ventures and projects with dealportfolios covering private entities, state-owned enterprises and listed companies in Hong Kong, thePRC, Malaysia, Singapore and Indonesia. Prior to joining our Group, Mr. Shiu was a director, aresponsible officer and head of corporate finance of South China Capital Limited, a member of SouthChina Group from April 2008 to August 2010. From August 2010 to September 2013, Mr. Shiu was adirector and a responsible officer of Vinco Capital Limited, which is a member of Vinco FinancialGroup Limited, a company listed on GEM of the Stock Exchange (stock code: 8340). From May 2014to April 2015, Mr. Shiu was a responsible officer of each of Upbest Assets Management Limited andUpbest Securities Company Limited, both of which are members of Upbest Group Limited, a companylisted on the Main Board of the Stock Exchange (stock code: 0335). During the period when Mr. Shiuwas a responsible officer of each of the aforesaid four companies, he was primarily responsible forproviding corporate advisory services in relation to pre-IPO restructuring and fund-raising exercise,mergers and acquisitions, equity placement and debt financing. In August 2014, Mr. Shiu founded EutoCapital Partners Limited, a boutique financial advisory firm focusing on providing corporate financeadvisory services to clients in the Hong Kong, PRC and South East Asian markets, and has been theresponsible officer of the firm since then. Mr. Shiu’s major responsibilities include, among others,conducting pre-IPO planning, restructuring and fund-raising exercise and advising on compliancematters. Mr. Shiu was an executive director and the chief investment officer of Agritrade ResourcesLimited, a company listed on the Main Board of the Stock Exchange (stock code: 1131) from November2010 to March 2014 and from August 2013 to March 2014, respectively, during which he was primarilyresponsible for the financial and accounting functions of the company, including reviewing the planningand execution of the merger and acquisition activities. Mr. Shiu was re-designated as a non-executivedirector of Agritrade Resources Limited in 2014 and acted in such capacity from April 2014 to October2016. Mr. Shiu served as a non-executive director of Golden Century International Holdings GroupLimited (formerly known as International Standard Resources Holdings Limited), a company listed onthe Main Board of the Stock Exchange (stock code: 0091) from March 2020 to 30 September 2021.Moreover, during the period between 2015 and 2019, Mr. Shiu had been engaged in trading ofcommodities, primarily crude palm oil.

Mr. Shiu currently serves as the joint company secretary of China Smartpay Group HoldingsLimited, a company listed on GEM of the Stock Exchange (stock code: 8325) and a non-executivedirector of Oriental Payment Group Holdings Limited, a company listed on GEM of the Stock Exchange(stock code: 8613).

Mr. Shiu was a director of each of the following companies at the time of or within the twelvemonths prior to their respective dissolutions:

Name of company

Place ofincorporation/establishment

Nature of businessimmediately prior to

dissolutionDate of

dissolutionMeans ofdissolution

Reason fordissolution

Information Security SystemsConsultant Limited

Hong Kong Provision ofinformationtechnology service

6 July 2007 Dissolved byderegistration

Cessation ofbusiness

Top Praise TechnologyLimited(啓譽科技有限公司)

Hong Kong Provision ofinformationtechnology service

11 January 2008 Dissolved byderegistration


Fulcrum Holding Limited(富勤控股有限公司)

Hong Kong Investment holding 6 February 2009 Dissolved byderegistration



– 166 –


Mr. Shiu confirmed that the aforementioned companies were solvent immediately prior to their

respective dissolution; that there was no wrongful act on his part leading to the dissolution of these

companies; and that he is not aware of any actual or potential claim that has been or will be made

against him as a result of such dissolution.

Save as disclosed above, Mr. Shiu is not and has not been a director of any other listed company

in Hong Kong or overseas in the past three years preceding the Latest Practicable Date.

Independent Non-executive Directors

Mr. David Michael Norman, aged 64, was appointed as our independent non-executive Director

on [.]. Mr. Norman is primarily responsible for bringing independent judgment to our Board. Mr.

Norman is also a member of each of the audit committee, the remuneration committee and the

nomination committee of our Company.

Mr. Norman was awarded a bachelor of arts degree in psychology, philosophy and physiology by

the University of Oxford in 1978. Mr. Norman was admitted as a solicitor in England and as a solicitor

in Hong Kong in December 1981 and July 1984, respectively. Mr. Norman has been resident in Hong

Kong and practising as a solicitor since 1984. Since June 2011, Mr. Norman has been a sole legal

practitioner under the name David Norman & Co.

Mr. Norman has over 35 years of experience in mergers and acquisitions and corporate finance for

companies listed in Hong Kong and elsewhere. Mr. Norman has also extensively advised on listings,

secondary debt and equity offerings, takeover matters and both disciplinary and non-disciplinary

proceedings of the Stock Exchange. Mr. Norman has been a member of each of the Takeovers and

Mergers Panel and the Takeovers Appeal Committee since April 2012 and chairman of the Share

Registrars’ Disciplinary Committee since April 2015.

Mr. Norman currently serves as an independent non-executive director of Guoco Group Limited, a

company listed on the Main Board of the Stock Exchange (stock code: 0053) and a non-executive

director of South China Holdings Company Limited (formerly known as South China (China) Limited),

a company listed on the Main Board of the Stock Exchange (stock code: 0413).

Save as disclosed above, Mr. Norman is not and has not been a director of any other listed

company in Hong Kong or overseas in the past three years.

Mr. Norman was not a director of any company at the time of or within the twelve months prior to

its dissolution.

Mr. Ip Koon Wing Ernest (葉冠榮先生), aged 61, was appointed as our independent non-

executive Director on [.]. Mr. Ip is primarily responsible for bringing independent judgment to our

Board. He is also the chairman of the audit committee and a member of each of the remuneration

committee and the nomination committee of our Company.

Mr. Ip graduated from the Hong Kong Polytechnic University (formerly known as Hong Kong

Polytechnic) in 1984 with a professional diploma in accountancy. Mr. Ip is a fellow member of each of

the Hong Kong Institute of Certified Public Accountants and Association of Chartered Certified

Accountants.


– 167 –


Mr. Ip has over 35 years of experience in accounting and auditing. Mr. Ip joinedPricewaterhouseCoopers in April 1985 and became a partner in November 1993. Mr. Ip retired fromPricewaterhouseCoopers in July 2019. In August 2019, Mr. Ip joined the Fung Group, which comprises,among others, Li & Fung Limited (a company formerly listed on the Main Board of the StockExchange), Fung (1937) Management Limited and Convenience Retail Asia Limited (a company listedon the Main Board of the Stock Exchange (stock code: 0831)). Mr. Ip is currently the group chieffinancial officer of the Fung Group.

Mr. Ip has held various key positions in regulatory authorities and business associations. Mr. Ipwas a member of the Listing Committee of the Stock Exchange from 2003 to 2009. Mr. Ip was amember of the Dual Filing Advisory Group of the SFC from 2008 to 2014. Currently, Mr. Ip is amember of the Takeovers and Mergers Panel and the Takeovers Appeal Committee. Mr. Ip is a vicepresident of the Hong Kong Business Accountants Association. He is also a member of the GuangdongProvincial Committee of the Chinese People’s Political Consultative Conference and a vice president ofthe Council for the Promotion of Guangdong–Hong Kong–Macao Cooperation.

Mr. Ip currently serves as an independent non-executive director of Media Chinese InternationalLimited, a company listed on the Main Board of the Stock Exchange (stock code: 685) and the MainMarket of Bursa Malaysia Securities Berhad in Malaysia (stock code: 5090). Mr. Ip also currently servesas an independent director of OneConnect Financial Technology Co., Ltd, a company listed on the NewYork Stock Exchange (stock code: NYSE: OCFT) which is an associate of Ping An Insurance (Group)Company of China, Ltd., a company listed on the Main Board of the Stock Exchange (stock code:2318). Mr. Ip is also an independent non-executive director of Ping An OneConnect Bank (Hong Kong)Limited, a wholly-owned subsidiary of OneConnect Financial Technology Co., Ltd.

Save as disclosed above, Mr. Ip is not and has not been a director of any other listed company inHong Kong or overseas in the past three years preceding the Latest Practicable Date.

Mr. Wong Kwok Shing Thomas (汪國成先生), Justice of the Peace, aged 66, was appointed asour independent non-executive Director on [.]. Mr. Wong is primarily responsible for bringingindependent judgment to our Board. Mr. Wong is also the chairman of the remuneration committee anda member of each of the audit committee and the nomination committee of our Company.

Mr. Wong was awarded a general nursing certificate by the Hong Kong Government Hospitals’School of General Nursing in March 1976 and a geriatric and rehabilitation nursing certificate by theSouth Australian Health Commission in July 1979. He then obtained a diploma of teaching (nurseeducation) and a bachelor of education degree from South Australian College of Advanced Education inApril 1982 and February 1984, respectively. Mr. Wong obtained a doctor of philosophy degree fromGlasgow Caledonian University in the United Kingdom in October 1995.

Mr. Wong has been a registered nurse in Hong Kong and Australia since March 1976 and January1977, respectively. Apart from his career as a nurse, Mr. Wong is dedicated to academic teaching.During the period between 1986 and 1999, Mr. Wong held various teaching posts at The Hong KongPolytechnic University (formerly known as Hong Kong Polytechnic). Mr. Wong was a Professor for theSchool of Nursing (formerly known as the Department of Nursing and Health Sciences) of The HongKong Polytechnic University from September 1999 to July 2003. He was Chair Professor of School ofNursing of The Hong Kong Polytechnic University from August 2003 to August 2008 and a vicepresident (management) of the offices of the president of the Hong Kong Polytechnic University fromApril 2009 to January 2011, respectively. Mr. Wong is currently the Acting President of Hong KongNang Yan College of Higher Education.


– 168 –


Mr. Wong was a director of Sunway Design Limited, a company incorporated in Hong Kong,

within the twelve months prior to its dissolution. Mr. Wong confirmed that Sunway Design Limited was

solvent immediately prior to its dissolution, and that he is not aware of any actual or potential claim that

has been or will be made against him as a result of such dissolution.

Mr. Wong is not and has not been a director of any other listed company in Hong Kong or

overseas in the past three years preceding the Latest Practicable Date.

Other Disclosure Pursuant to Rule 13.51(2) of the Listing Rules

Save as disclosed above, each of our Directors (i) did not hold other positions in our Company or

other members of our Group as at the Latest Practicable Date; (ii) had no other relationship with any

Directors, senior management or substantial or Controlling Shareholders of our Company as at the Latest

Practicable Date; and (iii) did not hold any other directorships in listed companies in the three years

prior to the date of this document. Immediately following completion of the [REDACTED] and the

[REDACTED], save for the interests in the Shares which are disclosed in the section headed

‘‘Substantial Shareholders’’, each of our Directors will not have any interest in the Shares within the

meaning of Part XV of the SFO.

Save as disclosed in this document, none of our Directors have any interest in any business, apart

from the business of our Group, which competes or is likely to compete, directly or indirectly, with our

business. Please refer to Appendix V for further information about our Directors, including details of the

interests of our Directors in the shares and underlying shares of our Company (within the meaning of

Part XV of the SFO) and particulars of the service contracts and remuneration.

Save as disclosed herein, to the best of the knowledge, information and belief of our Directors

having made all reasonable enquiries, there were no other matters with respect to the appointment of our

Directors that need to be brought to the attention of our Shareholders and there was no information

concerning our Directors that is required to be disclosed pursuant to Rules 13.51(2)(h) to (v) of the

Listing Rules as at the Latest Practicable Date.

SENIOR MANAGEMENT

The table below sets out the information relating to our senior management:

Name Age PositionDate of joining

our Group Roles and responsibilities

Relationship withother Directors andsenior management

Mrs. Janette Elizabeth Tsang 55 Director ofoperations

October 2013 Supervising the clinicalgovernance andadministrative aspects of

our Group

Spouse ofDr. KennethTsang

Ms. Kwan Wai Ling(關慧玲女士)

49 Director of finance May 2018 Overseeing the day-to-dayfinance and accounting

operations of our Group

N/A

Ms. Yeung Kit Shun

(楊傑遜女士)

45 Director of business

development andmarketing

January 2020 Overseeing the business

development andmarketing of our Group

N/A


– 169 –


Mrs. Janette Elizabeth Tsang, aged 55, is our director of operations. Mrs. Tsang joined ourGroup in October 2013 and is responsible for supervising the clinical governance and administrativeaspects of our Group. Mrs. Tsang is the spouse of Dr. Kenneth Tsang, our executive Director, chairmanof the Board and chief executive officer and also one of our Controlling Shareholders.

Mrs. Tsang has been a registered nurse since 1987. She was awarded a certificate of completionfor her pre-registration training by the National Board for Nursing, Midwifery and Health Visiting forScotland, the United Kingdom in April 1987.

Mrs. Tsang has over 30 years of experience in the nursing profession. Prior to joining our Group,Mrs. Tsang had worked in the United Kingdom. She worked as a staff nurse at the HepatobiliaryProfessorial Surgical Unit at Glasgow Royal Infirmary, University of Glasgow Medical School fromApril 1987 to November 1988, Princess Royal Hospital, North Humberside in the United Kingdom fromMarch 1989 to July 1989, Princess Royal Hospital, Telford, Shropshire in the United Kingdom fromAugust 1989 to January 1990, and City General Hospital, University of Keele Medical School, whereshe was trained as an operating theatre nurse from July 1990 to February 1991, respectively. Mrs. Tsangwas a team leader and a senior staff nurse on an acute Hepatobiliary surgical ward and Liver TransplantUnit at the Hammersmith Hospital, Royal Postgraduate Medical School in London, the United Kingdomfrom February 1991 to May 1993 and a part-time staff nurse at the University of Cambridge TeachingHospital from July 1995 to October 1995, respectively. Mrs. Tsang also had work experience in HongKong. She worked as an out-patient department nurse at the Hong Kong Adventist Hospital fromOctober 1996 to April 2001 and a clinic nurse at Dr. Lauren Bramley and Partners from June 2006 toJune 2008, respectively.

Ms. Kwan Wai Ling (關慧玲女士), aged 49, is our director of finance. Ms. Kwan joined ourGroup as the financial controller in May 2018 and was promoted to our director of finance in November2020. Ms. Kwan is responsible for overseeing the day-to-day finance and accounting operations of ourGroup.

Ms. Kwan obtained a bachelor’s degree in business administration, majoring in professionalaccountancy, and a master’s degree in business administration from the Chinese University of HongKong in December 1994 and December 2006, respectively. Ms. Kwan was admitted as a member of theHong Kong Institute of Certified Public Accountants in April 1998. She was also admitted as a fellowmember of the Association of Chartered Certified Accountants in April 2003.

Ms. Kwan has over 20 years of experience in accounting and auditing. Prior to joining our Group,Ms. Kwan worked in various positions in the accounting and finance industry. Ms. Kwan worked forGlass Radcliffe Chan & Wee as an audit assistant and an audit senior from September 1994 to June1995 and from July 1995 to February 1997. From February 1997 to June 2000, she worked as a senioraccountant at Deloitte Touche Tohmatsu. From June 2000 to September 2014, Ms. Kwan worked atVtech Holdings Limited, a company listed on the Main Board of the Stock Exchange (stock code:0303), as a management accountant from June 2000 to March 2002, an assistant chief accountant fromApril 2002 to December 2006, a chief accountant from January 2007 to December 2007 and thefinancial controller of the group from January 2008 to September 2014, respectively. Ms. Kwan workedas a senior finance manager for The Sincere Company, Limited, a company listed on the Main Board ofthe Stock Exchange (stock code: 0244), from August 2016 to February 2017.

Ms. Yeung Kit Shun (楊傑遜女士), aged 45, is our director of business development andmarketing. Ms. Yeung joined our Group in January 2020 and is responsible for overseeing the businessdevelopment and marketing of our Group.


– 170 –


Ms. Yeung graduated from The University of Hong Kong with a bachelor’s degree in social

sciences in December 1998. Ms. Yeung was awarded a course certificate in strategic public relations

management and crisis communication from the Hong Kong Baptist University in October 2004 and a

master’s degree in journalism from the Chinese University of Hong Kong in August 2006. Ms. Yeung

also obtained a postgraduate diploma and a master of science degree in corporate governance and

directorship from the Hong Kong Baptist University in October 2007 and November 2008, respectively.

Ms. Yeung completed the Kellogg-HKUST Executive MBA programme jointly organised by the Kellogg

School of Management at Northwestern University and the Hong Kong University of Science and

Technology and obtained a master of business administration degree in December 2015.

Ms. Yeung has over 20 years of experience in the public relations industry. Prior to joining our

Group, she worked for the Faculty of Medicine of The University of Hong Kong as an executive officer

and an administrative assistant of communications (public relations and fundraising) from September

2001 to April 2005 and from May 2005 to January 2006. She worked for the HKU Centennial Campus

Development Office, Registry as an administrative assistant of communications from February 2006 to

August 2007. Ms. Yeung founded Mind Resource PR Consulting Limited in 2007 and was its director

from April 2007 to March 2016. Ms. Yeung was the director of Mind Resource Ogilvy Limited during

the period from December 2011 to October 2019. Ms. Yeung has been a strategic counsel of the Greater

Bay Area Media Group and Guangdong–Hong Kong–Macao–Bay Area Economic and Trade Association

since August 2018.

Ms. Yeung was the third vice-president of the Lions Club of Tuen Mun from July 2017 to June

2018 and has been a member of the fundraising committee of the Hong Kong Society for Rehabilitation

since 2017. Also, Ms. Yeung has been a mentor for Healthcare Startups from the Hong Kong Science

and Technology Parks Corporation since July 2019. In addition, Ms. Yeung has been a vice-president of

the Hong Kong Small and Medium Enterprises Association and the permanent member and the senior

healthcare and technology development chairman of the Guangdong-Hong Kong-Macao-Bay Area

Economic and Trade Association since July 2018 and August 2018, respectively.

Ms. Yeung was a director of Mind Resource PR Consulting Limited and Mind Resource Ogilvy

Limited, each a company incorporated in Hong Kong, within the twelve months prior to their respective

dissolutions on 18 March 2016 and 18 October 2019. Ms. Yeung confirmed that Mind Resource PR

Consulting Limited and Mind Resource Ogilvy Limited were solvent immediately prior to their

respective dissolutions, and that she is not aware of any actual or potential claim that has been or will

be made against her as a result of such dissolutions.

None of our senior management members is not or has not been a director of any other listed

company in Hong Kong or overseas in the past three years preceding the Latest Practicable Date.

COMPANY SECRETARY

Ms. Kwan Wai Ling (關慧玲女士) was appointed as our company secretary in October 2020.

Please refer to the section headed ‘‘— Senior Management’’ above. Ms. Kwan is one of the members of

our senior management.


– 171 –


COMPLIANCE ADVISER

We have appointed China Everbright Capital Limited as our compliance adviser pursuant Rule

3A.19 of the Listing Rules. Pursuant to Rule 3A.23 of the Listing Rules, the compliance adviser will

advise us:

(i) before the publication of any regulatory announcements, circulars or financial reports under

any applicable laws, rules, codes and guidelines;

(ii) where we propose to use the [REDACTED] of the [REDACTED] in a manner different from

that detailed in this document or where our business activities, development or results deviate

from any forecast, estimate or other information in this document; and

(iii) where the Stock Exchange makes an inquiry to us regarding unusual movements in the price

or trading volume of our Shares or other issues under Rule 13.10 of the Listing Rules.

The term of appointment of the compliance adviser of our Company commences on the

[REDACTED] and end on the date on which we comply with Rule 13.46 of the Listing Rules in respect

of our financial results for the first full financial year commencing after the [REDACTED] and such

appointment may be subject to extension by agreement.

BOARD COMMITTEES

Our Board appoints various board committees. We have formed three board committees in

accordance with the corporate governance requirements under the Listing Rules, namely, the audit

committee, the remuneration committee and the nomination committee.

Audit Committee

Our Company has established an audit committee with written terms of reference in compliance

with Rule 3.21 of the Listing Rules and paragraphs C.3 and D.3 of the Corporate Governance Code as

set out in Appendix 14 to the Listing Rules. The primary duties of the audit committee are to make

recommendations to our Board on the appointment, re-appointment and replacement of external auditors;

review the financial statements and material advice in respect of financial reporting; oversee the internal

control system of our Company; and perform other duties and responsibilities as may be assigned by our

Board.

The audit committee consists of three members, all of whom are independent non-executive

Directors, namely, Mr. David Michael Norman, Mr. Ip Koon Wing Ernest and Mr. Wong Kwok Shing

Thomas. Mr. Ip Koon Wing Ernest is the chairman of the audit committee.

Remuneration Committee

Our Company has established a remuneration committee with written terms of reference in

compliance with Rule 3.25 of the Listing Rules and paragraph B1 of the Corporate Governance Code as

set out in Appendix 14 to the Listing Rules. The primary duties of the remuneration committee are to

make recommendations to our Board on the remuneration policy and structure relating to all Directors

and the senior management of our Group; determine the terms of remuneration and benefit package of

each of our executive Directors and senior management members; and review and approve performance-

based remuneration.


– 172 –


The remuneration committee consists of five members, comprising all the independent non-

executive Directors, namely, Mr. David Michael Norman, Mr. Ip Koon Wing Ernest and Mr. Wong

Kwok Shing Thomas, and two executive Directors, namely, Dr. Kenneth Tsang and Mr. Shiu. Mr. Wong

Kwok Shing Thomas is the chairman of the remuneration committee.

Nomination Committee

Our Company has established a nomination committee with written terms of reference in

compliance with paragraph A.5 of the Corporate Governance Code as set out in Appendix 14 to the

Listing Rules. The primary duties of the nomination committee are to review the structure, size and

composition of our Board, assess the independence of the independent non-executive Directors and

make recommendations to our Board about the relevant matters in relation to the appointment and re-

appointment of Directors and the succession planning for our Directors.

The nomination committee consists of five members, comprising all the independent non-executive

Directors, namely, Mr. David Michael Norman, Mr. Ip Koon Wing Ernest and Mr. Wong Kwok Shing

Thomas, and two executive Directors, namely, Dr. Kenneth Tsang and Mr. Shiu. Dr. Kenneth Tsang is

the chairman of the nomination committee.

BOARD DIVERSITY

With a view to enhancing the quality of our Board’s performance, we have adopted a board

diversity policy, which sets out the approach to achieve diversity on our Board. The board diversity

policy provides that our Company should endeavour to ensure that members of our Board have the

appropriate skills, experience and diversity of perspectives that are required to support the execution of

its business strategy. In accordance with the board diversity policy, we seek to achieve diversity on our

Board through the consideration of a number of factors, including but not limited to, professional

experience, skills and knowledge, gender, age, cultural and educational background, ethnicity and length

of service. Upon [REDACTED], our nomination committee will review the board diversity policy from

time to time. We will assess annually the diversity profile of our Board, including gender balance, and

take opportunities to increase the proportion of female members over time. We will report the

implementation of our board diversity policy on an annual basis.

COMPLIANCE WITH CORPORATE GOVERNANCE CODE

Our Board recognises the importance of good corporate governance in management and internal

procedures. Code provision A.2.1 of the Corporate Governance Code as set out in Appendix 14 to the

Listing Rules provides that the responsibilities between the chairman and the chief executive officer

should be segregated and should not be performed by the same individual. However, we do not have a

separate chairman and chief executive officer and Dr. Kenneth Tsang currently performs these two roles.

Dr. Kenneth Tsang is our founder and has been managing our business and overall strategic

development since the establishment of our Group. Given Dr. Kenneth Tsang’s familiarity with the

operations of our Group, we will benefit from consistent leadership as well as effective and efficient

management. Further, we have implemented a check-and-balance mechanism through our Board and the

three independent non-executive Directors. In addition to Dr. Kenneth Tsang, our Board consists of

three executive Directors who are also familiar with the overall operations and business management of

our Company. The three independent non-executive Directors are able to retain independence of

character and judgment and express their views and make their independent judgment without any

constraint. Our Company will seek our Board’s views and advice on major issues. As such, our

Directors are of the view that vesting the roles of both the chairman of our Board and the chief


– 173 –


executive officer in Dr. Kenneth Tsang is in the best interest of our Group. Our Directors further

consider that the balance of power and authority within our Group will not be impaired and hence the

interest of minority Shareholders would not be adversely affected. We will continue to review and

consider the separation of the roles of chairman of our Board and the chief executive officer at an

appropriate time by taking the overall business development into account.

REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT

Our Directors and members of the senior management receive remuneration in the form of fees/salaries and allowances, bonuses and other benefits in kind such as contributions to pension plans.

The aggregate amount of remuneration (including fees, salaries, contributions to pension schemes,discretionary bonuses, housing and other allowances and other benefits in kind) paid by us to ourDirectors for the three years ended 31 March 2021 and the six months ended 30 September 2021 wasnil, nil, nil and nil, respectively. No other emoluments have been paid or are payable by our Companyto our Directors in respect of the three years ended 31 March 2021 and the six months ended 30September 2021.

The aggregate amount of remuneration (including fees, salaries, contributions to pension schemes,discretionary bonuses, housing and other allowances and other benefits in kind) paid by us to the fivehighest paid individuals for the three years ended 31 March 2021 and the six months ended 30September 2021 was approximately HK$4.8 million, HK$7.1 million, HK$8.6 million and HK$4.8million, respectively.

During the Track Record Period, no remuneration was paid by our Company to, or receivable by,our Directors or the five highest paid individuals as an inducement to join or upon joining ourCompany. No compensation was paid by our Company to, or receivable by, our Directors or the fivehighest paid individuals during the Track Record Period for loss of office. None of our Directors waivedor agreed to waive any remuneration during the Track Record Period.

Save as disclosed in this document, no other payments have been paid, or are payable, by ourGroup to our Directors or the five highest paid individuals during the Track Record Period. Under thearrangements currently in force, the aggregate remuneration (excluding payment pursuant to anydiscretionary benefits or bonuses or other fringe benefits) of our Directors for the year ending 31 March2022 is estimated to be approximately HK$0.8 million.

For additional information on the remuneration of our Directors during the Track Record Periodand information on the five highest paid individuals, please refer to Note 8 to the Accountant’s Reportcontained in Appendix I to this document.

OUR SUCCESSION PLAN

We have established a succession plan. The primary objective of our succession plan is to ensurethe effective performance of our Group through leadership continuity and selection of suitablecandidates for key positions. Our succession plan will be reviewed on a continuous basis, taking intoaccount the recommendations made by our nomination committee.

In light of our succession plan, our nomination committee will perform the following:

. setting the criteria to be eligible for the candidacy, including professional qualifications,medical service experience, management experience;

. identifying potential individual(s) (whether within or outside our Group) who possess(es) thepersonality, competency and leadership skills that may duly serve our Company and itsshareholders; and


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. evaluating succession planning efforts, reporting the findings and making recommendations

to our Board.

As advised by our executive Directors, each of them currently plays a positive role in overseeing

the operations of our Group and has no plan or desire to step down in the next few years. In addition,

our Directors believe that in the event that any of our executive Directors should become unable to

perform his/her duties or retires from his/her directorship in due course, our succession plan will ensure

that we will be able to seek candidates capable of taking on the leadership role. Pursuant to our present

succession plan, we have potential candidates for the directorship of our Group if there is a need for a

replacement.


We have conditionally adopted the Share Option Scheme. The principal terms of the Share Option

Scheme are summarised under the section headed ‘‘Statutory and General Information — G. Share

Option Scheme’’ in Appendix V to this document.


– 175 –


SUBSTANTIAL SHAREHOLDERS

So far as our Directors are aware, immediately following the completion of the [REDACTED] and

the [REDACTED] (without taking into account any Shares which may be allotted and issued pursuant to

the exercise of the [REDACTED] or any options which may be granted under the Share Option

Scheme), based on the information available on the date of this document, each of the following

persons/entities will have an interest or a short position in the Shares or underlying Shares which would

be required to be disclosed to our Company and the Stock Exchange under the provisions of Divisions 2

and 3 of Part XV of the SFO, or, directly or indirectly, be interested in 10% or more of the nominal

value of any class of share capital carrying rights to vote in all circumstances at general meetings of any

other member of our Group:

Interests in Our Company

NameCapacity/Nature

of interest

Number of Sharesheld as at the dateof this document(1)

Percentage ofshareholding as atthe date of this

document

Number of Sharesheld immediately

after the[REDACTED]

and the[REDACTED](1)

Percentage ofshareholding

immediately afterthe [REDACTED]

and the[REDACTED]

CHG(2) Beneficial owner 726,250 (L) 67.66%

[REDACTED]

Dr. Kenneth Tsang(2) Interest in a controlledcorporation/Interest of

concert party

726,250 (L) 67.66%

Peak Summit(2) Interest in a controlledcorporation/Interest of

concert party

726,250 (L) 67.66%

Dr. Adam Leung(2) Interest in a controlled

corporation/Interest ofconcert party

726,250 (L) 67.66%

Heroic Wealth(2) Interest in a controlledcorporation/Interest ofconcert party

726,250 (L) 67.66%

Dr. Jason Fong(2) Interest in a controlledcorporation/Interest ofconcert party

726,250 (L) 67.66%

Mastermind Intelligence(2) Interest in a controlledcorporation/Interest of

concert party

726,250 (L) 67.66%

Dr. Chu Leung Wing(2) Interest in a controlled


726,250 (L) 67.66%

Grateful Mind(2) Interest in a controlled


726,250 (L) 67.66%


– 176 –


NameCapacity/Nature

of interest

Number of Sharesheld as at the dateof this document(1)

Percentage ofshareholding as atthe date of this

document

Number of Sharesheld immediately

after the[REDACTED]

and the[REDACTED](1)

Percentage ofshareholding

immediately afterthe [REDACTED]

and the[REDACTED]

Dr. Jenny Tsang(2) Interest in a controlled


726,250 (L) 67.66%

[REDACTED]

Property Linkage(2) Interest in a controlledcorporation/Interest ofconcert party

726,250 (L) 67.66%

Mr. Shiu(2) Interest in a controlledcorporation/Interest ofconcert party

726,250 (L) 67.66%

Wealth Basin(2) Interest in a controlledcorporation/Interest of

concert party

726,250 (L) 67.66%

Mrs. Chen(2) Interest in a controlled


726,250 (L) 67.66%

Les Trois(2) Interest in a controlled


726,250 (L) 67.66%

Notes:

(1) The letter ‘‘L’’ denotes the person’s/entity’s long position (as defined under Part XV of the SFO) in the Shares.

(2) CHG is beneficially owned as to 42.42% by Peak Summit (which is wholly owned by Dr. Kenneth Tsang), 23.74% byHeroic Wealth (which is wholly owned by Dr. Adam Leung), 10.74% by Mastermind Intelligence (which is wholly ownedby Dr. Jason Fong), 2.46% by Grateful Mind (which is wholly owned by Dr. Chu Leung Wing), 6.54% by Property Linkage

(which is wholly owned by Dr. Jenny Tsang), 9.10% by Wealth Basin (which is wholly owned by Mr. Shiu) and 5.00% byLes Trois (which is wholly owned by Mrs. Chen). On 23 October 2020, CHG, Dr. Kenneth Tsang, Dr. Adam Leung, Dr.Jason Fong, Dr. Chu Leung Wing, Dr. Jenny Tsang, Mr. Shiu, Mrs. Chen, Peak Summit, Heroic Wealth, MastermindIntelligence, Grateful Mind, Property Linkage, Wealth Basin and Les Trois entered into the Concert Party Deed, confirming,

among other things, that they are parties acting in concert since the date on which they became interested in our Group, andwill continue to act in concert with each other after [REDACTED]. Accordingly, by virtue of the SFO, Dr. Kenneth Tsang,Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing, Dr. Jenny Tsang, Mr. Shiu, Mrs. Chen, Peak Summit, Heroic

Wealth, Mastermind Intelligence, Grateful Mind, Property Linkage, Wealth Basin and Les Trois are deemed to be interestedin all the Shares held by CHG.


– 177 –


Interests in Members of Our Group

Name Company concerned

Capacity/Nature ofinterest

Number ofshares held asat the LatestPracticable

Date

Percentage ofshareholdingas at theLatest

PracticableDate

Number ofshares heldimmediatelyafter the

[REDACTED]and the

[REDACTED]

Percentage ofshareholdingimmediatelyafter the

[REDACTED]and the

[REDACTED]

Dr. Ooi Gaik Cheng HKID (Lab) Beneficial

owner

1,300 13%

[REDACTED]Mr. Teo Man Lung Peter HKID (Lab) Beneficial

owner1,000 10%

Ms. Tang Wan Yin HKID (Lab) Beneficialowner

1,000 10%

Save as disclosed above, our Directors are not aware of any person/entity who/which will,

immediately following the [REDACTED] and the [REDACTED] (without taking into account any

Shares which may be allotted and issued pursuant to the exercise of the [REDACTED] or any options

which may be granted under the Share Option Scheme), have an interest or a short position in the Shares

or underlying Shares which would be required to be disclosed to our Company and the Stock Exchange

under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, directly or indirectly, be interested

in 10% or more of the nominal value of any class of share capital carrying rights to vote in all

circumstances at general meetings of any member of our Group.


– 178 –


SHARE CAPITAL

The following is a description of the share capital of our Company in issue and to be issued asfully paid or credited as fully paid immediately after the [REDACTED] and the [REDACTED] (withouttaking into account any Shares which may be allotted and issued pursuant to the exercise of the[REDACTED] or any options which may be granted under the Share Option Scheme):

Authorised share capital

Nominal valueHK$

38,000,000,000 Shares of par value of HK$0.00001 each 380,000

Shares in issue and to be issued, fully paid or credited as fully paid immediately upon completion of the[REDACTED] and the [REDACTED]

Nominal valueHK$

1,073,307 Shares in issue as at the date of this document 10.73307[REDACTED] Shares to be issued pursuant to the [REDACTED] [REDACTED][REDACTED] Shares to be issued pursuant to the [REDACTED] [REDACTED]

[REDACTED] Total [REDACTED]

Assuming the [REDACTED] is exercised in full, (i) the number of Shares to be issued pursuant tothe [REDACTED] will be [REDACTED] Shares (with additional [REDACTED] Shares to be allottedand issued pursuant to the [REDACTED]); and (ii) the issued share capital of our Company immediatelyfollowing completion of the [REDACTED] will be HK$[REDACTED] divided into [REDACTED]Shares.

ASSUMPTIONS

The table above assumes that the [REDACTED] becomes unconditional and the Shares are issuedpursuant to the [REDACTED] and the [REDACTED]. It does not take into account any Shares whichmay be allotted and issued pursuant to the exercise of the [REDACTED] or the options which may begranted under the Share Option Scheme or any Shares which may be issued or repurchased by uspursuant to the general mandates granted to our Directors to issue or repurchase Shares as describedbelow.

MINIMUM PUBLIC FLOAT

Pursuant to Rule 8.08(1) of the Listing Rules, at the time of the [REDACTED] and at all timesthereafter, our Company must maintain the minimum prescribed percentage of 25% of our issued sharecapital in the hands of the public (as defined under the Listing Rules).

RANKING

The [REDACTED] are ordinary shares in the share capital of our Company and will rank paripassu in all respects with all the Shares currently in issue or to be issued as mentioned in this document,and in particular, will rank in full for all dividends or other distributions declared, made or paid on theShares in respect of a record date which falls after the date of this document save for the entitlementunder the [REDACTED].

SHARE CAPITAL

– 179 –



Our Company has conditionally adopted the Share Option Scheme. The principal terms of the

Share Option Scheme are summarised in the section headed ‘‘Statutory and General Information — G.

Share Option Scheme’’ in Appendix V to this document.

Our Group did not have any outstanding share options, warrants, convertible instruments, pre-

[REDACTED] share options or similar rights convertible into Shares as at the Latest Practicable Date.

[REDACTED]

Pursuant to the resolutions in writing of the Shareholders passed on [.], subject to the share

premium account of our Company being credited as a result of the allotment and issue of the

[REDACTED] pursuant to the [REDACTED], our Directors were authorised to allot and issue a total of

[REDACTED] Shares credited as fully paid to our Shareholders on the register of members of our

Company at the close of business of the business day immediately preceding the [REDACTED] (Hong

Kong time), or such other time as a Director in his/her absolute discretion may determine, by way of

capitalisation of the sum of HK$[REDACTED] standing to the credit of the share premium account of

our Company, and the Shares to be allotted and issued pursuant to this resolution shall rank pari passu

in all respects with the existing issued Shares. For further details, please see the section headed

‘‘Statutory and General Information — A. Further information about Our Company — 3. Resolutions in

writing passed by our Shareholders on [.]’’ in Appendix V to this document.

CIRCUMSTANCES UNDER WHICH MEETING IS REQUIRED

As a matter of the Companies Act, an exempted company is not required by law to convene any

general meetings or class meetings unless the articles of association otherwise provide. The holding of

general meeting or class meeting is prescribed for under the articles of association of a company and the

Companies Act. Accordingly, we will hold general meetings as prescribed under our Articles of

Association and the Companies Act. A summary of our Articles of Association is set out in Appendix

IV to this document.

GENERAL MANDATES GRANTED TO OUR DIRECTORS

Subject to the [REDACTED] becoming unconditional, general mandates have been granted to our

Directors to allot and issue Shares and to repurchase Shares.

For further details of this general mandate. Please see the section headed ‘‘Statutory and General

Information — A. Further Information about Our Company — 3. Resolutions in writing passed by our

Shareholders on [.]’’ in Appendix V to this document.

SHARE CAPITAL

– 180 –


You should read this section in conjunction with our audited consolidated financial statements,

including the notes thereto, as set out in the Accountant’s Report included in Appendix I to this

document. Our Group’s consolidated financial statements have been prepared in accordance with the

Hong Kong Financial Reporting Standards (‘‘HKFRS’’). You should read the entire Accountant’s

Report and not merely rely on the information contained in this section.

The following discussion and analysis contains certain forward-looking statements that reflect

the current views with respect to future events and financial performance. These statements are based

on assumptions and analyses made by our Group in light of our experience and perception of

historical trends, current conditions and expected future developments, as well as other factors our

Group believes are appropriate under the circumstances. However, whether actual outcomes and

developments will meet our Group’s expectations and projections depends on a number of risks and

uncertainties over which our Group does not have control. For further information, you should see

the section headed ‘‘Risk Factors’’.

The following discussion and analysis also contain certain amounts and percentage figures that

have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables

may not be an arithmetic aggregation of the figures preceding them and all monetary amounts shown

are approximate amounts only.

For the purposes of this section, each of the years ended 31 March 2019, 2020 and 2021 is also

respectively referred to and interchangeably used as ‘‘FY2019’’, ‘‘FY2020’’ and ‘‘FY2021’’.

OVERVIEW

We are an integrated private medical services provider in Hong Kong with specialist doctors

renowned in their respective fields of expertise, providing specialist medical services and complemented

by various allied health services and medical management services. According to Frost & Sullivan, we

ranked sixth as a multi-specialties medical centre operator in Hong Kong with a market share of

approximately 1.4% in terms of revenue generated from provision of specialty services (including

internal medicine and surgery related specialty services) in 2020, and ranked fourth in terms of total

revenue generated from provision of internal medicine specialty services, amongst all private multi-

specialties medical centre operators in Hong Kong in 2020. As at the Latest Practicable Date, we

operated three Medical Centres, which comprise of our Integrated Flagship Medical Centre, HKMC II

and a psychiatric centre under our brand ‘‘Hong Kong Medical Consultants’’; and we operated three

Diagnostic Centres, all of which are located in Central, Hong Kong. Our clients mainly include


We are committed to delivering efficient and exemplary medical services across specialties and

disciplines. Our medical services business operates under two main service streams:

1. Specialist medical services: we provide a wide range of specialty services including

cardiology, respiratory medicine, gastroenterology & hepatology, nephrology, neurology,

psychiatry, endocrinology, diabetes & metabolism, geriatric medicine, oncology, paediatrics,

rheumatology, dental surgery, family medicine and clinical microbiology and infection at our

Medical Centres as well as inpatient services at private hospitals in Hong Kong; and

FINANCIAL INFORMATION

– 181 –


2. Allied health services: we provide various allied health services including clinical

psychology, speech therapy, nutritional therapy and psychological counselling at our Medical

Centres as well as imaging, diagnostic and laboratory services at our Diagnostic Centres. We

also provide vaccination services at our Medical Centres and CVC Centres.

To a much lesser extent, we provide medical management services to certain medical practitioners

in relation to administrative and operational functions such as clinic management, accounting and

finance, human resources, central procurement of pharmaceuticals and clinical supplies, facilities and

lease management, regulatory compliance, marketing and business development, medical record

management and information technology systems.

As at the Latest Practicable Date, our professional team consisted of 17 specialist doctors working

for us on a full time and an exclusive basis, covering 14 specialties and 13 Panel Specialists working for

us on a non-exclusive basis, covering 11 specialties. For details, please see the section headed ‘‘Business

— Our Professional Team’’. In addition, we provide ophthalmology services under our brand through

our management services arrangement with three ophthalmologists operating at the HKMC

Ophthalmology Centre.

During the Track Record Period, we recorded revenue of HK$195.7 million, HK$248.4 million,

HK$251.4 million and HK$166.0 million for the years ended 31 March 2019, 2020 and 2021 and the six

months ended 30 September 2021, respectively; and profit of HK$60.0 million, HK$49.7 million,

HK$20.4 million and HK$15.7 million over the same respective periods.

BASIS OF PRESENTATION

Our Company was incorporated in the Cayman Islands on 21 September 2020 as an exempted

company with limited liability under the Companies Act. In preparation of the [REDACTED], our Group

underwent the Reorganisation. As a result of the Reorganisation, our Company became the holding

company of the companies now comprising the Group which were under the control of our Controlling

Shareholder, Dr. Kenneth Tsang. For further details of the Reorganisation, please see the section headed

‘‘History, Reorganisation and Corporate Structure’’ and Note 1 to our consolidated financial statements

set out in the Accountant’s Report included in Appendix I to this document.

The Group’s historical financial information was prepared in accordance with HKFRS and

consistently adopted throughout the Track Record Period all standards and amendments that were

effective for accounting periods beginning on or before 1 August 2020, which include HKFRS 9

‘‘Financial Instruments’’, HKFRS 15 ‘‘Revenue from contracts with customers, HKFRS 16 ‘‘Leases’’ and

Amendment to HKFRS 16.

Our financial statements during the Track Record Period may not be easily comparable between

each period. Five of our Equity Partner Doctors joined us as specialist doctors at various dates during

the year ended 31 March 2019, which contributed significantly to our revenue growth for both FY2019

and FY2020. In October 2019, we acquired Hong Kong Imaging, which has two imaging and diagnoses

centres and one laboratory located in Central, Hong Kong in order to supplement our medical services.

The acquisition of Hong Kong Imaging did not constitute a major transaction for the purposes of Main

Board Listing Rule 4.05A. However, due to the combination of the above factors, changes in our

financial statements during the Track Record Period were significant, and they may not be easily

comparable.


– 182 –


SIGNIFICANT FACTORS AFFECTING OUR FINANCIAL RESULTS

Our results of operations and financial performance have been and will continue to be affected bya number of factors, many of which may be beyond our control, including those factors set out in thesection headed ‘‘Risk Factors’’ and those set out below.

Number of Patient Visits/Admissions and Average Spending Per Patient

The financial performance of our Group is primarily affected by the number of patient visits/hospital admissions and their respective spending per visit/admission. During the Track Record Period,our number of patient visits and inpatient hospital admissions increased from 33,992 for the year ended31 March 2019 to 60,099 for the year ended 31 March 2021, representing an increase of 76.8%, mainlybecause five Equity Partner Doctors joined us as specialist doctors at various times during the yearended 31 March 2019 and we acquired Hong Kong Imaging in October 2019. During FY2019, Dr.Matthew Ng (gastroenterology and hepatology) and Dr. Lo Wai Kei (nephrology) joined us as specialistdoctors in April 2018, Dr. Clement Lee (cardiology) joined us as a specialist doctor in May 2018, Dr.Boron Cheng (cardiology) joined us as a specialist doctor in July 2018, and Dr. Ada Ma (oncology)joined us as a specialist doctor in October 2018.

Our number of patient visits/admissions increased from 33,992 for the year ended 31 March 2019to 48,855 for the year ended 31 March 2020, representing an increase of 43.7%, mainly due to (i) thefull-year of service contribution from the five Equity Partner Doctors in FY2020 that joined at variousdates during FY2019, (ii) Dr. Eddie Cheung (paediatrics) joined us as a specialist doctor in August 2019and (iii) we acquired Hong Kong Imaging in October 2019.

Our number of patient visits/admissions increased from 48,855 for year ended 31 March 2020 to60,099 for the year ended 31 March 2021, representing an increase of 23.0%, mainly due to (i) Dr.Eddie Cheung joined us as a specialist doctor in August 2019 and (ii) we acquired Hong Kong Imagingin October 2019.

Our number of patient visits/admissions increased from 27,041 for the six months ended 30September 2020 to 32,073 for the six months ended 30 September 2021, representing an increase of18.6%, mainly due to the addition of three new Employee Doctors and increased patient visits andrecovery from the COVID-19 pandemic.

For further information on our number of patient visits/admissions and average spending perpatient visit/admission, please see the section headed ‘‘— Description of Selected Items of theConsolidated Statements of Comprehensive Income — Revenue’’ below. Our revenue will continue to beaffected by both number of patient visits/admissions and average spending per patient in the future.Thus, any changes to these two factors will affect our revenue and results of operation.

Ability to Attract and Retain Medical and Healthcare Professionals

We depend on our medical team to provide medical services to our clients who look for qualitymulti-disciplinary specialist medical services. Competition for skilled and qualified medicalprofessionals is intense. While we have not experienced any material disputes with any of our specialistdoctors during the Track Record Period and our key doctors, including our Founding Doctors and EquityPartner Doctors, will enter into the New Service Agreements that are effective upon the [REDACTED]and do not expire until 31 March 2026, there is no guarantee that we will be able to continue to retainthem. In addition, it is possible that our specialist doctors and other healthcare professionals may decideto cease serving our Group for reasons beyond our control. In such event, our business and financialperformance may be adversely affected. Our Group recruits new members for our medical and healthcareprofessional team on a continuous basis, and recruitment of suitable candidates can be competitive as wecompete with both public and private healthcare sector, and the supply of specialists doctors and allied


– 183 –


health professionals is limited. If we are not able to recruit suitable candidates, our business andfinancial performance may be adversely affected. Please see the section headed ‘‘Risk Factors — RisksRelating to Our Business — We are dependent on our professional team of specialist doctors and ourability to attract and retain skilled and qualified healthcare professionals’’.

Fluctuation in Service Fees that We Pay Our Equity Partner Doctors and Panel Specialists

As at the Latest Practicable Date, we had 17 specialist doctors that work for us on an exclusive

basis. Depending on the individual arrangements with each of our specialist doctors, we offer different

remuneration packages based on various factors, which include but is not limited to, their respective

medical specialty, experience, qualifications, services provided, prior remuneration package, as well as

commercial negotiation with the respective medical practitioner to attract or retain him/her in light of the

competitive healthcare services market in Hong Kong where there is shortage of medical practitioners.

Accordingly, the compensation arrangements for these doctors differ based on whether the doctor is a

Founding Doctor, Equity Partner Doctor, Employee Doctor or Panel Specialist. Our Founding Doctors,

Equity Partner Doctors and Panel Specialists are considered independent contractors; and we paid

service fees to our Equity Partner Doctors and Panel Specialists during the Track Record Period, but we

did not pay any service fees to our Founding Doctors. Our Employee Doctors do not receive service

fees, but instead are provided with wages and salaries, as they are our employees.

Please see the section headed ‘‘Business — Our Professional Team — Compensation Arrangements

with Specialist Doctors and Panel Specialists’’ for further details on the various compensation

arrangements we have with our specialist doctors and Panel Specialists. Please also see the section

headed ‘‘Risk Factors — Risks Relating to Our Business — The compensation we pay to our specialist

doctors that are Founding Doctors and Equity Partner Doctors have had, and are expected to continue to

have, a significant impact on our business, financial position and profitability’’.

For each of the three years ended 31 March 2021 and the six months ended 30 September 2021,

the total service fees paid to our specialist doctors amounted to approximately HK$41.9 million,

HK$66.1 million, HK$64.2 million and HK$39.6 million, respectively, accounting for 21.4%, 26.6%,

25.5% and 23.9% of our total revenue for the same respective periods. We cannot assure you that our

remuneration costs will not increase or that we will be able to transfer such costs to our clients, which

may in turn materially and adversely affect our profitability of our business operations.

For illustration purposes only, the following sensitivity analysis shows the impact of hypothetical

fluctuations in our service fees that we paid to our specialist doctors on our profit before tax during the

Track Record Period, assuming the fluctuation of service fee to be 5% and 10% during the Track Record

Period with other variables remaining constant:

Decrease/increase in our profit before tax


2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000(Unaudited)

Hypothetical fluctuation of servicefees to our specialist doctors

Assuming increase/decrease of 5.0% –/+ 2,092 –/+ 3,306 –/+ 3,212 –/+ 1,504 –/+ 1,980

Assuming increase/decrease of 10.0% –/+ 4,185 –/+ 6,613 –/+ 6,424 –/+ 3,009 –/+ 3,960


– 184 –


Fluctuation in Employee Benefit Expenses

Our employee benefit expenses mainly represent wages and salaries and other remuneration paid to

our Employee Doctors, pharmacists, nurses, healthcare assistants, as well as finance, administrative and

other staff for the operation of Medical Centres and Diagnostic Centres. Employee benefit expenses

exclude service fees we pay to our Equity Partner Doctors and Panel Specialists as discussed above. For

each of the three years ended 31 March 2021 and the six months ended 30 September 2021, we incurred

employee benefit expenses of HK$15.7 million, HK$28.1 million, HK$32.8 million and HK$19.9

million, representing 8.0%, 11.3%, 13.0% and 12.0% of our revenue for the same periods, respectively.

Employee benefit expenses were one of the major components of our cost of sales and administrative

expenses during the Track Record Period. As a result, an increase in employee benefit expenses may

have a significant impact on our result of operations.


fluctuations in our employee benefit expenses on our profit before tax during the Track Record Period,

assuming the fluctuation of employee benefit expenses to be 5% and 10% during the Track Record




2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Hypothetical fluctuation of employeebenefit expenses

Assuming increase/decrease of 5% –/+ 785 –/+ 1,405 –/+ 1,639 –/+ 696 –/+ 997

Assuming increase/decrease of 10% –/+ 1,569 –/+ 2,810 –/+ 3,279 –/+ 1,393 –/+ 1,993

Fluctuation in Rental Expenses

We lease various properties for our operations, including our Medical Centres and Diagnostic

Centres. Leases are recognised as right-of-use assets with corresponding liabilities at the date of which

the respective leased asset is available for use by the Group. Right-of-use assets are generally

depreciated over the lease term on a straight-line basis. As at 31 March 2019, 2020 and 2021 and 30

September 2021, we recorded right-of-use assets of HK$16.9 million, HK$23.2 million, HK$225.8

million and HK$214.4 million, representing 6.6%, 6.9%, 51.1% and 46.7% of our total assets as at the

same dates, respectively. Right-of-use assets increased significantly as at 31 March 2021 mainly due to

the new lease of the Integrated Flagship Medical Centre in February 2021 and the leasehold land portion

of our purchase of Integrated Diagnostic Centre in March 2021. Depreciation of our right-of-use assets

was HK$8.2 million, HK$14.7 million, HK$19.1 million and HK$13.4 million for each of the three

years ended 31 March 2021 and the six months ended 30 September 2021, respectively, and represented

4.2%, 5.9%, 7.6% and 8.1% of our revenue for the same period, respectively. Depreciation of right-of-

use assets were one of the major components of our cost of sales and administrative expenses during the

Track Record Period. As a result, an increase in such amounts may have a significant impact on our

result of operations.


fluctuations in our depreciation of right-of-use assets on our profit before tax during the Track Record


– 185 –


Period, assuming the fluctuation of depreciation amount to be 5% and 10% during the Track Record



Year ended 31 March

Six monthsended

30 September20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

Hypothetical fluctuation ofdepreciation ofright-of-use assets

Assuming increase/decrease of 5% –/+ 409 –/+ 733 –/+ 957 –/+ 671

Assuming increase/decrease of 10% –/+ 818 –/+ 1,467 –/+ 1,913 –/+ 1,343

CRITICAL ACCOUNTING POLICIES, ESTIMATE AND JUDGEMENTS

Our Directors have identified certain accounting policies that are significant to the preparation of

our consolidated financial statements. The significant accounting policies which are important for an

understanding of our financial condition and results of operation are set out in detail in Note 2 to our

consolidated financial statements set out in the Accountant’s Report included in Appendix I to this

document. Some of the accounting policies involve subjective assumptions and estimates, as well as

complex judgements relating to accounting items. The significant accounting estimates and judgements

are set out in detail in Note 4 to our consolidated financial statements set out in the Accountant’s Report

included in Appendix I to this document. The determination of these items requires management

judgements based on information and financial data that may change in future periods.


– 186 –


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– 187 –


Revenue Recognition

The Group’s revenue is primarily derived from:

. outpatient services in medical centres, including consultation and sales of pharmaceutical

goods;

. provision of outpatient and inpatient services in hospitals;

. provision of imaging and diagnostic services; and

. provision of management services to medical centres.

Medical centre and hospital income are recognised in the accounting period in which the services

are rendered over the period of the time by reference to the progress towards complete satisfaction of

performance obligation. The progress towards the complete satisfaction of performance obligation is

measured by direct measurement of the value of individual service transferred to the customer.

Revenue from sales of pharmaceutical goods is recognised when control of the pharmaceutical

goods has transferred, being when the pharmaceutical goods are despatched to the customer and there is

no unfulfilled obligation that could affect the client’s acceptance of the pharmaceutical goods.

Revenue from imaging and diagnostic services is recognised when the imaging and diagnostic

reports are issued and passed to the customers.

Revenue from management services is recognised in the accounting period in which the related

services are rendered.

Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method. The consideration

transferred for the acquisition of a subsidiary comprises the sum of the fair values of the assets

transferred, liabilities incurred to the former owners of the acquired business, equity interests issued by

the Group, fair value of any asset or liability resulting from a contingent consideration arrangement, and

fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business

combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

The Group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition

basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s

net identifiable assets. Acquisition-related costs are expensed as incurred.

Goodwill is initially measured at cost, being the excess of the consideration transferred, amount of

any non-controlling interest in the acquired entity, and acquisition-date fair value of any previous equity

interest in the acquired entity over the fair value of the net identifiable assets acquired. If those amounts

are less than the fair value of the net identifiable assets of the business acquired, the difference is

recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future

are discounted to their present value as at the date of exchange. The discount rate used is the entity’s

incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an


– 188 –


independent financier under comparable terms and conditions. Contingent consideration is classified

either as equity or a financial liability. Amounts classified as a financial liability are subsequently

remeasured to fair value with changes in fair value recognised in profit or loss.

If the business combination is achieved in stages, the acquisition date carrying value of the

acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition

date. Any gains or losses arising from such remeasurement are recognised in profit or loss.

Impairment of Financial Instruments

The Group assesses on a forward looking basis the expected credit losses associated with its

financial assets carried at amortised cost. The impairment methodology applied depends on whether

there has been a significant increase in credit risk.

For trade receivables, the Group applies the simplified approach permitted by HKFRS 9, which

requires expected lifetime losses to be recognised from initial recognition of the receivables. The

provision matrix is determined based on historical observed default rates over the expected life of the

trade receivables with similar credit risk characteristics and is adjusted for forward-looking estimates. At

every reporting date the historical observed default rates are updated and changes in the forward-looking

estimates are analysed.

Impairment on other financial assets carried at amortised cost are measured as either 12-month

expected credit losses or lifetime expected credit losses, depending on whether there has been a

significant increase in credit risk since initial recognition. If a significant increase in credit risk of a

receivable has occurred since initial recognition, then impairment is measured as lifetime expected credit

losses. For further information, please see Note 3.1(b) to our consolidated financial statements set out in

the Accountant’s Report included in Appendix I to this document.


– 189 –


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

The following table sets out selected financial data from our consolidated statements of

comprehensive income during the Track Record Period, details of which are set out in the Accountant’s

Report included in Appendix I to this document. Our historical results presented below are not

necessarily indicative of the results that may be expected for any future period.


2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Revenue 195,660 248,394 251,434 121,264 166,000Cost of sales (111,145) (172,814) (185,504) (86,731) (125,998)

Gross profit 84,515 75,580 65,930 34,533 40,002

Other losses — — — — (963)

Selling and marketing expenses (913) (1,212) (2,328) (1,431) (746)

Administrative expenses (6,747) (16,421) (36,371) (16,489) (15,339)

Provision for impairment losses on

financial assets (4,622) (150) (200) — 55

Operating profit 72,233 57,797 27,031 16,613 23,009


Profit before income tax 71,619 59,182 26,789 16,967 20,284


Profit for the year 59,960 49,693 20,393 13,280 15,654

Profit attributable to:— Owners of the Company 59,960 50,194 21,643 13,869 15,270

— Non-controlling interests — (501) (1,250) (589) 384

59,960 49,693 20,393 13,280 15,654


– 190 –


DESCRIPTION OF SELECTED ITEMS OF THE CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME

Revenue

Our Group primarily generates revenue from the provision of specialist medical services and allied

health services. Our revenue from such services for each of the three years ended 31 March 2021 and

the six months ended 30 September 2021 was HK$195.7 million, HK$248.4 million, HK$251.4 million

and HK$166.0 million, respectively. The following table sets out the breakdown of our revenue by

service stream for the periods indicated:


2019 2020 2021 2020 2021


Medical Services:— Specialist medical services 192,273 98.3 232,427 93.6 218,006 86.7 106,398 87.7 127,838 77.0— Allied health services 12 0.0 13,137 5.3 36,483 14.5 16,246 13.4 42,120 25.3


revenue — — (1,768) (0.7) (7,586) (3.0) (3,647) (3.0) (6,223) (3.7)


Medical Management Services 3,375 1.7 4,598 1.8 4,531 1.8 2,266 1.9 2,265 1.4

Total 195,660 100.0 248,394 100.0 251,434 100.0 121,263 100.0 166,000 100.0


– 191 –


The

follow

ingtablesets

outthebreakd

ownof

ourreve

nuegeneratedfrom

theprov

isionof

medical

services

withkeyop

erationalinform

ationfor

theperiod

sindicated:

Yea

ren

ded

31Mar

chSixmon

thsen

ded

30Se

ptem

ber

2019

2020

2021

2020

2021

Rev

enue

Num

ber

ofpa

tient

visits/

admission

s

Ave

rage

reve

nue

per

visit(1

)Rev

enue

Num

ber

ofpa

tient

visits/

admission

s

Ave

rage

reve

nue

per

visit(1

)Rev

enue

Num

ber

ofpa

tient

visits/

admission

s

Ave

rage

reve

nue

per

visit(1

)Rev

enue

Num

ber

ofpa

tient

visits/

admission

s

Ave

rage

reve

nue

per

visit(1

)Rev

enue

Num

ber

ofpa

tient

visits/

admission

s

Ave

rage

reve

nue

per

visit(1

)

HK$’00

0%

HK$

HK$’00

0%

HK$

HK$’00

0%

HK$

HK$’00

0%

HK$

HK$’00

0%

HK$

(Una

udite

d)

Specialis

tmed

ical

serv

ices

—at

Med

ical

Cen

tres

102,56

253

.328

,505

3,59

814

0,55

957

.633

,048

4,25

313

7,77

455

.832

,490

4,24

168

,172

57.3

15,966

4,27

080

,157

49.0

18,370

4,36

3—

atprivateho

spita

ls89

,711

46.7

5,47

716

,380

91,868

37.7

8,01

311

,465

80,232

32.5

8,15

69,83

738

,226

32.1

3,83

69,96

547

,681

29.1

5,05

09,44

2

Sub-total

192,27

310

0.0

33,982

5,65

823

2,42

795

.341

,061

5,66

121

8,00

688

.340

,646

5,36

410

6,39

889

.419

,802

5,37

312

7,83

878

.123

,420

5,45

8

Allied

health

serv

ices

—Se

rvices

prov

ided

byallie

dhe

alth

profession

als

120.0

101,20

030

60.1

144

2,12

51,14

10.5

461

2,47

548

90.4

216

2,26

449

30.3

229

2,15

3—

CVC

Cen

tres

——

——

2,87

01.2

——

—19

,814

12.1

—

—La

boratory

&Diagn

ostic

services

——

——

12,831

5.3

7,65

01,67

732

,472

13.1

18,992

1,71

015

,757

13.3

7,02

32,24

421

,813

13.3

8,42

42,58

9

Totalbe

fore

elim

ination

192,28

510

0.0

33,992

5,65

724

5,56

410

0.7

48,855

5,02

625

4,48

910

3.1

60,099

4,23

412

2,64

410

3.1

27,041

4,53

516

9,95

810

3.8

32,073

5,29

9Elim

inationof

inter-segm

ent

reve

nue

——

—(1,768

)(0.7)

(1,171

)(7,586

)(3.1)

(4,600

)(3,647

)(3.1)

(2,206

)(6,223

)(3.8)

(3,428

)

Total

192,28

510

0.0

33,992

5,65

724

3,79

610

0.0

47,684

5,11

324

6,90

310

0.0

55,499

4,44

911

8,99

710

0.0

24,835

4,79

216

3,73

510

0.0

28,645

5,71

6

Note:

(1)

Average

revenu

epervisitis

calculated

bydividing

therevenu

egeneratedfrom

theparticular

catego

ryof

serviceby

thetotalnu

mberof

patientvisits/adm

ission

sun

derthesame

catego

ry.


– 192 –


Changes to our average revenue per patient visit/admission during the Track Record Period were

primarily due to changes in type of specialist medical services provided as well as the addition of

specialist doctors that joined us between the periods.

Average revenue per patient visit for our specialist medical services at our Medical Centres

increased from HK$3,598 per visit for the year ended 31 March 2019 to HK$4,253 per visit for the year

ended 31 March 2020. This change was mainly due to the addition of five Equity Partner Doctors who

joined us as specialist doctors at various times during the year ended 31 March 2019 covering various

specialties. In particular, the average revenue per patient visit from one of the five Equity Partner

Doctors, Dr. Ada Ma (oncology) was significantly higher than that of other specialist doctors, leading to

the increase. Average revenue per patient visit for our specialist medical services at our Medical Centres

decreased slightly from HK$4,253 per visit for the year ended 31 March 2020 to HK$4,241 per visit for

the year ended 31 March 2021 mainly due to changes in the mix of services provided between the

periods. Average revenue per patient visit for our specialist medical services at our Medical Centres

increased slightly from HK$4,270 per visit for the six months ended 30 September 2020 to HK$4,363

per visit for the six months ended 30 September 2021.

Average revenue per patient admission for our specialist medical services at private hospitals

decreased from HK$16,380 per admission for the year ended 31 March 2019 to HK$11,465 per

admission for the year ended 31 March 2020. This decrease was mainly driven by greater patient

admissions by doctors that charged relatively lower fees per admission for their services, particularly,

our specialist doctor in nephrology and one of our cardiologists. The decrease between the years ended

31 March 2019 and 31 March 2020 was also due to the addition of Dr. Eddie Cheung, our paediatric

specialist, during FY2020, whose average revenue per patient admission was significantly lower than

that of our other specialist doctors. Average revenue per patient admission for our specialist medical

services at private hospitals decreased from HK$11,465 per admission for the year ended 31 March 2020

to HK$9,837 per admission for the year ended 31 March 2021 also mainly due to the addition of Dr.

Eddie Cheung in August 2019 whose average revenue per inpatient admission was substantially lower

than other specialist doctors coupled with lower average revenue per patient admission for Dr. Lo Wai

Kei (nephrology), Dr. Kenneth Tsang (respiratory), Dr. Adam Leung (cardiology) and Dr. Jason Fong

(neurology) as they provided more lower priced services during the year ended 31 March 2021. Average

revenue per patient visit for our specialist medical services at private hospitals decreased from

HK$9,965 per admission for the six months ended 30 September 2020 to HK$9,442 per admission for

the six months ended 30 September 2021, which was mainly attributable to lower average revenue per

inpatient admission for Dr. Kenneth Tsang and Dr. Adam Leung due to patient mix.

Cost of Sales

Our cost of sales primarily consists of (i) service fees to our specialist doctors, (ii) cost of

pharmaceuticals and medical consumables, (iii) employment benefit expenses, (iv) laboratory

examination and radiologist reporting fees, (v) depreciation of right-of-use assets, (vi) depreciation of

property, plant and equipment, (vii) credit card charges, (viii) commission fee paid to hospitals and (ix)

other expenses. Cost of sales was the largest component of our expenses during the Track Record

Period. For each of the three years ended 31 March 2021 and the six months ended 30 September 2021,

our cost of sales amounted to HK$111.1 million, HK$172.8 million and HK$185.5 million and

HK$126.0 million, respectively, representing 56.8%, 69.6%, 73.8% and 75.9% of our revenue for the

same period, respectively.


– 193 –


The following table sets out the breakdown of our cost of sales by nature for the periods indicated:


2019 2020 2021 2020 2021

HK$’000% of

revenue HK$’000% of




revenue(Unaudited)

Service fees to specialistdoctors(1) 41,847 21.4 66,128 26.6 64,236 25.5 30,089 24.8 39,604 23.8

Cost of pharmaceuticals andmedical consumables 33,502 17.1 49,165 19.8 46,019 18.3 22,405 18.5 27,757 16.7

Employee benefit expenses 13,078 6.7 22,968 9.3 27,051 10.8 11,658 9.6 16,741 10.1Laboratory examination and

radiologist reporting fee 8,775 4.5 13,394 5.4 18,207 7.2 8,597 7.1 11,060 6.7Depreciation of right-of-use

assets 7,390 3.8 11,251 4.5 15,461 6.2 6,324 5.2 11,591 7.0Depreciation of property,

plant and equipment 2,614 1.3 4,731 1.9 5,522 2.2 2,806 2.3 3,555 2.1Credit card charges 1,111 0.6 1,595 0.6 1,659 0.7 795 0.7 1,014 0.6Commission fee paid to

hospitals 1,231 0.6 1,247 0.5 995 0.4 466 0.4 647 0.4Other expenses(2) 1,597 0.8 2,335 0.9 6,354 2.5 3,591 2.9 14,029 8.5

111,145 56.8 172,814 69.5 185,504 73.8 86,731 71.5 125,998 75.9

Notes:

(1) During the Track Record Period, we did not pay any service fees to our Founding Doctors.

(2) Other expenses mainly include rental expenses for short-term operating leases and for the six months ended 30 September

2021 service fees for staff at the Kowloon Bay CVC Centre.

Gross Profit

Our gross profit represents our revenue less cost of sales. Our gross profit was HK$84.5 million,

HK$75.6 million, HK$65.9 million and HK$40.0 million for each of the three years ended 31 March

2021 and the six months ended 30 September 2021, respectively, and our gross profit margin was

43.2%, 30.4%, 26.2% and 24.1% for the same periods, respectively. Decreases in gross profit margin

between FY2019 and FY2020 was primarily driven by the addition of Equity Partner Doctors and

greater service fees paid to them as they generally only contribute a fixed amount to our profit before

tax. The service fee arrangements that our Equity Partner Doctors have with us effectively caps the

potential profitability that the Group can retain from them to the total amount of Committed Fee

Contributions. The decrease in gross profit margin between FY2020 and FY2021 was mainly due to

lower revenue from specialist medical services while we incurred greater fixed costs such as employee

benefit expenses and depreciation charges.

Administrative Expenses

Our administrative expenses primarily consist of (i) [REDACTED] expenses, (ii) employee benefit

expenses, (iii) depreciation of right-of-use assets, (iv) share-based payment expenses, (v) professional

fees, (vi) depreciation of property, plant and equipment, and (vii) others. For each of the three years

ended 31 March 2021 and the six months ended 30 September 2021, our administrative expenses

amounted to HK$6.7 million, HK$16.4 million, HK$36.4 million and HK$15.3 million, respectively,

representing 3.4%, 6.6%, 14.5% and 9.2% of our revenue for the same period, respectively.


– 194 –


The following tables sets out the breakdown of our administrative expenses for the periodsindicated:


2019 2020 2021 2020 2021

HK$’000% of





revenue(Unaudited)

[REDACTED] expenses — — — — 14,317 5.8 7,493 6.2 4,621 2.8Employee benefit expenses 2,616 1.3 5,136 2.1 5,738 2.3 2,270 1.9 3,189 1.9Depreciation of right-of-use

assets 785 0.4 3,416 1.4 3,672 1.5 1,836 1.5 1,836 1.1Share-based payment

expenses — — 530 0.2 2,963 1.2 845 0.7 1,862 1.1Professional fees 1,069 0.5 2,146 0.8 2,102 0.8 715 0.6 671 0.1Depreciation of property,

plant and equipment 245 0.1 1,402 0.6 845 0.3 411 0.3 399 0.2Other expenses(1) 2,032 1.1 3,791 1.5 6,734 2.6 2,919 2.4 2,761 2.0

6,747 3.4 16,421 6.6 36,371 14.5 16,489 13.6 15,339 9.2

Note:

(1) Other expenses mainly include director emoluments, insurance, repairs and maintenance, telephone, internet and utilities,and other miscellaneous administrative expenses.

Segment results

Our specialist medical services recorded a segment profit of HK$69.5 million, HK$56.8 million,HK$39.9 million and HK$18.5 million for the years ended 31 March 2019, 2020 and 2021 and the sixmonths ended 30 September 2021, respectively.

Our allied health services recorded a segment loss of HK$2.4 million and HK$1.8 million for theyears ended 31 March 2020 and 2021, respectively, primarily due to the loss incurred by Hong KongImaging after the acquisition by the Group in October 2019 and as a result of a slow down of itsbusiness due to the COVID-19 outbreak. For the full year ended 31 March 2020, Hong Kong Imagingrecorded a net loss of HK$2.6 million mainly due to (i) a decrease in customers as a result of the socialunrest in Hong Kong and the COVID-19 outbreak and (ii) increased repair and maintenance costs ofHK$1.0 million for its MRI machine and CT Scan machine due to the expiry of the warranty period forthose machines. Our allied health services recorded a segment profit of HK$7.5 million for the sixmonths ended 30 September 2021.

Finance (Costs)/Income, Net

Our finance costs mainly represent interest expenses on lease liabilities and our finance incomerepresents interest income from bank deposits. Our net finance costs amounted to HK$0.6 million for theyear ended 31 March 2019. We recorded net finance income of HK$1.4 million for the year ended 31March 2020, net finance costs of HK$0.2 million for the year ended 31 March 2021 and net financecosts of HK$2.7 million for the six months ended 30 September 2021.

Income Tax Expenses

Hong Kong profit tax has generally been provided for at the rate of 16.5% on the estimatedassessable profit for the three years ended 31 March 2021 and the six months ended 30 September 2021.Our income tax expenses for each of the three years ended 31 March 2021 and the six months ended 30September 2021 amounted to HK$11.7 million, HK$9.5 million, HK$6.4 million and HK$4.6 million,respectively. Our effective tax rate was 16.3%, 16.0%, 23.9% and 22.8% for the same periods,


– 195 –


respectively. Our effective tax rate increased from 16.0% in FY2020 to 23.9% for the year ended 31

March 2021 mainly due to non-deductible [REDACTED] expenses, partly offset by non-taxable profits

(employment support scheme) of HK$4.3 million for income tax purposes. Our effective tax rate further

decreased to 22.8% for the six months ended 30 September 2021 mainly due to a reduction of non-

deductible [REDACTED] expenses.

For details of our income tax expense, see Note 9 to our consolidated financial statements set out

in the Accountant’s Report included in Appendix I to this document.

Profit for the year/period

Our net profit for the years ended 31 March 2019, 2020 and 2021 and the six months ended 30

September 2021 was HK$60.0 million, HK$49.7 million, HK$20.4 million and HK$15.7 million,

respectively.

Our net profit for the years ended 31 March 2020 and 2021 and the six months ended 30

September 2021 include net losses attributed to non-controlling interests of HK$0.5 million and HK$1.3

million (for FY2020 and FY2021, respectively) and net profit attributable to non-controlling interests of

HK$0.4 million (for the six months ended 30 September 2021). These net losses relate to minority

interests held under our subsidiary, HKID Limited, which operates our Hong Kong Imaging business;

and which generated net losses during those periods mainly due to a slow down in business as a result

of the COVID-19 outbreak.

RESULTS OF OPERATION OF OUR GROUP

Comparison of the six months ended 30 September 2021 to the six months ended 30 September2020

Revenue

Our revenue increased by HK$44.7 million, or 36.9%, from HK$121.3 million for the six months

ended 30 September 2020 to HK$166.0 million for the six months ended 30 September 2021. The

increase in our revenue was primarily due to the addition of three new Employee Doctors coupled with

an increase in patient visits due to the recovery from the COVID-19 pandemic, and revenue generated

from COVID-19 vaccination services at the Kowloon Bay CVC Centre.


Our revenue generated from the provision of services by specialists increased by HK$21.4 million,

or 20.1%, from HK$106.4 million for the six months ended 30 September 2020 to HK$127.8 million for

the six months ended 30 September 2021, which was primarily due to an increase in patient visits/

admissions and higher average revenue per patient visit/admission. Patient visits/admissions increased

from 15,966 visits/admissions for the six months ended 30 September 2020 to 18,370 visits/admissions

for the six months ended 30 September 2021 primarily driven by the greater demand for medical

services upon recovery from the COVID-19 pandemic and our newly joined doctors. Average revenue

per patient visit/admission increased slightly from HK$4,270 for the six months ended 30 September

2020 to HK$4,363 for the six months ended 30 September 2021 mainly because Dr. Stanley Yu joined

us as a specialist doctor in August 2020.


– 196 –



Our revenue generated from our allied health services increased from HK$16.2 million for the six

months ended 30 September 2020 to HK$42.1 million for the six months ended 30 September 2021,

which was primarily due to increased demand for imaging and diagnostic services at our imaging and

laboratory centres and COVID-19 vaccination services at the Kowloon Bay CVC Centre.


Our revenue generated from the provision of medical management services to the HKMC

Ophthalmologists remained stable as HK$2.3 million for the six months ended 30 September 2020 and

2021.

Cost of sales

Our cost of sales increased by HK$39.3 million, or 45.3%, from HK$86.7 million for the six

months ended 30 September 2020 to HK$126.0 million for the six months ended 30 September 2021,

which was primarily driven by (i) an increase of HK$10.9 million in other expenses relating to service

fees to assistants at the Kowloon Bay CVC Centre and an increase in building and management fee and

rates due to the newly leased Integrated Flagship Medical Centre; (ii) an increase of HK$9.5 million in

service fees to specialist doctors, in particular, for our cardiologists as there was an increasing number

of patients seeking for medical check-ups prior to the injection of COVID-19 vaccines; and (iii) an

increase of HK$5.3 million in depreciation of right-of-use assets for the Integrated Flagship Medical

Centre since we have entered into a new lease for six years in February 2021.

Gross profit

Our gross profit increased by HK$5.5 million, or 15.8%, from HK$34.5 million for the six months

ended 30 September 2020 to HK$40.0 million for the six months ended 30 September 2021 primarily

due to (i) higher revenue from specialist medical services, in particular, inpatient services as a result of

recovery from the COVID-19 pandemic; and (ii) higher revenue from COVID-19 vaccination services.

Our gross profit margin decreased from 28.5% for the six months ended 30 September 2020 to 24.1%

for the six months ended 30 September 2021 mainly due to (i) higher service fees incurred for the

provision of COVID-19 vaccination services and increased service fees to our cardiologists; and (ii)

higher cost incurred for our newly leased Integrated Flagship Medical Centre.

Selling and marketing expenses

Selling and marketing expenses decreased by HK$0.7 million, or 47.9%, from HK$1.4 million for

the six months ended 30 September 2020 to HK$0.7 million for the six months ended 30 September

2021 mainly due to less marketing expenses spent on medical concierge services.

Administrative expenses

Our administrative expenses decreased by HK$1.2 million, or 7.0%, from HK$16.5 million for the

six months ended 30 September 2020 to HK$15.3 million for the six months ended 30 September 2021.

As a percentage of revenue, administrative expenses decreased from 13.6% for the six months ended 30

September 2020 to 9.2% for the six months ended 30 September 2021. The decrease in our

administrative expenses was mainly due to a decrease of HK$2.9 million in [REDACTED] expenses as

most of the [REDACTED] expenses were incurred in FY2021, partially offset by an increase of HK$1.2

million in other expenses for our establishment of Integrated Flagship Medical Centre.


– 196.1 –


Finance (costs)/income, net

We recorded net finance income of HK$0.5 million for the six months ended 30 September 2020

and net finance costs of HK$2.8 million for the six months ended 30 September 2021. The change was

mainly due to (i) a decrease of HK$0.8 million in interest income on bank deposits as we have utilized

more cash for and had less cash deposits in banks; and (ii) an increase of HK$1.6 million in interest

expense on lease liabilities as we have entered into a new lease for the Integrated Flagship Medical

Centre.

Income tax expenses

Our income tax expenses increased by HK$0.9 million, or 25.6%, from HK$3.7 million for the six

months ended 30 September 2020 to HK$4.6 million for the six months ended 30 September 2021

mainly because our operating profit increased from HK$16.6 million for the six months ended 30

September 2020 to HK$23.0 million for the six months ended 30 September 2021. Our effective tax rate

increased slightly from 21.7% for the six months ended 30 September 2020 to 22.8% for the six months

ended 30 September 2021.

Profit for the period

As a result of the foregoing, our profit for the period increased by HK$2.4 million, or 17.9%, from

HK$13.3 million for the six months ended 30 September 2020 to HK$15.7 million for the six months

ended 30 September 2021. Our net profit margin was 11.0% for the six months ended 30 September

2020 as compared to 9.4% for the six months ended 30 September 2021, the decrease was mainly due to

higher cost incurred for our provision of COVID-19 vaccination services and establishment of the

Integrated Flagship Medical Centre.

Comparison of the Year Ended 31 March 2021 to the Year Ended 31 March 2020

Revenue

Our revenue increased by HK$3.0 million, or 1.2%, from HK$248.4 million for the year ended 31

March 2020 to HK$251.4 million for the year ended 31 March 2021. The increase in our revenue was

primarily due to the increase in revenue generated from allied health services, partly offset by a decrease

in revenue from specialist medical services.


Our revenue generated from the provision of services by specialists decreased by HK$14.4 million,

or 6.2%, from HK$232.4 million for the year ended 31 March 2020 to HK$218.0 million for the year

ended 31 March 2021, which was primarily due to a slight decrease in patient visits/admissions and

lower average revenue per patient visit/admission. Patient visits/admissions decreased from 41,061

visits/admissions for the year ended 31 March 2020 to 40,646 visits/admissions for the year ended 31

March 2021 primarily driven by the lower number of hospital admissions for Dr. Kenneth Tsang

(respiratory medicine), Dr. Adam Leung (cardiology), Dr. Jason Fong (neurology) and Dr. Clement Lee

(cardiology) because of the COVID-19 outbreak along with the related delays in seeking non-urgent

medical treatment by patients; partly offset by increased patient visits/admission because Dr. Eddie

Cheung (paediatrics) joined us in August 2019 and Dr. Stanley Yu (oncology) joined us in August 2020.

Average revenue per patient visit/admission decreased from HK$5,661 for the year ended 31 March

2020 to HK$5,364 for the year ended 31 March 2021 mainly because (i) Dr. Eddie Cheung’s average


– 196.2 –


revenue per patient is substantially lower than other specialist doctors and (ii) change in service mix,

with a lower proportion of inpatient hospital admissions which generally have a higher revenue per

admission.


Our revenue generated from our allied health services increased from HK$13.1 million for the year

ended 31 March 2020 to HK$36.5 million for the year ended 31 March 2021, which was primarily due

to the acquisition of Hong Kong Imaging in October 2019, which contributed HK$32.5 million to our


– 196.3 –


revenues for the year ended 31 March 2021. Excluding Hong Kong Imaging, revenue from allied health

services increased by HK$3.7 million mainly due to an increase in revenue in clinical psychology and

psychology counselling services as well as from COVID-19 vaccination services provided at the

Kowloon Bay CVC Centre.


Our revenue generated from the provision medical management services to the HKMC

Ophthalmologists for the year ended 31 March 2021 was HK$4.5 million which remained stable as

compared to the year ended 31 March 2020.

Cost of sales

Our cost of sales increased by HK$12.7 million, or 7.3%, from HK$172.8 million for the year

ended 31 March 2020 to HK$185.5 million for the year ended 31 March 2021, which was primarily

driven by (i) an increase in employee benefit expenses of HK$4.1 million due to an increase in number

of staff, (ii) an increase in depreciation of equipment and right-of-use assets of HK$5.0 million as a

result of the acquisition of Hong Kong Imaging and our new lease of the Integrated Flagship Medical

Centre, and (iii) an increase in radiologist reporting fee of HK$4.8 million as a result of increased

diagnostic services provided to third-parties by Hong Kong Imaging.

Gross profit

Our gross profit decreased by HK$9.7 million, or 12.8%, from HK$75.6 million for the year ended

31 March 2020 to HK$65.9 million for the year ended 31 March 2021 primarily due to (i) lower

revenue from specialist medical services as a result of COVID-19 outbreak as discussed above and (ii)

increased cost of sales, including employee benefit expenses, depreciation and radiologist reporting fees

for the reasons discussed above. Our gross profit margin decreased from 30.4% for the year ended 31

March 2020 to 26.2% for the year ended 31 March 2021 mainly due to lower revenue from specialist

medical services while we incurred greater fixed costs such as employment benefit expenses and

depreciation expenses as a percentage of revenue.


Selling and marketing expenses increased by HK$1.1 million, or 92.1%, from HK$1.2 million for

the year ended 31 March 2020 to HK$2.3 million for the year ended 31 March 2021 mainly due to the

production of corporate videos and increased marketing activities.


Our administrative expenses increased by HK$20.0 million, or 121.5% from HK$16.4 million for

the year ended 31 March 2020 to HK$36.4 million for the year ended 31 March 2021. As a percentage

of revenue, administrative expenses increased from 6.6% for the year ended 31 March 2020 to 14.5%

for the year ended 31 March 2021. The increase in our administrative expenses was mainly due to (i) an

increase in [REDACTED] expenses of HK$14.3 million, (ii) an increase in other expenses by HK$2.9

million mainly relating to the repair and maintenance expenses associated with Hong Kong Imaging and

(iii) an increase in share-based payment expenses of HK$2.4 million.


– 197 –



We recorded net finance income of HK$1.4 million for the year ended 31 March 2020 and net

finance costs of HK$0.2 million for the year ended 31 March 2021. The change was mainly due to an

increase in interest expense from lease liabilities and a decrease in interest income from bank deposits.

Income tax expenses

Our income tax expenses decreased by HK$3.0 million, or 32.6%, from HK$9.5 million for the

year ended 31 March 2020 to HK$6.4 million for the year ended 31 March 2021 mainly because our

operating profit decreased from HK$57.8 million for the year ended 31 March 2020 to HK$27.0 million

for the year ended 31 March 2021. Our effective tax rate increased from 16.0% for the year ended 31

March 2020 to 23.9% for the year ended 31 March 2021 mainly because [REDACTED] expenses were

not deductible, partly offset by non-taxable profits (employment support scheme) for income tax

purposes.

Profit for the year

As a result of the foregoing, our profit for the year decreased by HK$29.4 million, or 59.2%, from

HK$49.7 million for the year ended 31 March 2020 to HK$20.3 million for the year ended 31 March

2021. Our net profit margin was 20.0% for the year ended 31 March 2020 as compared to 8.1% for the

year ended 31 March 2021, the decrease was mainly due to a lower gross profit margin due to the

COVID-19 outbreak and higher administrative expenses, including [REDACTED] expenses, as discussed

above.

Comparison of the Year Ended 31 March 2020 to the Year Ended 31 March 2019

Revenue

Our revenue increased by HK$52.7 million, or 27.0%, from HK$195.7 million for the year ended

31 March 2019 to HK$248.4 million for the year ended 31 March 2020. The increase in our revenue

was primarily due to an increase in revenue generated from the specialist medical services and allied

health services.


Our revenue generated from the provision of services by specialists increased by HK$40.2 million,

or 20.9%, from HK$192.3 million for the year ended 31 March 2019 to HK$232.4 million for the year

ended 31 March 2020, which was primarily due to an increase in patient visits/admissions from 33,982

visits/admissions in FY2019 compared to 41,061 visits/admissions in FY2020. The increase in patient

visits/admissions was primarily driven by the full-year service contribution from the five Equity Partner

Doctors in FY2020 that joined as specialist doctors at various dates during FY2019; coupled with the

fact that Dr. Eddie Cheung joined us as a doctor in August 2019. In particular, Dr. Matthew Ng and Dr.

Lo Wai Kei joined us as a doctor in April 2018, Dr. Clement Lee joined us as a doctor in May 2018,

Dr. Boron Cheng joined us as a doctor in July 2018, and Dr. Ada Ma joined us as a doctor in October

2018. The COVID-19 outbreak had some impact on the number of patient visits/admissions starting in

February 2020 but did not have a significant impact on our results for the year. Average revenue per

patient visit/admission increased slightly from HK$5,658 in FY2019 to HK$5,661 in FY2020.


– 198 –



Our revenue generated from our allied health services increased from HK$12,000 for the year

ended 31 March 2019 to HK$13.1 million for the year ended 31 March 2020, which was primarily due

to the acquisition of Hong Kong Imaging in October 2019, which contributed HK$12.8 million to our

revenue in FY2020. Excluding Hong Kong Imaging, revenue from allied health services increased by

HK$0.3 million mainly due to revenue generated by our clinical psychologist.


Our revenue generated from the provision of medical management services increased by HK$1.2

million, or 36.2%, from HK$3.4 million for the year ended 31 March 2019 to HK$4.6 million for the

year ended 31 March 2020 as we provided a full year of services to the HKMC Ophthalmologists in

FY2020, while only provided nine months of such services in FY2019.

Cost of sales

Our cost of sales increased by HK$61.7 million, or 55.5%, from HK$111.1 million for the year

ended 31 March 2019 to HK$172.8 million for the year ended 31 March 2020, which was primarily

driven by (i) an increase in service fees paid to our specialist doctors of HK$24.3 million, (ii) an

increase in cost of pharmaceuticals and medical consumables of HK$15.7 million, (iii) an increase in

employee benefit expenses of HK$9.9 million due to an increase in number of staff, and (iv) an increase

in depreciation of equipment and right-of-use assets as a result of the acquisition of Hong Kong

Imaging. The increases in service fees paid to specialist doctors and increase in cost of pharmaceuticals

and medical consumables were mainly attributable to the additional costs associated with the generation

of additional revenue as a result of the full year contribution of services by the five Equity Partner

Doctors that joined us as specialist doctors at various times in FY2019 coupled by the addition of Dr.

Eddie Cheung in FY2020, as discussed above.

Gross profit

Our gross profit decreased by HK$8.9 million, or 10.6%, from HK$84.5 million for the year ended

31 March 2019 to HK$75.6 million for the year ended 31 March 2020 primarily due to increased service

fees provided to our specialist doctors for the reasons discussed above. Our gross profit margin

decreased from 43.2% in FY2019 to 30.4% in FY2020 mainly due to (i) the addition of the five Equity

Partner Doctors starting in FY2019 resulting in greater service fees paid to them; and (ii) the Committed

Fee Contributions effectively limit the profit we derive from their services. Please see the section headed

‘‘Business — Our Professional Team — Compensation Arrangements with Specialist Doctors and Panel

Specialists’’ for further details on the Committed Fee Contributions.


Selling and marketing expenses increased by HK$0.3 million, or 32.7%, from HK$0.9 million for

the year ended 31 March 2019 to HK$1.2 million for the year ended 31 March 2020 mainly due to

additional costs associated with updating our website and the media publication and grand opening of

HKMC Paediatric Centre.


Our administrative expenses increased by HK$9.7 million, or 143.4%, from HK$6.7 million for the

year ended 31 March 2019 to HK$16.4 million for the year ended 31 March 2020. As a percentage of


– 199 –


revenue, administrative expenses increased from 3.4% in FY2019 to 6.6% in FY2020. The increase in

our administrative expenses was mainly due to (i) an increase in employee benefit expenses of HK$2.5

million as a result of the addition of corporate staff to support our business, (ii) an increase in

depreciation of right-of-use assets of HK$2.6 million as we rented our new corporate offices in Central,

and (iii) an increase in other expenses of HK$2.5 million mainly relating to the repair and maintenance

expenses associated with Hong Kong Imaging and share based payment expenses.

Provision for impairment losses on financial assets

We recorded a provision of HK$150,000 against our trade receivables in FY2020 to reflect

increase in amounts over-due. In particular, HK$96,000 was overdue for more than a year from a

hospital because a certain patient failed to pay his medical expenses to the hospital. The remaining

HK$54,000 in provisions were for other potential losses calculated under HKFRS 9.


We recorded net finance income of HK$1.4 million for the year ended 31 March 2020 as a result

of interest income from bank deposits. We recorded net finance costs of HK$0.6 million for the year

ended 31 March 2019 mainly due to interest expense on lease liabilities.

Income tax expenses

Our income tax expenses decreased by HK$2.2 million, or 18.6%, from HK$11.7 million for the

year ended 31 March 2019 to HK$9.5 million for the year ended 31 March 2020 mainly because our

operating profit decreased from HK$72.2 million in FY2019 to HK$57.8 million in FY2020. Our

effective tax rate remained stable and was 16.3% in FY2019 and 16.0% in FY2020.

Profit for the year

As a result of the foregoing, our profit for the year decreased by HK$10.3 million, or 17.1%, from

HK$60.0 million for the year ended 31 March 2019 to HK$49.7 million for the year ended 31 March

2020. Our net profit margin was 30.6% for FY2019 as compared to 20.0% for FY2020, the decrease was

mainly due to a lower gross profit margin and higher administrative expenses as discussed above.

LIQUIDITY AND CAPITAL RESOURCES

We have historically funded our liquidity and capital requirements primarily through a combination

of capital contributions from our shareholders and internally generated funds from our operating

activities. As at 31 March 2019, 2020 and 2021 and 30 September 2021, we had cash and cash

equivalents of HK$39.8 million, HK$160.0 million, HK$95.3 million and HK$112.6 million,

respectively.

We mainly use cash to fund our operations, including for the payment of service fees, wages and

salaries, and lease payments for our Medical Centres and Diagnostic Centres. We also use cash for

purchases of property, plant and equipment, providing advances to Directors and shareholders and

making dividend payments. Going forward, we expect to fund our working capital requirements from a

combination of various sources, including but not limited to cash generated from our operations, the

[REDACTED] from the [REDACTED] as well as other financing activities as and when appropriate.


– 200 –


The following table sets out selected cash flow data from the consolidated statements of cash flowsfor the Track Record Period:

Year ended 31 March

Six monthsended

30 September20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

Operating cash flow before changes in working capital 87,889 79,296 55,722 43,183Changes in working capital (8,735) 10,385 (29) 8,489Income taxes paid (8,260) (15,343) (11,589) (2,438)

Net cash generated from operating activities 70,894 74,338 44,104 49,234

Net cash used in investing activities (34,507) (62,115) (177,753) (25,305)Net cash (used in)/generated from financing activities (10,722) 107,866 69,056 (6,551)

Net increase/(decrease) in cash and cash equivalents 25,665 120,089 (64,593) 17,378Cash and cash equivalents at beginning of the period 14,106 39,771 159,860 95,267

Cash and cash equivalents at end ofthe period 39,771 159,860 95,267 112,645

Cash Flows from Operating Activities

Our cash inflow from operating activities is principally derived from the receipts from theprovision of specialist medical services and allied health services. Our cash outflow from operatingactivities comprised mainly fees paid to medical practitioners, wages, salaries and allowances paid toour employees and procurement of pharmaceuticals supplies and laboratory and imaging services.During the Track Record Period, our net cash generated from operating activities represented profitbefore income tax for the year/period adjusted for (i) non-cash items such as depreciation and share-based payments, (ii) net finance income or costs, (iii) effect of changes in working capital and (iv)income tax paid.

For the six months ended 30 September 2021, we had net cash generated from operating activitiesof HK$49.2 million, which consists of cash generated from operations of HK$51.6 million less incometax payment of HK$2.4 million. Cash generated from operations included (i) operating cash flow beforechanges in working capital of HK$43.2 million which primarily consisted of profit before income tax ofHK$20.3 million, adjusted for certain non-cash expenses, which mainly included depreciation of right-of-use assets of HK$13.4 million and depreciation of property, plant and equipment of HK$4.0 millionand (ii) changes in certain working capital items that positively affected operating cash flow by HK$8.5million during the year, including (a) a decrease in other receivables, deposits and prepayments ofHK$7.9 million due to decrease of prepaid property, plant and equipment, (b) an increase in accrualsand other payables of HK$2.2 million and (c) a decrease in inventories of HK$1.5 million; partiallyoffset by a decrease in contract liabilities of HK$2.6 million since we have already provided thecontracted COVID-19 vaccination services.

For the year ended 31 March 2021, we had net cash generated from operating activities ofHK$44.1 million, which consisted of cash generated from operations of HK$55.7 million less incometax payment of HK$11.6 million. Cash generated from operations included (i) operating cash flowbefore changes in working capital of HK$55.7 million which primarily consisted of profit before incometax of HK$26.8 million, adjusted for certain non-cash expenses, which mainly included depreciation ofright-of-use assets of HK$19.1 million and depreciation of property, plant and equipment of HK$6.4million and (ii) changes in certain working capital items that negatively affected operating cash flow byHK$29,000 during the year, including (a) an increase in trade receivables of HK$3.2 million mainly duefrom hospitals, (b) an increase in inventories of HK$2.2 million, and (c) an increase in other receivables,


– 201 –


deposits and prepayments of HK$1.2 million due to deposits for new lease of the Integrated FlagshipMedical Centre; partly offset by (a) an increase in accruals and other payables of HK$4.3 million due toadditional [REDACTED] expenses payable and (b) an increase in contract liabilities of HK$2.5 milliondue to our agreement to provide COVID-19 vaccination services at the Kowloon Bay CVC Centre withthe Hong Kong government.


– 201.1 –


For the year ended 31 March 2020, we had net cash generated from operating activities ofHK$74.3 million, which consisted of cash generated from operations of HK$89.7 million less incometax payment of HK$15.3 million. Cash generated from operations included (i) operating cash flowbefore changes in working capital of HK$79.3 million which primarily consisted of profit before incometax of HK$59.2 million, adjusted for certain non-cash expenses, which mainly included depreciation ofright-of-use assets of HK$14.7 million and depreciation of property, plant and equipment of HK$6.1million, and (ii) changes in certain working capital items that positively affected operating cash flow byHK$10.4 million during the year, including (a) an increase in accruals and other payables of HK$10.0million due to increase in amounts due to consultants which are service fees for Equity Partner Doctorsand (b) a decrease in trade receivables of HK$3.9 million due to settlement from customers; partly offsetby (a) an increase in other receivables, deposits and prepayments of HK$2.2 million, and (b) an increasein inventories of HK$1.8 million as a result of increased demand for pharmaceuticals for our increase innumber of specialist doctors.

For the year ended 31 March 2019, we had net cash generated from operating activities ofHK$70.9 million, which consisted of cash generated from operations of HK$79.2 million less incometax payment of HK$8.3 million. Cash generated from operations included (i) operating cash flow beforechanges in working capital of HK$87.9 million which primarily consisted of profit before income tax ofHK$71.6 million, adjusted for certain non-cash expenses, which mainly included depreciation of right-of-use assets of HK$8.2 million and depreciation of property, plant and equipment of HK$2.9 million,and (ii) changes in certain working capital items that negatively affected operating cash flow by HK$8.7million, which mainly included (a) an increase trade receivables of HK$12.7 million due to increase inthe amounts due from hospital patients as a result of increased revenues from the five Equity PartnerDoctors that joined the Group in FY2019 and (b) an increase in inventories of HK$4.4 million due tothe anticipated increase in demand for pharmaceutical products as a result of the joining of the fiveEquity Partner Doctors; partly offset by (a) an increase in accruals and other payables of HK$7.3 milliondue to the increase in service fees due to Equity Partner Doctors, and (b) an increase in trade payablesof HK$1.3 million due to the increase in purchase of drugs and laboratory test cost.

Cash Flows used in Investing Activities

Our cash inflow from investing activities primarily consists of interest received. Our cash outflowfrom investing activities primarily consists of advances made to our Directors and shareholders,purchase of property, plant and equipment and leasehold land for use in our Medical Centres andDiagnostic Centres, acquisition of a subsidiary, and prepayments for leasehold improvements for ouroffices.

For the six months ended 30 September 2021, we had net cash used in investing activities ofHK$25.3 million, which primarily consisted of (i) purchase of property, plant and equipment ofHK$21.9 million relating to establishment of Integrated Flagship Medical Centre; (ii) payment ofHK$1.7 million for reinstatement costs relating to leasehold improvements of our previous medicalcentres; and (iii) an increase in amounts due to shareholders of HK$1.1 million.

For the year ended 31 March 2021, we had net cash used in investing activities of HK$177.8million, which primarily consisted of (i) purchases of property, plant and equipment of HK$30.6 millionand purchase of leasehold land of HK$134.4 million relating to the acquisition of the IntegratedDiagnostic Centre, (ii) prepayment of leasehold improvements of HK$8.3 million relating to the newlease of the Integrated Flagship Medical Centre, and (iii) increases in amounts due from our Directors ofHK$10.5 million, partially offset by decreases to amounts due from shareholders of HK$5.2 million as aresult of dividend payments to them.

For the year ended 31 March 2020, we had net cash used in investing activities of HK$62.1million, which primarily consisted of (i) advances made to our Directors of HK$24.4 million andadvances made to shareholders of HK$24.0 million, both in anticipation of future dividends to be


– 202 –


declared to them, (ii) net cash used for the acquisition of Hong Kong Imaging of HK$9.3 million, and(iii) the purchase of equipment of HK$6.8 million, partially offset by interest received of HK$2.4million.

For the year ended 31 March 2019, we had net cash used in investing activities of HK$34.5

million, which primarily reflects (i) advances made to our Directors of HK$17.7 million and advances

made to shareholders of HK$10.8 million, both in anticipation of future dividends to be declared to

them, and (ii) the purchase of equipment of HK$6.0 million for our Medical Centres.

Cash Flows used in/from Financing Activities

Our cash inflow from financing activities primarily consists of proceeds from issuance of shares to

our Pre-[REDACTED] Investors and bank borrowings. Our cash outflow from financing activities

mainly consists of principal and interest payments of lease liabilities and repayments to a Director and

shareholders.

For the six months ended 30 September 2021, we had net cash used in financing activities of

HK$6.6 million, which primarily consists of (i) principal and interest payments of lease liabilities of

HK$9.1 million; and (ii) repayment of bank borrowings of HK$1.6 million; partially offset by (i)

proceeds from bank borrowings of HK$5.0 million relating to a revolving loan obtained for operational

use; and (ii) refund of rental deposits of HK$0.2 million upon expiration of the lease.

For the year ended 31 March 2021, we had net cash generated from financing activities of

HK$69.1 million, which primarily consisted of (i) proceeds from bank borrowing is of HK$75.0 million

relating to the mortgage for the acquisition of the Integrated Diagnostic Centre, (ii) proceeds of

HK$[REDACTED] from issuance of shares to Pre-[REDACTED] Investors, partially offset by (i) cash

dividends paid of HK$39.5 million and (ii) principal and interest payments of lease liabilities of

HK$16.9 million.

For the year ended 31 March 2020, we had net cash generated from financing activities of

HK$107.9 million, which primarily consisted of proceeds of HK$[REDACTED] from issuance of shares

to our Pre-[REDACTED] Investors, partially offset by the principal and interest payments of lease

liabilities of HK$15.4 million.

For the year ended 31 March 2019, we had net cash used in financing activities of HK$10.7

million, which primarily consisted of (i) the principal and interest payments of lease liabilities of

HK$8.5 million, and (ii) repayments to shareholders of HK$3.8 million, partially offset by proceeds of

HK$1.7 million from issuance of shares to the Equity Partner Doctors.


– 203 –


NET CURRENT ASSETS

The following table sets out the breakdown of our current assets and current liabilities as at the

dates indicated:

As at 31 MarchAs at

30 September2021

As at31 October

20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(unaudited)

Current assetsInventories 7,935 10,112 12,351 10,860 11,995Trade receivables 16,099 16,107 19,108 19,693 18,755Other receivables, deposits and prepayments 847 5,852 10,347 12,238 12,197

Amounts due from shareholders 137,143 36,116 4,145 5,199 4,954Amounts due from Directors 27,130 51,535 1,600 2,361 2,440Amount due from ultimate holding company 20 36 4 5 22Amount due from immediate holding

company 10 18 — — —

Income tax recoverable — 336 849 128 128Cash and cash equivalents 39,771 159,860 95,267 112,645 110,460

Total current assets 228,955 279,972 143,671 163,129 160,951

Current liabilitiesTrade payables 5,444 6,307 6,111 6,148 6,292Contract liabilities 411 431 2,947 375 373Accruals and other payables 8,081 19,262 25,077 29,757 24,790Lease liabilities 7,349 15,327 17,551 19,290 18,837Provision of reinstatement costs for

leasehold improvements — — 2,101 1,007 1,009Amount due to a shareholder 279 — — — —

Amount due to a related company 100 — — — —

Dividend payable — 66,720 — — —

Bank borrowing — — 75,000 8,199 8,203Current income tax payable 8,304 3,943 496 1,311 2,133

Total current liabilities 29,968 111,990 129,283 66,087 61,637

Net current assets 198,987 167,982 14,388 97,042 99,314

Our net current assets increased from HK$14.4 million as at 31 March 2021 to HK$97.0 million as

at 30 September 2021 primarily due to an increase in current assets of HK$19.5 million and a decrease

in current liabilities of HK$63.2 million. The increase in current assets of HK$19.5 million was mainly

driven by an increase of HK$17.4 million in cash and cash equivalents due to cash generated from

operations. The decrease in current liabilities of HK$63.2 million was mainly driven by a decrease of

HK$66.8 million in bank borrowings since part of the mortgage loan was reclassified to non-current

liabilities, partially offset by an increase of HK$4.7 million in accruals and other payables due to

increase in consultancy fees to be paid to our Equity Partner Doctors.


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Our net current assets decreased from HK$168.0 million as at 31 March 2020 to HK$14.4 million

as at 31 March 2021 primarily due to a decrease in current assets of HK$136.3 million and an increase

in current liabilities of HK$17.3 million. The decrease in current assets of HK$136.3 million was driven

by decreases in amounts due from shareholders and Directors mainly as a result of dividend payments to


– 204.1 –


them and cash used for the acquisition of the Integrated Diagnostic Centre. Current liabilities increased

by HK$17.3 million primarily due to increased bank borrowings of HK$75.0 million partly offset by a

decrease in dividend payables of HK$66.7 million as a result of dividend payments.

Our net current assets decreased by HK$31.0 million from HK$199.0 million as at 31 March 2019

to HK$168.0 million as at 31 March 2020 primarily due to an increase in current liabilities of HK$82.0

million, partly offset by an increase in current assets of HK$51.0 million. The increase in current

liabilities was primarily driven by (i) an increase in dividends payable of HK$66.7 million due to

dividends declared in February 2020 that was not settled until April 2020, (ii) an increase in accruals

and other payables mainly due to an increase in amounts due to consultants of HK$9.9 million reflecting

higher service fees to Equity Partner Doctors as they generated more revenue, and (iii) an increase in

lease liabilities of HK$8.0 million due to additional leases for office space. The increase in current

assets was primarily driven by (i) an increase in cash and cash equivalents of HK$120.1 million due to

increased cash generated from operations as well as payment received for issuance of shares to our Pre-

[REDACTED] Investors, and (ii) an increase in amounts due from Directors of HK$24.4 million as a

result of advances made to them in anticipation of future dividends to be declared to them; partly offset

by a decrease in amounts due from shareholders of HK$101.0 million due to the payment from the Pre-

[REDACTED] Investors.

WORKING CAPITAL

Our Directors confirm that, taking into consideration the financial resources presently available to

us, including our existing cash and cash equivalents, net cash flow generated from operating activities,

and [REDACTED] from the [REDACTED], we have sufficient working capital for our present working

capital requirements for at least the next 12 months commencing on the date of this document.

DESCRIPTION OF SELECTED CONSOLIDATED STATEMENT OF FINANCIAL POSITIONITEMS

Property, Plant and Equipment

Our property, plant and equipment consists of building, medical equipment, leasehold

improvements, office furniture and fixtures and computer equipment. We had property, plant and

equipment of HK$7.7 million, HK$11.6 million, HK$36.1 million and HK$55.5 million as at 31 March

2019, 2020 and 2021 and 30 September 2021, respectively.

The following table sets out the breakdown of our property, plant and equipment as at the dates

indicated:

As at 31 March As at30 September

20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

Building — — 28,766 28,286

Medical equipment 1,057 1,833 2,101 4,828

Leasehold improvements 5,794 7,650 3,340 19,510

Office furniture and fixtures 176 954 612 1,009

Computer equipment 627 1,134 1,238 1,895

7,654 11,571 36,057 55,528


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Our property, plant and equipment increased by HK$3.9 million, or 51.2%, from HK$7.7 millionas at 31 March 2019 to HK$11.6 million as at 31 March 2020 primarily due to the addition of officefurniture, computer equipment and leasehold improvements due to the opening of HKMC PaediatricCentre and corporate office and the acquisition of Hong Kong Imaging.

Our property, plant and equipment increased by HK$24.5 million, from HK$11.6 million as at 31March 2020 to HK$36.1 million as at 31 March 2021 primarily due to the acquisition of the IntegratedDiagnostic Centre partly offset by deprecation of leasehold improvements.

Our property, plant and equipment increased by HK$19.5 million, from HK$36.1 million as at 31March 2021 to HK$55.5 million as at 30 September 2021 primarily due to the addition of leaseholdimprovements due to the establishment of the Integrated Flagship Medical Centre.

For details of our property, plant and equipment, see Note 11 to our consolidated financialstatements set out in the Accountant’s Report included in Appendix I to this document.

Right-of-use Assets

Our right-of-use assets consist mainly of leasehold land, leases for our corporate office, MedicalCentres, and Diagnostic Centres. We had right-of-use assets of HK$16.9 million, HK$23.2 million,HK$225.8 million and HK$214.4 million as at 31 March 2019, 2020 and 2021 and 30 September 2021,respectively.

Our right-of-use assets increased by HK$6.3 million, or 37.2%, from HK$16.9 million as at 31March 2019 to HK$23.2 million as at 31 March 2020, primarily due to additional leases of propertiesincluding our corporate office, HKMC Paediatric Centre and HKMC III as well as right-of-use assetsacquired as part of the purchase of Hong Kong Imaging in October 2019; partly offset by depreciationof right-of-use assets of HK$14.6 million in FY2020.

Our right-of-use assets increased by HK$202.6 million, from HK$23.2 million as at 31 March2020 to HK$225.8 million as at 31 March 2021, primarily due to an increase in leasehold land ofHK$135.6 million from the acquisition of the Integrated Diagnostic Centre, and new lease of theIntegrated Flagship Medical Centre, partly offset by depreciation.

Our right-of-use assets decreased by HK$11.5 million, from HK$225.8 million as at 31 March2021 to HK$214.4 million as at 30 September 2021, primarily due to an increase in depreciation ofright-of-use assets as we have entered into a new lease for our Integrated Flagship Medical Centre,partially offset by an addition of new lease in relation to a copier.

For details of our right-of-use assets, see Note 12 to our consolidated financial statements set outin the Accountant’s Report included in Appendix I to this document.

Goodwill

Our goodwill was attributable to the acquisition of Hong Kong Imaging in October 2019. We hadgoodwill of nil, HK$17.7 million, HK$17.7 million and HK$17.7 million as at 31 March 2019, 2020and 2021 and 30 September 2021, respectively.

Goodwill is not amortised but it is tested for impairment annually, or more frequently if events orchanges in circumstances indicate that it might be impaired. Based on the results of the impairmenttesting of goodwill, in the opinion of our Directors, no impairment is considered necessary for ourgoodwill as at 30 September 2021. Details of the impairment assessment performed by our Directors areas follows:

Impairment assessment of goodwill

Goodwill arising from business combination during the year ended 31 March 2020 is allocated to agroup of cash generating units (‘‘CGU’’) consisting of HKID Limited and its subsidiaries (also referredto as ‘‘Imaging and Diagnostic CGU’’), and is monitored by management at the Imaging andDiagnostic CGU level for impairment testing. Impairment testing of goodwill is performed at eachperiod end date, or whenever there is impairment indicator.


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The recoverable amount of the Imaging and Diagnostic CGU is determined by reference to thevalue-in-use calculation performed by an independent valuer, Vincorn Consulting and Appraisal Limited.

In assessing the value-in-use calculation, references were made to the calculations using pre-taxcash flow projections based on financial plans approved by management covering a forecast period offive years. Cash flows beyond the forecast period are extrapolated using the estimated terminal growthrates. Management assessed that no impairment provision is required as at 31 March 2020, 31 March2021 and 30 September 2021. The key assumptions used for the cash flow projections (which are basedon past experience of the Group and external sources of market information) and the sensitivity analysisare disclosed as follows:

Key assumptions As at 31 March 2020

Revenue growth rates (year on year)— Year ending 31 March 2021 –15.7%— Years ending 31 March 2022 to 2025 3.5% to 24.6%

Gross margin ratio— Year ending 31 March 2021 3.1%— Years ending 31 March 2022 to 2025 26.2% to 29.2%— Terminal year 23.4%

Pre-tax discount rate 18.6%

Terminal growth rate 3.5%

Key assumptions As at 31 March 2021

Revenue growth rates (year on year)— Year ending 31 March 2022 17.1%— Years ending 31 March 2023 to 2026 3.5% to 10.4%




Key assumptions As at 30 September 2021

Revenue growth rates (year on year)— Year ending 30 September 2022 15.6%— Years ending 30 September 2023 to 2026 3.5% to 9.3%

Gross margin ratio— Year ending 30 September 2022 14.3%— Years ending 30 September 2023 to 2026 27.5% to 27.7%— Terminal year 27.7%



The recoverable amount of the Imaging and Diagnostic CGU is estimated to exceed its carryingamount by approximately HK$3.4 million, HK$12.7 million and HK$16.1 million at 31 March 2020, 31March 2021 and 30 September 2021, respectively.

Changing the discount rates and other assumptions selected by management in assessingimpairment, including the growth rates assumption in the cash flow projections, could materially affectthe net present value used in the impairment test.


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At 31 March 2020, if revenue growth rates (year on year), gross margin ratio, discount rate andterminal growth rate for each of the forecast years for HKID Limited and its subsidiaries had been 1.0%,1.3%, 1.6%, and 0.7%, respectively lower than management’s estimates with all other variables heldconstant, the recoverable amount of HKID Limited and its subsidiaries would have been equal to itscarrying amount.

At 31 March 2021, if revenue growth rates (year on year), gross margin ratio, discount rate andterminal growth rate for each of the forecast years for HKID Limited and its subsidiaries had been 3.5%,4.2%, 7.2%, and 2.6%, respectively lower than management’s estimates with all other variables heldconstant, the recoverable amount of HKID Limited and its subsidiaries would have been equal to itscarrying amount.

At 30 September 2021, if revenue growth rates (year on year), gross margin ratio, discount rateand terminal growth rate for each of the forecast years for HKID limited and its subsidiaries had been5.1%, 3.3%, 6.1% and 9.9%, respectively lower than management’s estimates with all other variablesheld constant, the recoverable amount of HKID Limited and its subsidiaries would have been equal toits carrying amount.

With reasonably possible changes in key assumptions with all other variables held constant foreach of the forecast years, the carrying amount of the CGU would exceed its recoverable amount by:

As at 31 MarchAs at

30 September20212020 2021

HK$’000 HK$’000 HK$’000

Revenue growth rates (year on year) decreased by 10% 842 — —Gross margin ratio decreased by 10% 3,549 — —Pre-tax discount rate increased by 10% 471 — —Terminal growth rate decreased by 10% — — —

For details of our goodwill, see Note 13 to our consolidated financial statements set out in theAccountant’s Report included in Appendix I to this document.

Inventories

Our inventories represent pharmaceutical goods and medical supplies and our inventories amountedto HK$7.9 million, HK$10.1 million, HK$12.4 million and HK$10.9 million as at 31 March 2019, 2020and 2021 and 30 September 2021, respectively.

Our inventories increased by HK$2.2 million, or 27.4%, from HK$7.9 million as at 31 March 2019to HK$10.1 million as at 31 March 2020 primarily due to higher demand of pharmaceutical goods andmedical supplies because of an increase in number of specialist doctors from 11 as at 31 March 2019 to13 as at 31 March 2020.

Our inventories increased by HK$2.3 million, or 22.1%, from HK$10.1 million as at 31 March2020 to HK$12.4 million as at 31 March 2021 mainly due to an increase in demand of pharmaceuticalgoods for oncology patients as Dr. Stanley Yu joined us in August 2020.

Our inventories decreased by HK$1.5 million, or 12.1%, from HK$12.4 million as at 31 March2021 to HK$10.9 million as at 30 September 2021, primarily due to our increased sales of medicinefrom the increased provision of medical services.

The following table sets out our average inventories turnover days for the periods indicated:


20212019 2020 2021

Average inventories turnover days(1) 55 63 85 81

Note:

(1) Average inventories turnover days were calculated based on the average of the beginning and ending balance of inventoriesof a given period divided by the cost of pharmaceutical goods and medical consumables for that corresponding period andmultiplied by the number of days in the period.


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Our average inventories turnover days increased from 55 days for the year ended 31 March 2019to 63 days for the year ended 31 March 2020 which was mainly due to an increase in purchase ofpharmaceutical products to cater for future demand.

Our average inventories turnover days increased from 63 days for the year ended 31 March 2020to 85 days for the year ended 31 March 2021 mainly due an increase in average inventories as wepurchased more pharmaceutical products to cater for additional demand, and in anticipation of potentialdelay in deliveries as a result of the COVID-19 pandemic.

Our average inventories turnover days decreased slightly from 85 days for the year ended 31March 2020 to 81 days for the six months ended 30 September 2021.

As at 31 October 2021, approximately HK$3.5 million or 31.9% of inventories as at 30 September2021 had been sold or utilised.

Trade Receivables

Our trade receivables mainly consist of the receivables from insurance companies and hospitals.Our individual patients usually settle their payments after each doctor visit by payment through cash,credit cards or other electronic means. During the Track Record Period, trade receivables were non-interest bearing and settled by bank transfer with a credit period of around 60 to 180 days after invoice.As at 31 March 2019, 2020 and 2021 and 30 September 2021, we had net trade receivables of HK$16.1million, HK$16.1 million, HK$19.1 million and HK$19.7 million, respectively.

Our gross trade receivables remained stable at HK$20.7 million as at 31 March 2019 and HK$20.9million as at 31 March 2020. Our gross trade receivables increased from HK$20.9 million as at 31March 2020 to HK$24.1 million as at 31 March 2021 mainly due to increased outstanding receivablesfrom hospitals as a result of timing differences in collection. Our gross trade receivables slightlyincreased from HK$24.1 million as at 31 March 2021 to HK$24.6 million as at 30 September 2021,primarily due to an increase in receivables from our provision of COVID-19 vaccination services.

The table below sets out an ageing analysis of trade receivables based on invoice date, as at thedate indicated:

As at 31 MarchAs at

30 September20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

Within 90 days 14,323 12,309 16,709 17,31591 to 180 days 2,405 1,753 1,678 1,686181 to 365 days 3,973 1,681 433 333Over 365 days 20 5,136 5,260 5,276

Gross trade receivables 20,721 20,879 24,080 24,610Less: allowance for impairment (4,622) (4,772) (4,972) (4,917)

Net Trade Receivables 16,099 16,107 19,108 19,693

Our trade receivables aged 181 days to 365 days as at 30 September 2021 amounting to HK$0.3million was mainly due to overdue receivables from hospital patients for which we determined wasrecoverable. Our trade receivables aged over 365 days amounting to HK$5.3 million as at 30 September2021 mainly relate to an individual patient that we made HK$4.6 million in provisions in FY2019. Weare still in the collection process for this HK$4.6 million, and recoverability remains uncertain. Theremaining HK$0.7 million mainly relates to overdue receivables from insurance companies that wedetermined was recoverable as at 30 September 2021.


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During the Track Record Period, we applied the HKFRS 9 simplified approach in measuring

expected credit losses which uses a lifetime expected loss allowance for all trade receivables. As at 31

March 2019, 2020 and 2021 and 30 September 2021, we assessed that the total expected credit loss

allowance was HK$4.6 million, HK$4.8 million, HK$5.0 million and HK$4.9 million, respectively,

under a 24 months expected losses model. Please see Notes 18 and 3.1(b) to our consolidated financial

statements set out in the Accountant’s Report included in Appendix I for further information.

The following table sets out our average net trade receivables turnover days for the periods

indicated:

Year ended 31 March

Six monthsended

30 September20212019 2020 2021

Average net trade receivables turnover days(1) 22 24 26 22

Note:

(1) Average net trade receivables turnover days were calculated based on the average of the beginning and the ending balanceof net trade receivables of a given period divided by revenue for that corresponding period multiplied by the number of daysin that period.

Our average net trade receivables turnover days increased from 22 days in FY2019 to 24 days in

FY2020 and 26 days in FY2021 mainly due to the change in the proportion of net trade receivables

from insurance companies as compared to receivables from hospitals, which have shorter turnover days.

Our average net trade receivables turnover days decreased from 26 days in FY2021 to 22 days for the

six months ended 30 September 2021.

As at 31 October 2021, approximately HK$12.1 million or 61.5% of net trade receivables as at 30

September 2021, have been settled by our customers.

Other Receivables, Deposits and Prepayments

Our other receivables, deposits and prepayments mainly consist of rental deposits and prepayments

for leasehold improvements. As at 31 March 2019, 2020 and 2021 and 30 September 2021, we had other

receivables, deposits and prepayments of HK$2.9 million, HK$8.4 million, HK$26.2 million and

HK$18.5 million, respectively.


– 210 –


The following table sets out the breakdown of our other receivables, deposits and prepayments asat the dates indicated:

As at 31 MarchAs at

30 September20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

Non-current portionDeposits 2,055 2,591 7,078 5,526Prepayments — — 8,744 701

2,055 2,591 15,822 6,227

Current portionPrepayments 169 2,533 1,924 1,245Prepaid [REDACTED] expenses — — 4,386 5,492Other receivables and deposits 678 3,319 4,037 5,501

847 5,852 10,347 12,238

Total 2,902 8,443 26,169 18,465

Our deposits, prepayments and other receivables increased from HK$2.9 million as at 31 March2019 to HK$8.4 million as at 31 March 2020 mainly due to an increase in prepayments and otherreceivables and deposits due to deposits for the production of corporate videos and rental prepayments.Our deposits, prepayments and other receivables further increased to HK$26.2 million as at 31 March2021 mainly due to rental deposits and prepayment for leasehold improvements provided for the newlyleased Integrated Flagship Medical Centre as well as prepaid [REDACTED] expenses. Our deposits,prepayments and other receivables decreased from HK$26.2 million as at 31 March 2021 to HK$18.5million as at 30 September 2021, primarily due to a decrease in prepayment for leasehold improvementsas the renovation of Integrated Flagship Centre was capitalised to property, plant and equipment in thisperiod and a decrease in rental deposits as we have ended our lease on the 8th floor of Central Buildingand received back our rental deposits.

Amounts Due from Shareholders

Amounts due from shareholders mainly represent interest-free advances provided to ourshareholder doctors that are not Directors in anticipation of future dividends to be declared to them aswell as outstanding amounts due from our Pre-[REDACTED] Investors. Our amounts due fromshareholders as at 31 March 2019, 2020 and 2021 and 30 September 2021 were HK$137.1 million,HK$36.1 million, HK$4.1 million and HK$5.2 million, respectively; and the changes were mainly dueto additional advances made to them as well as the outstanding amounts due from our Pre-[REDACTED] Investors agreement for share issuances and subsequent settlements. The HK$36.1million due from shareholders as at 31 March 2020 decreased to HK$4.1 million as at 31 March 2021mainly because of dividend payments during FY2021 and repayment from our shareholders of HK$5.1million. The amounts due from shareholders increased from HK$4.1 million as at 31 March 2021 toHK$5.2 million as at 30 September 2021, primarily due to additional advances made to our FoundingDoctors. The amounts due from shareholders of HK$5.2 million as at 30 September 2021 are non-tradein nature and will be settled by dividends and/or cash payments prior to the [REDACTED].

Amounts Due from Directors

Amounts due from Directors mainly represent interest-free advances provided to Dr. KennethTsang and Dr. Adam Leung in anticipation of future dividends to be declared to them. Our amounts duefrom Directors as at 31 March 2019, 2020 and 2021 and 30 September 2021 were HK$27.1 million,HK$51.5 million, HK$1.6 million and HK$2.4 million, respectively; and the changes were mainly due


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to additional advances made to our Directors during the Track Record Period and subsequentsettlements. The HK$51.5 million due from Directors as at 31 March 2020 decreased to HK$1.6 millionas at 31 March 2021 because HK$60.5 million was settled against amounts due from Directors as part ofthe HK$75.3 million dividend settlement made during FY2021; partly offset by HK$10.6 millionadditional advances provided to our Directors. The amounts due from Directors increased from HK$1.6million as at 31 March 2021 to HK$2.4 million as at 30 September 2021, primarily due to additionaladvances made to our Directors. The amounts due from Directors of HK$2.4 million as at 30 September2021 are non-trade in nature and will be settled by dividends and/or cash payments prior to the[REDACTED].

Amounts Due from Ultimate and Immediate Holding Companies

Our amounts due from ultimate and immediate holding companies amounted to HK$30,000,HK$54,000, HK$4,000 and HK$5,000 as at 31 March 2019, 2020 and 2021 and 30 September 2021,respectively. These amounts represent expenses paid on behalf of our holding companies during theTrack Record Period. All outstanding amounts due from ultimate and immediate holding companies willbe settled by way of cash payment prior to the [REDACTED].

Trade Payables

Our trade payables mainly include amounts due to our pharmaceutical suppliers. During the TrackRecord Period, our trade payables were non-interest bearing and the normal trade credit term granted toour Group ranged from 30 to 60 days from the date of invoice. As at 31 March 2019, 2020 and 2021and 30 September 2021, our trade payables was HK$5.4 million, HK$6.3 million, HK$6.1 million andHK$6.1 million, respectively. The increase was mainly due to increased purchases of pharmaceuticalproducts and laboratory test cost as more specialist doctors joined us.

The table below sets out an ageing analysis of trade payables based on the invoice date, as at thedates indicated:

As at 31 March As at30 September

20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

0–30 days 4,588 5,415 4,854 5,09831–60 days 815 875 1,134 89761–90 days 18 14 97 115Over 90 days 23 3 26 38

5,444 6,307 6,111 6,148

The following table sets out our average trade payables turnover days for the periods indicated:

Year ended 31 March

Six monthsended

30 September20212019 2020 2021

Average trade payables turnover days(1) 38 35 39 35

Note:

(1) Average trade payables turnover days were calculated based on the average of the beginning and the ending balance of tradepayables of a given period divided by the cost of inventories and laboratory test costs for that corresponding period

multiplied by the number of days in the period.


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Our average trade payables turnover days decreased from 38 days in FY2019 to 35 days inFY2020 primarily due to the increase in the proportion of trade payables with credit term of 30 days.Our average trade payables turnover days increased to 39 days for FY2021 and decreased back to 35days for the six months ended 30 September 2021.

As at 31 October 2021, approximately HK$4.4 million or 71.6% of our trade payables as at 30September 2021 had been subsequently settled.

Accruals and Other Payables

Our accruals and other payables mainly represent payables to consultants for service fees due toour Equity Partner Doctors, accrued employee benefits, accrued auditors’ remuneration, [REDACTED]expense payables and other accrued operating expenses. As at 31 March 2019, 2020 and 2021 and 30September 2021, we had accruals and other payables of HK$8.1 million, HK$19.3 million, HK$25.1million and HK$29.8 million, respectively.

The following table sets out the breakdown of our accruals and other payables as at the datesindicated:

As at 31 MarchAs at

30 September20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

Payables to consultants 6,508 16,434 15,042 14,780Accrued employee benefits 161 769 1,481 1,435Payables for property, plant and equipment — 437 — 2,515Payables to radiologists — 188 593 1,403Payable for property agency commission — — 1,500 —

[REDACTED] expense payables — — 4,678 6,571Accrued auditors’ remuneration 1,079 835 896 708Others 333 599 887 2,346

8,081 19,262 25,077 29,758

Accruals and other payables increased from HK$8.1 million as at 31 March 2019 to HK$19.3million as at 31 March 2020 mainly due to an increase in amounts due to consultants for increasedservices fees and increased accruals for employee benefit expenses and operating expenses. Accruals andother payables further increased to HK$25.1 million as at 31 March 2021 mainly due to increased[REDACTED] expense payables and payables to a property agent for the acquisition of the IntegratedDiagnostic Centre. Accruals and other payables increased from HK$25.1 million as at 31 March 2021 toHK$29.8 million as at 30 September 2021 mainly due to an increase in payables for property, plant andequipment due to additional leasehold improvements from the Integrated Flagship Medical Centre andan increase in the [REDACTED] expense payables.


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INDEBTEDNESS

As at 31 March 2019, 2020 and 2021, 30 September 2021 and 31 October 2021, we hadindebtedness of HK$17.1 million, HK$22.5 million, HK$168.1 million, HK$164.6 million andHK$162.5 million, respectively. The following table set out the breakdown of our indebtedness as atthe dates indicated:

As at 31 MarchAs at

30 September2021

As at31 October

20212019 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(unaudited)

Non-currentBank borrowings — — — 70,228 69,962Lease liabilities 9,328 7,199 75,541 66,885 65,467

9,328 7,199 75,541 137,113 135,429CurrentBank borrowing — — 75,000 8,199 8,203Lease liabilities(1) 7,349 15,327 17,551 19,290 18,837Amounts due to shareholders and

ultimate holding company 279 — — — —

Amounts due to related parties 100 — — — —

7,728 15,327 92,551 27,489 27,040Total 17,056 22,526 168,092 164,602 162,469

Note:

(1) Includes finance lease liabilities of HK$2.6 million, nil, nil and nil as at 31 March 2020 and 2021, 30 September 2021 and31 October 2021, respectively, relating to Hong Kong Imaging’s MRI machine.

We have adopted HKFRS 16 ‘‘Leases’’ consistently throughout the Track Record Period. UnderHKFRS 16, an asset (the right-of-use of the leased property) and a financial liability to pay rentals arerecognised on our consolidated statements of financial position as ‘‘lease liabilities’’.

Our indebtedness increased from HK$17.1 million as at 31 March 2019 to HK$22.5 million as at31 March 2020 mainly due to increased lease liabilities of HK$5.8 million because of additions to leaseof medical centres and corporate office.

Our indebtedness increased from HK$22.5 million as at 31 March 2020 to HK$168.1 million as at31 March 2021 mainly attributable to the Mortgage Loan as discussed below and an increase in leaseliabilities mainly due to the new lease of the 9th Floor of Central Building for our Integrated FlagshipMedical Centre.

Our indebtedness decreased from HK$168.1 million as at 31 March 2021 to HK$164.6 million asat 30 September 2021 mainly due to a decrease in lease liabilities. Current bank borrowings decreasedwhile non-current bank borrowings increased between 31 March 2021 and 30 September 2021 mainlydue to re-classification of bank borrowings as a result of removal of the on-demand payment clause fromthe Mortgage Loan.

Bank Borrowings

As disclosed above, we completed the Property Purchase on 31 March 2021 partly financedthrough a mortgage loan of HK$75.0 million from a bank in Hong Kong (the ‘‘Mortgage Loan’’). TheMortgage Loan contains the following key terms:

(i) Interest rate: one-month HIBOR + 1.65% per annum;

(ii) Repayment period: 240 monthly instalments;


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(iii) Legal charge: first legal charge and assignment of rentals over the underlying property (i.e.

6th Floor of Euro Trade Centre, Central, Hong Kong) of up to HK$150.0 million;

(iv) Corporate guarantee: continuing corporate guarantee by the Company in the amount of

HK$105.0 million; and

(v) Prepayment penalty: the Mortgage Loan is subject to an prepayment penalty of 2% of the

original principal amount (i.e. HK$75.0 million) during the first year and 1% of the original

principal loan during the second year, there is no repayment penalty after the second year.

The Group expects to repay the Mortgage Loan in full after the prepayment penalty period is over

(i.e. around April 2023) using the [REDACTED] from the [REDACTED]. Please see section headed

‘‘Future Plans and [REDACTED]’’ for details.

We also obtained a revolving loan facility of up to HK$30.0 million from a bank in Hong Kong

(the ‘‘Revolving Loan’’) for working capital purposes, of which HK$5.0 million has been drawn down

as at 30 September 2021 and an additional HK$25.0 million is expected to be drawn-down prior to the

[REDACTED]. The Revolving Loan contains the following key terms:

(i) Interest period: borrower is entitled to choose the interest period (‘‘Interest Period’’) for

each advance, being either one, two or three month(s);

(ii) Interest rate: 2.1% per annum + HIBOR for the relevant Interest Period;

(iii) Repayment period: all amounts shall be repaid or reborrowed at the end of each Interest

Period or otherwise repaid upon demand;

(iv) Legal charge: first legal charge and assignment of rentals over the underlying property (i.e.

6th Floor of Euro Trade Centre, Central, Hong Kong) of up to HK$150.0 million; and

(v) Corporate guarantee: continuing corporate guarantee by the Company in the amount of

HK$105.0 million.

In addition, we will obtain an overdraft facility of up to HK$60.0 million from a bank in Hong

Kong (the ‘‘Bank Overdraft’’) for working capital purposes, of which HK$20.0 million is expected to

be drawn-down prior to the [REDACTED]. The Bank Overdraft requires a charge on bank deposits of

no less that the aggregate limit available under this facility.

The Group expects to repay the Revolving Loan and Bank Overdraft using the [REDACTED] from

the [REDACTED]. Please see section ‘‘Future Plans and [REDACTED]’’ for details.

Our Directors confirmed that, as at 31 October 2021, being the latest practicable date for

determining indebtedness, save as disclosed above or any intra-group liabilities, we did not have any

banking facilities, any unutilised banking facilities or any outstanding or authorised but unissued debt

securities, term loans, other borrowings or indebtedness in the nature of borrowing, acceptance credits,

hire purchase commitments, mortgages and charges, contingent liabilities or guarantees outstanding. Our

Directors confirm that there was no material change in the indebtedness, capital commitments and

contingent liabilities of our Group since the latest date for liquidity disclosure and up to the Latest

Practicable Date.


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CAPITAL EXPENDITURES AND COMMITMENTS

Historical Capital Expenditures

Our capital expenditures primarily related to additions to our property, plant and equipment mainlywith respect to building, leasehold improvements, medical equipment and office equipment. Ouradditions to property, plant and equipment were HK$7.0 million, HK$7.3 million, HK$30.9 million andHK$24.4 million for each of the three years ended 31 March 2021 and the six months ended 30September 2021, respectively. In addition, we acquired Hong Kong Imaging in October 2019 for a totalcash consideration of HK$22.0 million. For further information, please see Note 11 and Note 33 to ourconsolidated financial statements set out in the Accountant’s Report included in Appendix I to thisdocument.

Capital Commitments

Our capital commitments primarily related to the contracted but not yet provided office equipment,medical equipment and leasehold improvements. As at 30 September 2021, we did not have any capitalcommitments.

Operating Lease Commitments

We lease certain premises under operating leases arrangements that are within one year. We hadoperating lease commitments of nil, HK$3.1 million, HK$0.7 million and HK$1.0 million as at 31March 2019, 2020 and 2021 and 30 September 2021, respectively.

RELATED PARTY TRANSACTIONS

During the Track Record Period, our related party balances mainly consisted of amounts due fromDirectors and amounts due from shareholders, which are discussed above. As at 30 September 2021, ouramounts due from Directors was HK$2.4 million and amounts due from shareholders was HK$5.2million. Such amounts will be settled by the Special Dividend (as defined below) and/or cash paymentsprior to the [REDACTED]. For further details, see Note 34 to our consolidated financial statements setout in the Accountant’s Report included in Appendix I to this document.

Our Directors confirm that all transactions with related parties described in Note 34 to ourconsolidated financial statements set out in the Accountant’s Report included in Appendix I to thisdocument were conducted on normal commercial terms negotiated between the Group and the respectiverelated parties at an arm’s length basis; and would not distort our financial results during the TrackRecord Period or make our historical results not reflective of our future performance.

PERFORMANCE GUARANTEE FOR HONG KONG IMAGING

In October 2019, Smart Winner, one of the indirectly wholly-owned subsidiaries of the Company,acquired 100% equity interest in Hong Kong Imaging through acquiring 100% equity interest in Pixel,94% equity interest in Pegasus from several Independent Third Parties, and 6% equity interest inPegasus from Mrs. Tsang (the ‘‘Acquisition’’). After the completion of the Acquisition, Smart Winnerdirectly holds 100% equity interest in Pixel and Pegasus, and indirectly holds 100% equity interest inHKID Limited, 51% equity interest in HKID (Lab) and 51% equity interest in HKID (MRI),respectively.

A performance guarantee arrangement arose as part of the Acquisition. An arrangement wasentered into between the Group and Dr. Ooi, who was one of the selling shareholders, pursuant to whichDr. Ooi guaranteed that Hong Kong Imaging’s minimum aggregate consolidated net income for twoyears from the acquisition date (the ‘‘Original Measurement Period’’) would be at least HK$9.0


– 216 –


million (the ‘‘Performance Target’’). In the event Hong Kong Imaging fails to meet the PerformanceTarget by the end of the Original Measurement Period, Smart Winner is entitled to receive cashcompensation from Dr. Ooi, based on the formula of: the shortfall of amount of consolidated net incomemultiplied by 5 and 26.01%. The Original Measurement Period is subject to revision in case of certainconditions as stipulated in the sale and purchase agreement with respect to the Acquisition. In view ofthe social unrest in Hong Kong and COVID-19 pandemic, we agreed to revise the Measurement Periodto start from 1 November 2020 to 31 October 2022 (the ‘‘Revised Measurement Period’’), subject tofurther development of the COVID-19 situation.

For each of the years ended 31 March 2018 and 2019, Hong Kong Imaging recorded revenue ofapproximately HK$48.0 million and HK$47.0 million, respectively. Due to the social unrest in HongKong and the COVID-19 pandemic, revenue decreased to approximately HK$38.0 million for the fullyear ended 31 March 2020 and HK$32.5 million for the year ended 31 March 2021. Hong KongImaging revenue improved to HK$21.8 million for the six months ended 30 September 2021 ascompared to HK$15.8 million for the six months ended 30 September 2020.

In addition, Hong Kong Imaging’s key medical equipment was fully depreciated by March 2021.Hong Kong Imaging recorded depreciation expenses of HK$4.8 million, HK$3.4 million and HK$1.0million for each of the years ended 31 March 2019, 2020 and 2021, respectively, and have been nonefor the years thereafter. Accordingly, the depreciation expense for the Original Measurement Period (1November 2019 to 31 October 2021) was HK$4.5 million, while the projected depreciation expense forthe Revised Measurement Period (1 November 2020 to 31 October 2022) is expected to be aroundHK$1.0 million. The reduction in depreciation expenses contributed to the improvement of Hong KongImaging’s profitability for the year ended 31 March 2021 (net loss of HK$1.8 million for the year ended31 March 2021 as compared with the net loss of HK$2.6 million for the full year ended 31 March2020), and is expected to improve its net profit for the year ending 31 March 2022 as the key medicalequipment has been fully depreciated by March 2021.

The Group classified the performance guarantee arrangement as a financial asset at fair valuethrough profit or loss. As the Performance Target is expected to be met, the fair value of theperformance guarantee was immaterial as at 31 March 2020 and 2021 and 30 September 2021. Pleasealso see Notes 3.3 and 32 to the Accountant’s Report included in Appendix I of this document.

CONTINGENT LIABILITIES AND OFF BALANCE SHEET ARRANGEMENTS

During the Track Record Period and up to the Latest Practicable Date, we did not have anymaterial contingent liabilities nor any other material off-balance sheet arrangements, variable interest inany unconsolidated entity that provides financing, liquidity, market risk or credit support to us orengages in leasing, hedging or research and development services with us.


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FINANCIAL RISK MANAGEMENT

Our activities expose us to financial risks including foreign exchange risks, credit risks andliquidity risks. Please also see Note 3.1 to our consolidated financial statements set out in theAccountant’s Report included in Appendix I to this document.

Foreign Exchange Risks

We did not have any significant foreign exchange risks as our sales and purchase transactions aredenominated in Hong Kong dollars and our functional currency is the Hong Kong dollar.

Credit Risks

The credit risk of the Group mainly arises from cash and cash equivalents, trade receivables, otherreceivables, deposits, amounts due from directors, shareholders and related companies. The carryingamounts of these balances represent the Group’s maximum exposure to credit risk in relation to financialassets.

In order to minimise the credit risk arising from bank deposits, deposits are mainly placed withreputable banks. Management assesses the credit risk for other receivables, deposits, amounts due fromdirectors, shareholders and related companies by assessing the nature of the financial assets and thefinancial condition of the counterparties. Management has closely monitored the credit qualities and thecollectability of these financial assets.

During the Track Record Period, our clients primarily consisted of individual clients and corporateclients for our medical services. Our individual clients represented a significant portion of our clientbase and the amount of revenue generated from them represented 92.6%, 91.1%, 93.1% and 96.6% ofour total revenue for the years ended 31 March 2019, 2020 and 2021 and the six months ended 30September 2021, respectively. For the same periods, revenue generated from our corporate clientsrepresented 5.6%, 7.8%, 8.1% and 5.8% of our total revenue, respectively.

Individual clients generally settle their own medical payments by cash or cash equivalent, and theirpayments include (i) where they are not covered by any medical scheme or insurance plan, the feeincurred for the consultation and treatment received and (ii) where clients are under a medical scheme orinsurance plan, the co-payment amount for the treatment received as required under the scheme. Forrevenue generated from our clients’ stay at the private hospitals, payments from these clients will becollected by the respective hospitals on behalf of us and such hospitals will generally transfer theamount to us via bank transfer within 60 days.

We generally enter into contractual arrangements with corporate clients including medical schemesand insurance companies, who settle medical payments for their policy members or staff members whoare our patients. Medical scheme and insurance companies structure and administer corporate healthcarebenefit plans to their members. We provide these members with specialist medical services and alliedhealth services. Under our service contracts with the medical schemes and insurance companies, weoffer services to their members in return for a service fee at an agreed rate based on the number oftreatments to be received. A credit term of up to six months is generally granted to medical schemes andinsurance companies.

For information on our trade receivables, please see the section headed ‘‘— Description of SelectedConsolidated Statement of Financial Position Items — Trade receivables’’ above.


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Liquidity Risks

We regularly monitor our liquidity risks and maintain adequate cash and cash equivalents to meetour working capital requirements. As at 30 September 2021, we had total financial liabilities ofHK$66.1 million that was due on demand or within one year.

KEY FINANCIAL RATIOS

Year ended 31 March

Six monthsended

30 September20212019 2020 2021

(%)

Profitability ratiosGross profit margin(1) 43.2 30.4 26.2 24.1

Net profit margin(2) 30.6 20.0 8.1 9.4

Return on equity(3) 48.6 23.3 9.6 N/A

Return on total assets(4) 38.3 16.9 5.6 N/A

As at 31 MarchAs at

30 September20212019 2020 2021

(times)

Liquidity ratiosCurrent ratio(5) 7.6 2.5 1.1 2.5

Quick ratio(6) 7.4 2.4 1.0 2.3

Capital adequacy ratios (%)

Gearing ratio(7) 7.9 10.5 71.2 64.9

Notes:

(1) The calculation of gross profit margin is based on gross profit for the year/period divided by revenue for the year/period andmultiplied by 100%.

(2) The calculation of net profit margin is based on profit for the year/period divided by revenue for the year/period andmultiplied by 100%.

(3) The calculation of return on equity is based on profit for the year attributable to owners of the Company divided by averagetotal equity for the year and multiplied by 100%.

(4) The calculation of return on total assets is based on profit for the year attributable to owners of the Company divided byaverage total assets for the year and multiplied by 100%.

(5) The calculation of current ratio is based on current assets divided by current liabilities.

(6) The calculation of quick ratio is based on current assets less inventories divided by current liabilities.

(7) The calculation of gearing ratio is based on total indebtedness (including lease liabilities, amounts due to shareholders,amount due to the immediate holding company, amounts due to Directors and amounts due to related parties) divided bytotal equity and multiplied by 100%.

Please see the section headed ‘‘— Results of Operation of Our Group’’ above for a discussion of

the factors affecting our gross profit margin and net profit margin during the Track Record Period.


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Return on equity

Our return on equity decreased from 48.6% for the year ended 31 March 2019 to 23.3% for theyear ended 31 March 2020 primarily due to a decrease in profit for the year attributable to owners of theCompany from HK$60.0 million in FY2019 to HK$50.2 million in FY2020 due to lower gross profit,higher administrative expenses and provisions for trade receivables, while our average total equityincreased significantly from HK$123.5 million as at 31 March 2019 to HK$215.2 million as at 31 March2020 mainly due to additional Pre-[REDACTED] investments. Our return on equity decreased from23.3% for the year ended 31 March 2020 to 9.6% for the year ended 31 March 2021 primarily due to adecrease in profit for year attributable to owners of the Company from HK$50.2 million in FY2020 toHK$21.6 million in FY2021 due to lower gross profit as a result of the COVID-19 outbreak and higheradministrative expenses such as [REDACTED] expenses, while our average total equity increased fromHK$215.2 million as at 31 March 2020 to HK$225.2 million as at 31 March 2021. This calculation isnot applicable for the six months ended September 30, 2021 as (i) calculation using profit for the sixmonths ended September 30, 2021 is not comparable to using profit for the year; and (ii) the profit forthe six months ended September 30, 2021 cannot be meaningfully annualized due to fluctuation ofnumber of patients visits or admissions and average spending per patient visit or admission throughoutthe year.

Return on total assets

Our return on total assets decreased from 38.3% the year ended 31 March 2019 to 16.9% for theyear ended 31 March 2020 primarily due to a decrease in profit for the year from HK$60.0 million inFY2019 to HK$49.7 million in FY2020 due to lower gross profit and higher administrative expenses,while our average total assets increased significantly from HK$156.4 million as at 31 March 2019 toHK$296.6 million as at 31 March 2020 mainly due to additional Pre-[REDACTED] Investments. Ourreturn on assets decreased from 16.9% for the year ended 31 March 2020 to 5.6% for the year ended 31March 2021 primarily due to a decrease in profit for year attributable to owners of the Company fromHK$50.2 million in FY2020 to HK$21.6 million in FY2021 due to lower gross profit as a result of theCOVID-19 outbreak and higher administrative expenses such as [REDACTED] expenses, while ouraverage total assets increased significantly from HK$296.6 million as at 31 March 2020 to HK$389.3million as at 31 March 2021 mainly due the new lease of the Integrated Flagship Medical Centre and theacquisition of the Integrated Diagnostic Centre. This calculation is not applicable for the six monthsended September 30, 2021 as (i) calculation using profit for the six months ended September 30, 2021 isnot comparable to using profit for the year; and (ii) the profit for the six months ended September 30,2021 cannot be meaningfully annualized due to fluctuation of number of patient visits or admissions andaverage spending per patient visit or admission throughout the year.

Current ratio and quick ratio

Our current ratio decrease from 7.6 as at 31 March 2019 to 2.5 as at 31 March 2020, and our quickratio decreased from 7.4 as at 31 March 2019 to 2.4 as at 31 March 2020 primarily due to the significantincrease in current liabilities from HK$30.0 million as at 31 March 2019 to HK$112.0 million as at 31March 2020 mainly due to dividends declared and increase in accruals of service fees to consultants aswell as lease liabilities as a result of business growth; partly offset by an increase in current assetsmainly due to an increase in advances provided to the Directors and shareholders.

Our current ratio decreased from 2.5 as at 31 March 2020 to 1.1 as at 31 March 2021, and ourquick ratio decreased from 2.4 as at 31 March 2020 to 1.0 as at 31 March 2021 primarily due to anincrease in short-term bank borrowing of HK$75.0 million for the acquisition of the IntegratedDiagnostic Centre, partly offset by the settlement of dividend payables during FY2021.

Our current ratio increased from 1.1 as at 31 March 2021 to 2.5 as at 30 September 2021, and ourquick ratio increased from 1.0 as at 31 March 2021 to 2.3 as at 30 September 2021 primarily due to adecrease in the current portion of bank borrowings as it was reclassified to non-current portion.


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Gearing ratio

Our gearing ratio increased from 7.9% as at 31 March 2019 to 10.5% as at 31 March 2020primarily due to an increase in lease liabilities as we rented more office space.

Our gearing ratio significantly increased from 10.5% as at 31 March 2020 to 71.2% as at 31 March2021 primarily due to an increased lease liabilities, particularly for the Integrated Flagship MedicalCentre and increased bank borrowings for the purchase of the Integrated Flagship Medical Centre.

Our gearing ratio decreased from 71.2% as at 31 March 2021 to 64.9% as at 30 September 2021primarily due to a decrease in lease liabilities.


– 220.1 –


DIVIDENDS AND DIVIDEND POLICY

Historical Dividends

During the Track Record Period, we have declared a dividend of HK$66.7 million in February

2020 and an additional dividend of HK$60.0 million in October 2020 (the ‘‘TRP Dividend’’), all of

which were settled as at 30 September 2021. In December 2021, we further declared a dividend of

HK$20.4 million (the ‘‘Special Dividend’’ and collectively with the TRP Dividend, the ‘‘Pre-[REDACTED] Dividends’’), which was settled as of the Latest Practicable Date. The following table

sets out the movements of our dividends payable for the years ended 31 March 2020 and 2021 and the

six months ended 30 September 2021, and from 1 October 2021 up to the Latest Practicable Date.

Year ended 31 March

Six monthsended

30 September2021

From 1 October2021 up tothe Latest

Practicable Date2020 2021

HK$’000 HK$’000 HK$’000 HK$’000

Dividends payable, as at beginning of

the period — 66,720 — —

Dividends declared during the period 66,720 60,000 — 20,394

Dividends paid to Directors (Dr. Kenneth

Tsang and Dr. Adam Leung) — (75,288) — (10,551)

Dividends paid to shareholders (excluding

Directors) — (51,432) — (9,843)

Dividends payable, as at ending ofthe period 66,720 — — —

Dividend Policy

The Directors may recommend or declare dividends in the future after taking into account the

Group’s operating performance and cash flows over the preceding year, operating plans moving forward,

planned capital expenditures, as well as other use of funds that may affect or are deemed relevant to the

Group’s financial position. The dividend distribution record in the past may not be used as a reference

or basis to determine the level of dividends that may be declared or paid by the Company in the future.

The amount and manner by which dividends will be declared will be subject to the Company’s

constitutional documents and the Companies Act. No dividend shall be declared or payable except out of

the Group’s profits and reserves lawfully available for distribution. The Board’s recommendation on

future declarations of dividends may or may not reflect the Group’s historical declarations of dividends.

Such recommendations are put forward at the absolute discretion of the Directors. The Company’s

shareholders, in a general meeting, must also approve any declaration of dividends.

Under Cayman Islands law, dividends may be paid out of the profits of our Company or out of

sums standing to the credit of our share premium account provided that under no circumstances may

dividends be paid out of share premium account if this would result in the Company being unable to pay

its debts as they fall due in the ordinary course of business. Our Shareholders may by ordinary

resolution declare a dividend, but no dividend may exceed the amount recommended by our Directors.


– 221 –


Subject to the above, the Directors expect that the Company may be relied upon to regularlydeclare dividends on an annual basis based on the profit attributable to equity holders of the Companyfrom the preceding financial year. In addition, the Directors may, from time-to-time, declare special orinterim dividends, as may be deemed justifiable by the Company’s operating performance, as well as itscurrent and reasonable forward-looking estimates of financial condition.

DISTRIBUTABLE RESERVES

As at 30 September 2021, our Company had no reserves available for distribution to ourShareholders.

[REDACTED]

Assuming that the [REDACTED] is not exercised, the [REDACTED] expenses in relation to the[REDACTED] (including [REDACTED] fees, professional fees and other fees) are estimated to beHK$[REDACTED] (based on the mid-point of the indicative [REDACTED] for the [REDACTED]), ofwhich approximately HK$[REDACTED] and HK$[REDACTED] were charged to the consolidatedstatements of comprehensive income for the year ended 31 March 2021 and the six months ended 30September 2021, respectively. We expect that approximately HK$[REDACTED] will be further chargedto the consolidated statements of comprehensive income for the year ending 31 March 2022 andHK$[REDACTED] will be accounted for as a deduction from equity upon completion of the[REDACTED].

Our [REDACTED] expenses as a percentage of [REDACTED] (assuming the mid-point of theindicative [REDACTED] for the [REDACTED] of HK$[REDACTED] per [REDACTED] and the[REDACTED] is not exercised) is estimated to be approximately [REDACTED]%.

UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS

The following unaudited pro forma financial information prepared in accordance with Rule 4.29 ofthe Listing Rules is for illustrative purpose only, and is set out herein to provide the prospectiveinvestors with further illustrative financial information about the effect of the [REDACTED] on theconsolidated net tangible assets of the Group attributable to the owners of the Company as at 30September 2021 as if the [REDACTED] had taken place on 30 September 2021. Because of itshypothetical nature, the unaudited pro forma financial information may not give a true picture of thefinancial position of our Group had the [REDACTED] been completed on 30 September 2021 or at anyfuture dates.

Auditedconsolidated nettangible assets of

the Groupattributable to the

owners of theCompany as at30 September

2021(1)

Estimated[REDACTED]

from the[REDACTED](2)

Unaudited proforma adjustedconsolidated nettangible assets of

the Groupattributable to

the owners of theCompany as at30 September

2021

Unaudited proforma adjustedconsolidated nettangible assetsof the Group

attributable to theowners of theCompany per

Share(3)

HK$’000 HK$’000 HK$’000 HK$

Based on an [REDACTED] of

HK$[REDACTED] per Share 232,106 [REDACTED] [REDACTED] [REDACTED]

Based on an [REDACTED] of

HK$[REDACTED] per Share 232,106 [REDACTED] [REDACTED] [REDACTED]


– 222 –


Notes:

(1) The audited consolidated net tangible assets attributable to the owners of the Company as at 30 September 2021 isextracted from the Accountant’s Report included in Appendix I to this document, which is based on the auditedconsolidated net assets of the Group attributable to the owners of the Company as at 30 September 2021 ofapproximately HK$249,900,000 with an adjustment for the intangible assets of the Group as at 30 September 2021 ofapproximately HK$17,794,000.

(2) The estimated [REDACTED] from the [REDACTED] are based on [REDACTED] [REDACTED] and the indicative[REDACTED] of HK$[REDACTED] per Share and HK$[REDACTED] per Share, being low and high end of theindicative [REDACTED], after the deduction of the estimated [REDACTED] fees and other [REDACTED] relatedexpenses paid/payable by the Company (excluding [REDACTED] expenses of approximately HK$[REDACTED]which have been accounted for prior to 30 September 2021), and takes no account of any Shares which may beallotted and issued upon the exercise of the [REDACTED].

(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after the adjustmentsreferred to in the preceding paragraphs and on the basis that [REDACTED] Shares were in issue assuming that the[REDACTED] and the [REDACTED] has been completed on 30 September 2021 but does not take into account ofany Shares to be issued pursuant to the exercise of the [REDACTED], any Shares which may be granted under theShare Option Scheme and any Shares that may be issued and repurchased by the Company pursuant to the generalmandates.

(4) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of the Group toreflect any trading results or other transactions of the Group entered into subsequent to 30 September 2021. Inparticular, the unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the Companydoes not take into account the pre-[REDACTED] dividend of HK$20,392,833 declared in December 2021. Had suchissue of Shares and pre-[REDACTED] dividend been taken into account, the unaudited consolidated pro formaadjusted net tangible assets per Share would be HK$[REDACTED] and HK$[REDACTED], assuming the indicative[REDACTED] of HK$[REDACTED] per Share and HK$[REDACTED] per Share respectively.

RECENT DEVELOPMENTS AND MATERIAL ADVERSE CHANGE

Subsequent to the Track Record Period and up to the Latest Practicable Date, our revenues fromour Medical Centres, inpatient services provided at private hospitals and from Hong Kong Imagingremained stable. Save for the estimated [REDACTED] expenses of HK$[REDACTED] million asdiscussed above, the Directors confirm that there has been no material adverse change in the financial ortrading position of our Group since 30 September 2021 and up to the Latest Practicable Date and noevent had occurred since 30 September 2021 that would materially and adversely affect the informationin the Accountant’s Report included in Appendix I to this document.

In June 2021, we relocated our HKMC I, HKMC III, HKMC Geriatric Medicine Centre andHKMC Paediatric Centre to our Integrated Flagship Medical Centre at suite 901, Central Building, 1–2Pedder Street, Central, Hong Kong.

In June 2021, one of our Employee Doctors, Dr. David But, tendered his resignation ofemployment with us, and his last employment date with us was in September 2021. Our Directorsconsidered that his resignation will not have any significant impact on our business.

In August 2021, one of our Equity Partner Doctors, Dr. Ada Ma, tendered her resignation ofemployment with us and was on leave since 1 August 2021. Her last employment date with us isexpected to be in January 2022. Dr. Ada Ma contributed a Fixed Committed Fee Contribution of onlyHK$0.7 million, HK$1.5 million, HK$1.5 million and HK$0.8 million to our profit before tax for theyears ended 31 March 2019, 2020 and 2021 and the six months ended 30 September 2021, respectively,and our Directors considered that her resignation will not have any significant impact to our business.

In September 2021, we engaged a specialist doctor in cardiology as an employee that is expectedto join us starting in February 2022. This specialist doctor is entitled to a fixed salary, plus incentiveprofit sharing (if any) which increases progressively from 25% to 50% based on different thresholds.

In October 2021, we engaged a specialist doctor in gastroenterology & hepatology as an employeethat joined us in November 2021. The specialist doctor is entitled to a fixed salary, plus incentive profitsharing (if any) which increases progressively from 25% to 50% based on different thresholds.

In December 2021, we engaged a doctor in general practice as a panel specialist that is expected tojoin us starting in January 2022. This panel specialist is entitled to a fee splitting arrangement wherebyhe shall be entitled to 70% of all medical income.


– 223 –


In December 2021, we engaged a specialist doctor in oncology as an employee that is expected tojoin us starting in February 2022. This specialist doctor is entitled to a fee splitting arrangementwhereby she shall be entitled to the higher of: (i) 70% for all out patients consultation fee, radio-therapyprocedures and related fees, consultation fee and any medical service fees in at hospitals, and 20% ofgross profit from medicine income; or (ii) a fixed monthly service fee.

In December 2021, we declared a dividend of HK$20.4 million, which was fully settled as at theLatest Practicable Date.

In December 2021, we entered into a non-binding strategic cooperation framework agreement with

a subsidiary of a Hong Kong listed company, which primarily engages in project management relating to

high-end medical and healthcare services in Mainland China. We intend to actively explore different

cooperation models with them, including but not limited to providing consultancy services in relation to

medical and healthcare services, professional training in the Guangdong – Hong Kong – Macao Greater

Bay Area, and telemedicine services to patients in Mainland China.


– 223.1 –


Impact of COVID-19

Although the COVID-19 outbreak did have some impact on our business and result of operations

during the Track Record Period, it did not have a material adverse effect.

Our revenue from medical services at our Medical Centres was HK$140.6 million, HK$137.8

million and HK$80.2 million for the years ended 31 March 2020 and 2021 and the six months ended 30

September 2021, respectively. Our number of patient visits at our Medical Centres decreased to 32,490

visits for the year ended 31 March 2021 from 33,048 visits for the year ended 31 March 2020, mainly

due to the COVID-19 outbreak along with relayed delays in seeking non-urgent medical treatment,

travel restrictions and the slowdown in the Hong Kong economy. Our number of patients visits at our

Medical Centres increased to 18,370 visits for the six months ended 30 September 2021 from 15,966

visits for the six months ended 30 September 2020, mainly due to partial recovery from the COVID-19

pandamic coupled with new doctors that joined us.

Our revenue from medical services at hospitals was HK$91.9 million, HK$80.2 million and

HK$47.7 million for the years ended 31 March 2020 and 2021 and the six months ended 30 September

2021, respectively. Our number of inpatient hospital admissions for which we provided medical services

have increased only slightly to 8,156 admissions for the year ended 31 March 2021 from 8,013

admissions for the year ended 31 March 2020, mainly due to the general apprehension of going to

hospitals and resulting delays for non-urgent medical treatment. Our number of inpatient hospital

admissions for which we provided medical services has increased to 5,050 admissions for the six months

ended 30 September 2021 from 3,836 admissions for the six months ended 30 September 2020, mainly

due to partial recovery from the COVID-19 pandemic.

We believe that the negative impact of COVID-19 outbreak on our business and the private

healthcare sector in Hong Kong is temporary and limited, and once an effective vaccine is widely

distributed and implemented in Hong Kong and the borders between Hong Kong and Mainland China

reopens, our business will continue to grow. The COVID-19 outbreak has increased public awareness of

the need to maintain good health and wellness, and we believe this would positively impact the demand

for private healthcare in Hong Kong going forward. As such, our Directors confirm that the COVID-19

outbreak is not expected to have a material adverse effect on our business strategies and we will utilise

the [REDACTED] from the [REDACTED] in accordance with the section headed ‘‘Future Plans and

[REDACTED]’’ in this document.


– 224 –


NO ADDITIONAL DISCLOSURE REQUIRED UNDER THE LISTING RULES

Our Directors have confirmed that as at the Latest Practicable Date, there were no circumstances

that would give rise to a disclosure required under Rules 13.13 to 13.19 in Chapter 13 of the Listing

Rules had the Shares been [REDACTED] on the Stock Exchange on that date.


– 225 –


REASONS FOR THE [REDACTED]

Our Directors believe that the [REDACTED] will provide us with more diversified financialresources to better capture business opportunities and fulfil our external funding needs, especially inview of our establishment and development of our Integrated Diagnostic Centre, Integrated FlagshipMedical Centre, HKMC Oncology Centre, HKMC Dental Centre and HKMC SKIN Centre, which arefurther discussed below. We believe the establishment and development of these medical centres willhelp our business grow by capturing new clients in Hong Kong and medical tourists from MainlandChina. More importantly these new medical centres will help us take advantage of market opportunities,and when combined with our HKMC brand and platform, will help us attract talented and experienceddoctors that will further drive our growth in the future. For further details, see the section headed‘‘Business — Our Opportunities and Strategies’’.

Our Directors also believe the [REDACTED] will further broaden our shareholder base andprovide us with the flexibility to adjust our capital structure from time to time, through accessing awider spectrum of fund raising method, including debt and equity raising, and negotiating morefavourable terms of financing from financial institutions, which in turn will enable us to better withstandexternal risks and market fluctuations.

In addition, as a publicly listed company on a major stock exchange, this position is expected tostrengthen our corporate profile, our brand and reputation, which would enhance our competitiveness inHong Kong’s medical industry. It would also help us improve our corporate governance because we willbe subject to ongoing regulatory compliance requirements and supervision by the regulatory bodies. Itcan also help us to attract and retain quality doctors to support our future business development.

FUTURE PLANS

Please see the section headed ‘‘Business — Opportunities and Strategies’’ for a detailed descriptionof our future plans and strategies.

[REDACTED]

The aggregate [REDACTED] that we expect to receive from the [REDACTED] will beapproximately HK$[REDACTED] million (assuming an [REDACTED] of HK$[REDACTED] per[REDACTED], being the mid-point of the indicative [REDACTED] range of HK$[REDACTED] toHK$[REDACTED] per Share), after deducting [REDACTED] fees and estimated expenses payable by usin connection with the [REDACTED] and assuming the [REDACTED] is not exercised. We currentlyintend to use such [REDACTED] for the following purposes:

1. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for theestablishment of an integrated diagnostic centre (‘‘Integrated Diagnostic Centre’’),including (i) the repayment of the mortgage loan relating to the Property Purchase, (ii) thepurchase of new equipment, and (iii) the hiring of a few doctors and other necessary supportstaff to operate this centre. In particular, we intend to use:

. Approximately [REDACTED]%, or HK$[REDACTED] million, to repay the MortgageLoan. We expect to repay the Mortgage Loan after the prepayment penalty period isover (around April 2023).

On 31 March 2021, we purchased from an Independent Third Party the entire 6th floorof Euro Trade Centre, Central, Hong Kong with GFA of approximately 5,200 sq. ft. at apurchase price of HK$150.0 million, which will be used as our Integrated DiagnosticCentre (the ‘‘Property Purchase’’).

FUTURE PLANS AND [REDACTED]

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We were also responsible for paying for our portion of real estate commission of

HK$1.5 million and estimated Hong Kong stamp duties of HK$12.8 million, and

collectively with the HK$150.0 million purchase price, the total cost of the Property

Purchase amounted to around HK$164.4 million. We partly financed the Property

Purchase through obtaining a mortgage loan of HK$75.0 million (the ‘‘MortgageLoan’’). Please see the section headed ‘‘Financial Information — Indebtedness — Bank

Borrowings’’ for further details on the Mortgage Loan.

Once the Integrated Diagnostic Centre is established and ready for use, we plan to

obtain the necessary day procedure centre licence and move our entire MRI Centre

(which is located at Unit 703 Euro Trade Centre in Central) and move most of our

Imaging and Cardiovascular Centre on the 5th floor, Central Building to the newly

developed Integrated Diagnostic Centre.

We believe acquiring our own property will help us better optimise the use of existing

office space as we grow, and alleviate our reliance and risks associated with rental of

properties and business disruption in the longer term. Reasons for acquiring our own

property include:

(i) the MRI and CT Scan machines are large, heavy and high-value equipment that

would be costly and difficult to relocate;

(ii) only a limited number of office buildings in Central have the necessary loading

capacity and elevator access suitable for us to locate our MRI and CT Scan

machines, and such locations may not be readily available if and when we need to

relocate;

(iii) any relocation would require us to expend considerable time, effort and expense

for renovation; and the costs associated with and the risk of damage of moving

such equipment may be significant or unfeasible;

(iv) owning our property provides us with a stable place to conduct and build our

business and saves us from relocation, renovation and business interruption costs,

which is expected to lower our cost of operations in the long-term;

(v) based on data from the Rating and Valuation Department of the HKSAR

Government, the market price of Grade A and B offices in the Central district,

Hong Kong increased at a CAGR of 8.0% and 8.3%, respectively, over the years

from 2000 to 2020. Our Directors believe that the purchase of a property for our

Integrated Diagnostic Centre is commercially beneficially to us because of rental

savings and that the property will retain its value in the long-term; and

(vi) we estimate our rental recovery period for the purchase of the Integrated

Diagnostic Centre (i.e. 6th floor, Euro Trade Centre, Central, Hong Kong) to be

approximately 24 years, which is calculated by dividing the total cost of

HK$164.4 million (including the purchase price of HK$150.0 million, real estate

agent fees of HK$1.5 million and stamp duties of HK$12.8 million and transaction

cost of HK$0.1 million) by existing rental expenses of around HK$4.6 million per

year (for our Imaging and Cardiovascular Centre and MRI Centre) with an

estimated annual increase in rental expenses of 5.31% after the first three years for


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each six-year office lease term. The estimated annual increase of 5.31% is based

on data from the Rating and Valuation Department of the HKSAR Government for

rental offices in the Central district over the years from 2000 to 2020. The normal

office lease in Hong Kong provides for a three year fixed term plus a three year

flexible term during which rental adjustments are allowed.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to renovate and

purchase equipment for the Integrated Diagnostic Centre. In particular: (i)

HK$[REDACTED] million will be used for renovations and the Integrated Diagnostic

Centre is expected to ready for move-in by around July 2022 and (ii)

HK$[REDACTED] million will be used to purchase new equipment.

The new equipment we plan to purchase for the Integrated Diagnostic Centre includes

one new MRI machine, one new CT Scan machine, one new mammography machine,

one new ultrasound machine and one new DEXA scanner, with an expected unit cost of

HK$[REDACTED] million, HK$[REDACTED] million, HK$[REDACTED] million,

HK$[REDACTED] million and HK$[REDACTED] million, respectively. Such

machines are expected to have a useful life for depreciation purposes of five years. We

expect the payback period for the new MRI machine to be 3.4 years and for the new CT

Scan machine to be 2.7 years.

We plan to eventually replace our existing MRI machine as it does not have the latest

technological features and is becoming more expensive to maintain. Our existing MRI

machine had an expected useful life for depreciation purpose of five years, currently has

an age of approximately five years, and has been 100% depreciated under the straight-

line method as at 31 March 2021. Hong Kong Imaging incurred total costs of HK$2.2

million up to 31 March 2021 to maintain the MRI machine, and we expect to replace

this machine by around July 2022.

Our existing CT Scan machine is owned and has been fully paid-off. We plan to

eventually replace our CT Scan machine because it does not have the latest

technological features and is becoming more expensive to maintain. Our existing CT

Scan machine had an expected useful life for depreciation purposes of five years,

currently has an age of approximately five years, and has been 100% depreciated under

the straight-line method as at 31 March 2021. Hong Kong Imaging incurred total costs

of HK$2.3 million up to 31 March 2021 to maintain the CT Scan machine. We expect

to purchase the new CT Scan machine around July 2022.

We plan to purchase a new mammography machine and DEXA scanner because our

doctors would like to apply updated technology to facilitate more precise diagnosis and

treatment of patients, and cope with increased demand when we expand our scale of

operations.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to hire full-time

employees including two new employee doctors on a part-time basis, such as

radiologists for diagnosis and reporting purposes. We are in need of hiring these new

employees as we plan to expand our scale and services to attract new clients for our

health check and medical concierge services. Such amount represents approximately 18

months of wages and salaries for these employees to ensure we have sufficient funding


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for the start-up of the Integrated Diagnostic Centre. The average salaries for each of

these doctors are expected to be around HK$2.2 million per year. The recruitment

criteria for these doctors include mainly hiring consultants with six to eight years of

post specialist experience and an established patient pool and clinic income of over

three years of private practice. We plan to hire such doctors by around July 2022.


– 228.1 –


. Approximately [REDACTED]%, or HK$[REDACTED] million, to hire threeradiographers, two nurses and seven healthcare assistants and receptionists to supportour new operations. Such amount represents around 18 months of wages and salariesfor these employees to ensure we have sufficient support for the Integrated DiagnosticCentre. The average salaries for each of the radiographers, nurses, and healthcareassistants and receptionists are expected to be around HK$0.5 million, HK$0.5 millionand HK$0.3 million per year, respectively.

The recruitment criteria for the radiographers include registration with the Hong KongRadiographers Board and relevant work experience; and the criteria for the nursesinclude registration with Hong Kong Nursing Council, with valid practising certificate;and the criteria for the healthcare assistants include relevant experience. We plan to hiresuch personnel at the same time as hiring the doctors. We expect to have one nurse andone to two healthcare assistants supporting each of our radiologists or radiographers atthe Integrated Diagnostic Centre with the remainders being shared receptionists.

Based on our forecasts, the new Integrated Diagnostic Centre is expected to require aninvestment amount of HK$[REDACTED] million with a payback period of six years andpositive cash flows starting the year ending 31 March 2028. This takes into account therenovation costs of approximately HK$[REDACTED] million and new machinery andequipment of approximately HK$[REDACTED] million as disclosed above as well as on-going operational expenses, but excludes the Property Purchase. We have excluded the costof the Property Purchase in the forecast because the property is a capital asset and its value isexpected to remain stable in the long-term. Other key assumptions in the forecast include: (i)the new Integrated Diagnostic Centre will commence operations in July 2022, (ii) the new CTScan machine and MRI machine will be purchased in July 2022, (iii) two new doctors, threenew radiographers, two nurses and seven healthcare assistants and receptionists will be hiredas disclosed above, (iv) revenue generated from cases for ultrasound, x-ray, mammographywill be considered part of the new Integrated Diagnostic Centre starting around July 2022 forFY2023 revenue, (v) revenue from cases for MRI and CT scans will be considered part of thenew Integrated Diagnostic Centre starting from July 2022 for FY2023 revenue, (vi) therevenue growth rate will be 10% per year from FY2024 to FY2028, (vii) the inflation ratewill be 3.5% per year, (viii) patient visits will increase by 12% to 20% from FY2021 toFY2023 (as the case may be), (ix) average revenue per visit in FY2022 is the same as inFY2021, and (x) the average revenue per visit will increase by 3.5% for the old CT Scan andMRI machines, and by 10% for the new CT Scan and MRI machines in FY2023 againstFY2022.

2. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used to repay bankloans to replenish and restore the Group’s cash resources used for or associated with theProperty Purchase. We have obtained a revolving loan facility of HK$30.0 million and willobtain a overdraft facility of HK$60.0 million and will draw-down a total of HK$50.0 millionprior to the [REDACTED] (together, the ‘‘Bank Loans’’). Please see the section headed‘‘Financial Information — Indebtedness — Bank Borrowings’’ for details. As of the LatestPracticable Date, the economic environment in Hong Kong remains uncertain due to theCOVID-19 outbreak and bank interest rates are expected to remain low in the near future andaccordingly, we believe it is in the best interest of the Group and its shareholders that weobtain the Bank Loans to ensure we have sufficient liquidity, since it is uncertain whetherour expected [REDACTED] timetable may be delayed and/or may not be materialised. TheCompany expects to repay the Bank Overdraft of HK$20.0 million by around December 2022and the Revolving Loan of HK$30.0 million by around December 2022 using the[REDACTED] from the [REDACTED].


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3. [Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for the further

development of a main integrated medical centre (‘‘Integrated Flagship Medical Centre’’).On 1 February 2021, we started a new lease agreement for the entire 9th floor of Central

Building, with GFA of approximate 16,282 sq. ft., for a term of six years. We have moved

certain of our medical centres to this Integrated Flagship Medical Centre after renovation, in

June 2021, to support our expansion as well as to consolidate and better optimise the use of

existing office space, particularly HKMC I, HKMC III and the HKMC Paediatric Centre,

which were located on the 8th and 5th floors of the same building, as well as the HKMC

Geriatric Medicine Centre, which was located at another building in Central, Hong Kong. As

such, we intend to use:

. Approximately [REDACTED]%, or HK$[REDACTED] million, for rental payments and

related management fees associated with leasing the Integrated Flagship Medical

Centre. This amount covers around 18 months of rental and management fee payments

to help ensure we have sufficient funding for the start up of this new medical centre.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to hire five employee

doctors including but not limited to specialities related to oncology, respiratory

medicine, cardiology, neurology and paediatrics. Such amount represents approximately

18 months of wages and salaries for these employees to ensure we have sufficient

funding for the start-up of the Integrated Flagship Medical Centre. The average salaries

for each of these doctors is expected to be around HK$2.2 million per year. The

recruitment criteria for these doctors include mainly hiring consultants with six to eight

years of post specialist experience and an established patient pool and clinic income of

over three years of private practice. We plan to hire such doctors in FY2022 and

FY2023.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to hire five healthcare

assistants and/or receptionists to support the newly hired employee doctors. Such

amount represents approximately 18 months of wages and salaries for these employees

to ensure we have sufficient funding for the start-up of the Integrated Flagship Medical

Centre. The average salaries for each of the healthcare assistants are expected to be

around HK$0.3 million per year. The recruitment criteria for these individuals mainly

include having relevant clinical operational experience. We plan to hire such personnel

at the same time as the doctors mentioned above. We expect to have one to two

healthcare assistants to support each of our doctors, with the remainders being shared

receptionists.

4. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for the

establishment of a new oncology centre under our brand (‘‘HKMC Oncology Centre’’). We

plan to hire a couple of new doctors and several support staff, and enter into a new lease


– 230 –


agreement with GFA of approximately 5,000 sq. ft. in Central, Hong Kong to establish the

HKMC Oncology Centre. We also plan to move HKMC II to the HKMC Oncology Centre

when it is ready. As such, we intend to use:


related management fees associated with leasing a property for the HKMC Oncology


to help ensure we have sufficient funding for the starting up this new medical centre.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to renovate the newly

leased HKMC Oncology Centre. We expect the HKMC Oncology Centre to be ready

for move-in by around December 2022.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to purchase new

equipment, including IT and network equipment and special medical equipment for

oncology patients. The expected useful life of such equipment is five years.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to hire two additional

employee doctors specialising in oncology to start our operations. Such amount

represents around 18 months of wages and salaries for these employees to ensure we

have sufficient funding for the start-up of the HKMC Oncology Centre. The average

salaries for each of these doctors are expected to be around HK$2.2 million per year.

The recruitment criteria for these doctors mainly include hiring consultants with six to

eight years of post specialist experience and an established patient pool and clinic

income of over three years of private practice. We plan to hire these doctors by around

December 2022.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to hire three nurses and

three healthcare assistants and/or receptionists to support the employee doctors. Such

amount represents around 18 months of wages and salaries for these employees to

ensure we have sufficient funding for the start-up of the HKMC Oncology Centre. The

average salaries for each of the nurses are expected to be around HK$0.5 million per

year and for each of the healthcare assistants and receptionists is expected to be HK$0.3

million per year. The recruitment criteria for nurses mainly include registration with the

Hong Kong Nursing Council with valid practising certificate; and the criteria for the

healthcare assistants mainly include having relevant clinical operational experience. We

plan to hire such personnel at the same time we have recruited the doctors mentioned

above. We expect to have one nurse and one healthcare assistant to support each of our

oncologists.

5. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for the

establishment of a new dental centre under our brand (‘‘HKMC Dental Centre’’). We plan

to hire a couple of new dentists and several support staff, and enter into a new lease

agreement with GFA of approximately 1,500 sq. ft. in Central, Hong Kong to establish the

HKMC Dental Centre. As such, we intend to use:


related management fees associated with leasing a property for the HKMC Dental


to help ensure we have sufficient funding for the starting up this new medical centre.


– 231 –


. Approximately [REDACTED]%, or HK$[REDACTED] million, to renovate the newlyleased HKMC Dental Centre. We expect the HKMC Dental Centre will be ready formove-in by around July 2023.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to purchase newequipment, including a SINIUS Dental unit, and IT network and hardware. Theexpected life of such equipment is five years.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to hire two dentists asemployee doctors to start our operations. Such amount represents around 18 months ofwages and salaries for these employees to ensure we have sufficient funding for thestart-up of the HKMC Dental Centre. The average salaries for each of these doctors areexpected to be around HK$2.2 million per year. The recruitment criteria for thesedoctors mainly include hiring dentists with six to eight years of experience with anestablished patient pool and clinic income of over three years of practice. We plan tohire such dentists by around July 2023.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to hire three nurses orhygienists and two healthcare assistants and/or receptionists to support the dentists.Such amount represents around 18 months of wages and salaries for these employees toensure we have sufficient funding for the start-up of the HKMC Dental Centre. Theaverage salaries for each of the nurses or hygienists are expected to be around HK$0.5million per year and for the healthcare assistants are expected to be around HK$0.3million per year. The recruitment criteria for these individuals mainly includeregistration with Hong Kong Nursing Council, with relevant certifications andexperience. We plan to hire such personnel around the same time as the doctorsmentioned above. We expect to have one nurse or hygienist, and one healthcareassistant to support each of our dentists.

6. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for theestablishment of a new dermatology centre under our brand (‘‘HKMC SKIN Centre’’). Weplan to hire a few dermatologists and several support staff, and enter into a new leaseagreement with GFA of approximately 1,500 sq. ft. in Admiralty or Central, Hong Kong toestablish the HKMC SKIN Centre. As such, we intend to use:

. Approximately [REDACTED]%, or HK$[REDACTED] million, for rental payments andrelated management fees associated with leasing the HKMC SKIN Centre. This amountcovers around 18 months of rental and management fee payments to help ensure wehave sufficient funding for the starting up this new medical centre.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to renovate the newlyleased HKMC SKIN Centre. We expect the HKMC SKIN Centre to be ready for move-in by around September 2022.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to purchase newequipment, including facial treatment machines such as one Thermage, one FotonaDynamis, one Pico laser, one Pulsed Dye Laser and other related machines andequipment. The expected useful life of the facial treatment machines is five years.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to hire three employeedoctors specialising in dermatology start our operations. Such amount represents around


– 232 –


18 months of wages and salaries for these employees to ensure we have sufficient

funding for the start-up of the HKMC SKIN Centre. The average salaries for each of

these doctors are expected to be around HK$2.2 million per year. The recruitment

criteria for these doctors mainly include hiring consultants with six to eight years of

post specialist experience and an established patient pool and clinic income of over

three years of private practice. We plan to hire these doctors by September 2022.

. Approximately [REDACTED]%, or HK$[REDACTED] million, to hire six healthcare

assistants and/or receptionists to support the employee doctors. Such amount represents

around 18 months of wages and salaries for these employees to ensure we have

sufficient funding for the start-up of the HKMC SKIN Centre. The average salaries for

each of the healthcare assistants or receptionists are expected to be HK$0.2 million per

year. The recruitment criteria for healthcare assistants mainly include those with

relevant experience. We plan to hire such personnel around the same time as the doctors

mentioned above. We expect to have one healthcare assistant support each of our

dermatologists with the remainder being shared receptionists.

7. Approximately [REDACTED]%, or HK$[REDACTED] million, will be used for working

capital and general corporate purpose. We expect to have increasing needs of working capital

as a result of the rapid and organic expansion of our business and diversifying service

offerings along with any investment or acquisition if and when suitable opportunities arise.

If the [REDACTED] is set at the high end or low end of the indicative [REDACTED] range,

the estimated [REDACTED] from the [REDACTED], assuming that the [REDACTED] is not

exercised, will increase to approximately HK$[REDACTED] million or decrease to approximately

HK$[REDACTED] million, respectively. In such event, we will adjust the intended use of the

[REDACTED] for the above purposes on a pro-rata basis.

If the [REDACTED] is exercised in full, the estimated [REDACTED] from the

[REDACTED] will increase to approximately HK$[REDACTED] million, assuming an

[REDACTED] of HK$[REDACTED] per Share, being the mid-point of the indicative

[REDACTED]. If the [REDACTED] is set at the high-end or low-end of the indicative

[REDACTED], the estimated [REDACTED] from the [REDACTED], including the [REDACTED]

from the exercise of the [REDACTED], will increase to approximately HK$[REDACTED] million

or decrease to approximately HK$[REDACTED] million, respectively. In each of these events, we

will adjust the intended use of the [REDACTED] for the above purposes on a pro-rata basis.

To the extent that the [REDACTED] from the [REDACTED] are not sufficient to fund the

purposes as set out above, we intend to fund the balance through a variety of means, including

cash generated from operations, bank loans and other borrowings, as appropriate. Should our

Directors decide to re-allocate the intended [REDACTED] to other business plans and/or new

projects of our Group to a material extent and/or there is any material modification to the

[REDACTED] as described above, we will make appropriate announcement(s) in due course.

To the extent that the [REDACTED] of the [REDACTED] are not immediately required for

the above purposes and to the extent permitted by applicable laws and regulations, we intend to

place the [REDACTED] on short-term demand deposit with licensed banks or other financial

institutions in Hong Kong.


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Staffing at our Medical Centres and Diagnostic Centres

As disclosed above, we have relocated HKMC I, HKMC III, HKMC Paediatric Centre and HKMC

Geriatric Medicine Centre to the Integrated Flagship Medical Centre, and we plan to relocate (i) the

Imaging and Cardiovascular Centre and MRI Centre to the Integrated Diagnostic Centre upon

establishment and (ii) HKMC II to the HKMC Oncology Centre upon expiry of its current lease.

The following table provides a summary of our personnel at our Medical Centres and Diagnostic

Centres as at 30 September 2021:

IntegratedFlagshipMedicalCentre HKMC II


Imaging &CardiovascularCentre, MRICentre andMedical

LaboratoryCentre

Number of personnel as at 30 September 2021:— Specialist doctors 20 1 3 2

— Medical and support staff(1) 46 10 2 16

Ratio of medical and support staff to specialistdoctors as at 30 September 2021 2.3 10 0.7 8

The following table provides a summary of the expected number of new personnel to be hired

using the [REDACTED] from the [REDACTED] at our recently opened or new medical centres:

IntegratedDiagnosticCentre

IntegratedFlagshipMedicalCentre

HKMCOncologyCentre

HKMCDentalCentre

HKMCSKIN Centre

Expected number of new personnel:— Specialist doctors 2 5 2 2 3

— Medical and support staff(1) 12 5 6 5 6


– 234 –


The following table provides a summary of the expected combined number of existing and new

personnel to be hired at our Integrated Diagnostic Centre and various medical centres after the

relocation:

IntegratedDiagnosticCentre(3)

IntegratedFlagshipMedicalCentre(4)

HKMCOncologyCentre

HKMCDentalCentre

HKMCSKINCentre


Expected number of personnel:— Specialist doctors 4 25 4 5 3 3

— Medical and support staff(1) 28 47 18 8 6 2

Expected ratio of medical and supportstaff to specialist doctors(2) 7(3) 1.9 4.5 1.6 2.0 0.7

Notes:

(1) Includes nurses, healthcare assistants, other clinical support staff, pharmacists and dispensers.

(2) The size of and personnel at each Medical Centre differs because the number of medical and support staff necessary

to manage each Medical Centre varies and the number of assistants needed to support each doctor varies with his/herspecialty and size of medical practice.

(3) We expect the ratio of medical and support staff to be higher at our Integrated Diagnostic Centre as our diagnosticequipment are mostly operated by support staff such as radiographers and nurses. The increase also reflects theadditional equipment and larger space at the Integrated Diagnostic Centre.

(4) The Integrated Flagship Medical Centre is expected to have a GFA of 226.1 sq.ft. per person (calculated by dividing

GFA 16,282 sq.ft. by an aggregate of 72 doctors and support staff) as compared to a GFA of 110.9 sq.ft. peremployee (calculated by dividing GFA 6,545 sq.ft. by an aggregate of 59 doctors and support staff) at HKMC I,HKMC III, HKMC Pediatric Centre and HKMC Geriatric Medicine Centre as of 30 September 2021. This increase ismainly due to (i) larger waiting areas for patients, (ii) a larger reception area, (iii) additional consultation rooms for

new doctors and the move of our existing oncologist doctors located at HKMC II to the Integrated Flagship MedicalCentre, (iv) additional nurse stations and treatment rooms, (v) significant increase in corridor space due to thedifferent layout and floor plans because the Company has taken-up the entire 9th floor of Central Building, and (vi)

additional space in the layout and design for infection control in order to reduce infection risks of contagiousdiseases such as influenza and COVID-19. The Company believes the additional space is necessary for its operationsas it expects more patients and referrals as it grows and hires more doctors.


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The following is the text of a report set out on pages I-1 to I-2.1, received from the Company’s

reporting accountant, [PricewaterhouseCoopers], Certified Public Accountants, Hong Kong, for the

purpose of incorporation in this document. It is prepared and addressed to the directors of the

Company and to the Sponsor pursuant to the requirements of HKSIR 200 Accountants’ Reports on

Historical Financial Information in Investment Circulars issued by the Hong Kong Institute of Certified

Public Accountants.

[Letterhead of PricewaterhouseCoopers]

[DRAFT]

ACCOUNTANT’S REPORT ON HISTORICAL FINANCIAL INFORMATION TO THEDIRECTORS OF HONG KONG MEDICAL CONSULTANTS HOLDINGS LIMITED ANDCHINA INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LIMITED

Introduction

We report on the historical financial information of Hong Kong Medical Consultants Holdings

Limited (the ‘‘Company’’) and its subsidiaries (together, the ‘‘Group’’) set out on pages I-3 to I-62,

which comprises the consolidated statements of financial position as at 31 March 2019, 2020 and 2021

and 30 September 2021, the statements of financial position of the Company as at 31 March 2021 and

30 September 2021, the consolidated statements of comprehensive income, the consolidated statements

of changes in equity and the consolidated statements of cash flows for each of the years ended 31 March

2019, 2020 and 2021 and the six months ended 30 September 2021 (the ‘‘Track Record Period’’) and a

summary of significant accounting policies and other explanatory information (together, the ‘‘Historical

Financial Information’’). The Historical Financial Information set out on pages I-3 to I-62 forms an

integral part of this report, which has been prepared for inclusion in the document of the Company dated

[Date] (the ‘‘Document’’) in connection with the initial [REDACTED] of shares of the Company on the

Main Board of The Stock Exchange of Hong Kong Limited.

Directors’ responsibility for the Historical Financial Information

The directors of the Company are responsible for the preparation of the Historical Financial

Information that gives a true and fair view in accordance with the basis of presentation and preparation

set out in Notes 1.3 and 2.1 to the Historical Financial Information, and for such internal control as the

directors determine is necessary to enable the preparation of the Historical Financial Information that is

free from material misstatement, whether due to fraud or error.

Reporting accountant’s responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report

our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment

Circular Reporting Engagements 200, Accountants’ Reports on Historical Financial Information in

Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (‘‘HKICPA’’).

This standard requires that we comply with ethical standards and plan and perform our work to obtain

reasonable assurance about whether the Historical Financial Information is free from material

misstatement.

Our work involved performing procedures to obtain evidence about the amounts and disclosures in

the Historical Financial Information. The procedures selected depend on the reporting accountant’s

judgement, including the assessment of risks of material misstatement of the Historical Financial

APPENDIX I ACCOUNTANT’S REPORT

– I-1 –


Information, whether due to fraud or error. In making those risk assessments, the reporting accountant

considers internal control relevant to the entity’s preparation of Historical Financial Information that

gives a true and fair view in accordance with the basis of presentation and preparation set out in Notes

1.3 and 2.1 to the Historical Financial Information in order to design procedures that are appropriate in

the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s

internal control. Our work also included evaluating the appropriateness of accounting policies used and

the reasonableness of accounting estimates made by the directors, as well as evaluating the overall

presentation of the Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for

our opinion.

Opinion

In our opinion, the Historical Financial Information gives, for the purposes of the accountant’s

report, a true and fair view of the financial position of the Company as at 31 March 2021 and 30

September 2021, the consolidated financial position of the Group as at 31 March 2019, 2020 and 2021

and 30 September 2021 and of its consolidated financial performance and its consolidated cash flows of

the Group for the Track Record Period in accordance with the basis of presentation and preparation set

out in Notes 1.3 and 2.1 to the Historical Financial Information.

Review of stub period comparative financial information

We have reviewed the stub period comparative financial information of the Group which comprises

the consolidated statement of comprehensive income, the consolidated statement of changes in equity

and the consolidated statement of cash flows for the six months ended 30 September 2020 and other

explanatory information (the ‘‘Stub Period Comparative Financial Information’’). The directors of the

Company are responsible for the presentation and preparation of the Stub Period Comparative Financial

Information in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to

the Historical Financial Information. Our responsibility is to express a conclusion on the Stub Period

Comparative Financial Information based on our review. We conducted our review in accordance with

Hong Kong Standard on Review Engagements 2410, Review of Interim Financial Information Performed

by the Independent Auditor of the Entity issued by the HKICPA. A review consists of making inquiries,

primarily of persons responsible for financial and accounting matters, and applying analytical and other

review procedures. A review is substantially less in scope than an audit conducted in accordance with

Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we

would become aware of all significant matters that might be identified in an audit. Accordingly, we do

not express an audit opinion. Based on our review, nothing has come to our attention that causes us to

believe that the Stub Period Comparative Financial Information, for the purposes of the accountant’s

report, is not prepared, in all material respects, in accordance with the basis of presentation and

preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information.

Report on matters under the Rules Governing the Listing of Securities on The Stock Exchange ofHong Kong Limited (the ‘‘Listing Rules’’) and the Companies (Winding Up and MiscellaneousProvisions) Ordinance

Adjustments

In preparing the Historical Financial Information, no adjustments to the Underlying Financial

Statements as defined on page I-3 have been made.


– I-2 –


Dividends

We refer to Note 22 to the Historical Financial Information which states that no dividends have

been paid by the Company in respect of the Track Record Period.

No statutory financial statements for the Company

No statutory financial statements have been prepared for the Company since its date of

incorporation.

[PricewaterhouseCoopers]Certified Public Accountants

Hong Kong

[Date]


– I-2.1 –


I HISTORICAL FINANCIAL INFORMATION OF THE GROUP

Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of thisaccountant’s report.

The consolidated financial statements of the Group for the Track Record Period, on which theHistorical Financial Information is based, were audited by PricewaterhouseCoopers in accordance withHong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants(‘‘HKICPA’’) (the ‘‘Underlying Financial Statements’’).

The Historical Financial Information is presented in Hong Kong dollars (‘‘HK$’’) and all valuesare rounded to the nearest thousand (‘‘HK$’000’’) except when otherwise indicated.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year ended 31 MarchSix months ended 30

September

2019 2020 2021 2020 2021

Note HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Revenue 5(a) 195,660 248,394 251,434 121,264 166,000

Cost of sales 6 (111,145) (172,814) (185,504) (86,731) (125,998)

Gross profit 84,515 75,580 65,930 34,533 40,002

Other losses — — — — (963)Selling and marketing expenses 6 (913) (1,212) (2,328) (1,431) (746)Administrative expenses 6 (6,747) (16,421) (36,371) (16,489) (15,339)(Provision)/reversal of provision for

impairment losses on financialassets 3.1(b)(ii) (4,622) (150) (200) — 55

Operating profit 72,233 57,797 27,031 16,613 23,009Finance income 35 2,436 1,199 815 40Finance costs (649) (1,051) (1,441) (461) (2,765)

Finance (costs)/income, net 7 (614) 1,385 (242) 354 (2,725)


Income tax expenses 9 (11,659) (9,489) (6,396) (3,687) (4,630)

Profit and total comprehensiveincome for the year/period 59,960 49,693 20,393 13,280 15,654

Profit/(loss) attributable to:Owners of the Company 59,960 50,194 21,643 13,869 15,270Non-controlling interests — (501) (1,250) (589) 384

59,960 49,693 20,393 13,280 15,654

Earnings per share for profitattributable to owners of theCompany (express in HK$ pershare)

Basic and diluted 10 55.86 46.77 20.16 12.92 14.23


– I-3 –


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at 31 MarchAs at 30

September

2019 2020 2021 2021

Note HK$’000 HK$’000 HK$’000 HK$’000

ASSETSNon-current assetsProperty, plant and equipment 11 7,654 11,571 36,057 55,528Right-of-use assets 12 16,936 23,237 225,835 214,350Intangible assets 13 — 17,862 17,817 17,794Deposits and prepayments 15 2,055 2,591 15,822 6,227Deferred tax assets 16 812 1,505 2,731 2,071

27,457 56,766 298,262 295,970

Current assetsInventories 17 7,935 10,112 12,351 10,860Trade receivables 18 16,099 16,107 19,108 19,693Other receivables, deposits and

prepayments 15 847 5,852 10,347 12,238Amounts due from shareholders 19 137,143 36,116 4,145 5,199Amounts due from directors 34 27,130 51,535 1,600 2,361Amount due from the ultimate

holding company 34 20 36 4 5Amount due from the immediate

holding company 34 10 18 — —

Income tax recoverable — 336 849 128Cash and cash equivalents 20 39,771 159,860 95,267 112,645

228,955 279,972 143,671 163,129

Total assets 256,412 336,738 441,933 459,099

EQUITYCapital and reserves attributable

to equity holders of theCompany

Share capital 21 — — — —

Reserves 23 134,648 145,165 206,346 208,208Retained earnings 23 81,305 64,779 26,422 41,692

215,953 209,944 232,768 249,900Non-controlling interests — 4,512 3,262 3,646

Total equity 215,953 214,456 236,030 253,546


– I-4 –


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED)

As at 31 MarchAs at

30 September

2019 2020 2021 2021

Note HK$’000 HK$’000 HK$’000 HK$’000

LIABILITIESNon-current liabilitiesProvision for re-instatement costs 24 1,163 3,059 1,052 2,330

Lease liabilities 25 9,328 7,199 75,541 66,885

Bank borrowings 29 — — — 70,228

Deferred tax liabilities 16 — 34 27 23

10,491 10,292 76,620 139,466

Current liabilitiesTrade payables 26 5,444 6,307 6,111 6,148

Contract liabilities 5(a) 411 431 2,947 375

Accruals and other payables 27 8,081 19,262 25,077 29,757

Lease liabilities 25 7,349 15,327 17,551 19,290

Provision for re-instatement costs 24 — — 2,101 1,007

Amount due to a shareholder 28 279 — — —

Amount due to a related company 34 100 — — —

Dividend payable 22 — 66,720 — —

Bank borrowings 29 — — 75,000 8,199

Current income tax payable 8,304 3,943 496 1,311

29,968 111,990 129,283 66,087

Total liabilities 40,459 122,282 205,903 205,553

Total equity and liabilities 256,412 336,738 441,933 459,099


– I-5 –


STATEMENTS OF FINANCIAL POSITION OF THE COMPANY

As at31 March 2021

As at30 September

2021

Note HK$’000 HK$’000

ASSETSNon-current assetsInvestment in subsidiaries 1.2 240,400 240,400

Current assetsPrepayments 4,548 5,654

Cash and cash equivalents — 543

Total assets 244,948 246,597

EQUITYCapital and reserves attributable to equity holders of the

CompanyShare capital 21 — —

Reserves 23(c) 240,400 240,400

Accumulated losses 23(c) (14,352) (19,023)

Total equity 226,048 221,377

LIABILITIESCurrent liabilitiesAccruals 4,900 7,083

Amount due to a subsidiary 34(c)(ii) 14,000 18,137

Total liabilities 18,900 25,220

Total equity and liabilities 244,948 246,597


– I-6 –


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Attributable to the owners of the Company

ShareCapital(Note 21)

Reserves(Note 23)

Retainedearnings

Totalequity

HK$’000 HK$’000 HK$’000 HK$’000

Balance at 1 April 2018 — 9,648 21,345 30,993

Comprehensive incomeProfit and total comprehensive income

for the year — — 59,960 59,960

Total comprehensive income — — 59,960 59,960

Transactions with ownersCapital contributions from the owners

of the Group on 31 March 2019 — 125,000 — 125,000

Total transactions with owners — 125,000 — 125,000

Balance at 31 March 2019 and1 April 2019 — 134,648 81,305 215,953


– I-7 –


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)



Reserves(Note 23)

Retainedearnings Sub-total

Non-controllinginterests

Totalequity

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Balance at 31 March 2019 and1 April 2019 — 134,648 81,305 215,953 — 215,953

Comprehensive incomeProfit and total comprehensive

income for the year — — 50,194 50,194 (501) 49,693

Total comprehensive income — — 50,194 50,194 (501) 49,693

Transactions with ownersCapital contributions from an owner

of the Group — 5 — 5 — 5Share-based payment expense — 530 — 530 — 530Dividend declared (Note 22) — — (66,720) (66,720) — (66,720)

Total transactions with owners — 535 (66,720) (66,185) — (66,185)

Issuance of shares for businesscombination (Note 32) — 9,982 — 9,982 5,013 14,995

Balance at 31 March 2020 and1 April 2020 — 145,165 64,779 209,944 4,512 214,456


income for the year — — 21,643 21,643 (1,250) 20,393

Total comprehensive income — — 21,643 21,643 (1,250) 20,393

Transactions with ownersShare-based payment expense — 2,963 — 2,963 — 2,963Capital contributions from the owners

of the Group, net of transaction

costs and tax — 58,218 — 58,218 — 58,218Dividend declared (Note 22) — — (60,000) (60,000) — (60,000)

Total transactions with owners — 61,181 (60,000) 1,181 — 1,181



– I-8 –


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)



Reserves(Note 23)

Retainedearnings Sub-total

Non-controllinginterests

Totalequity

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000



income for the period — — 15,270 15,270 384 15,654

Total comprehensive income — — 15,270 15,270 384 15,654

Transactions with ownersShare-based payment expense — 1,862 — 1,862 — 1,862

Total transactions with owners — 1,862 — 1,862 — 1,862

Balance at 30 September 2021 — 208,208 41,692 249,900 3,646 253,546

(Unaudited)Balance at 31 March 2020 and 1

April 2020 — 145,165 64,779 209,944 4,512 214,456


income for the period — — 13,869 13,869 (589) 13,280

Total comprehensive income — — 13,869 13,869 (589) 13,280

Transactions with ownersShare-based payment expense — 845 — 845 — 845Capital contributions from the owners

of the Group, net of transaction

costs and tax — 58,218 — 58,218 — 58,218

Total transactions with owners — 59,063 — 59,063 — 59,063

Balance at 30 September 2020 — 204,228 78,648 282,876 3,923 286,799


– I-8.1 –


CONSOLIDATED STATEMENTS OF CASH FLOWS


2019 2020 2021 2020 2021

Note HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Cash flows from operatingactivities

Cash generated from operations 30(a) 79,154 89,681 55,693 25,521 51,672

Income tax paid (8,260) (15,343) (11,589) (3,057) (2,438)

Net cash generated from operatingactivities 70,894 74,338 44,104 22,464 49,234

Cash flows from investingactivities

Purchases of property, plant andequipment (6,036) (6,814) (30,590) (1,687) (21,887)

Purchase of leasehold land — — (134,373) — —

Payment of re-instatement cost — — — — (1,656)Acquisition of subsidiaries, net of

cash acquired 30(c), 32 — (9,335) — — —

Prepayments for leaseholdimprovements — — (8,256) — —

Prepayment for property, plant andequipment — — (488) — —

Proceeds from disposal of property,plant and equipment 30(d) — — 14 — 14

Interest income received 35 2,436 1,199 815 40Amounts due from directors (17,699) (24,405) (10,516) (9,423) (761)Amounts due from shareholders (10,777) (23,973) 5,207 7,667 (1,054)Amount due from the ultimate

holding company (20) (16) 32 (3) (1)Amount due from the immediate

holding company (10) (8) 18 — —

Net cash used in investing activities (34,507) (62,115) (177,753) (2,631) (25,305)


– I-9 –


CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


2019 2020 2021 2020 2021

Note HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Cash flows from financingactivities

Principal and interest payments oflease liabilities (8,532) (15,438) (16,899) (7,868) (9,107)

Amounts due to shareholders (3,778) (279) — — —

Expenses paid in connection withthe [REDACTED] of new shares — — (3,175) (754) (405)

Dividends paid — — (39,505) (21,978) —

Capital injections from shareholders 1,700 125,005 58,218 58,218 —

Payments of rental deposits (112) (1,422) (4,583) (2,317) —

Refund of rental deposits — — — — 211Proceeds from bank borrowings — — 75,000 — 5,000Repayment of bank borrowings — — — — (1,573)Interest paid — — — — (677)

Net cash (used in)/generated fromfinancing activities (10,722) 107,866 69,056 25,301 (6,551)

Net increase/(decrease) in cashand cash equivalents 25,665 120,089 (64,593) 45,134 17,378

Cash and cash equivalents at thebeginning of the year/period 14,106 39,771 159,860 159,860 95,267

Cash and cash equivalents at theend of the year/period 20 39,771 159,860 95,267 204,994 112,645


– I-9.1 –


II NOTES TO THE HISTORICAL FINANCIAL INFORMATION

1 GENERAL INFORMATION, REORGANISATION AND BASIS OF PRESENTATION

1.1 General information

The Company was incorporated in the Cayman Islands on 21 September 2020 as an exempted company with limitedliability under the Companies Act (Cap. 22, Act 3 of 1961 as consolidated and revised) of the Cayman Islands. The addressof the Company’s registered office is at the office of Conyers Trust Company (Cayman) Limited, Cricket Square, Hutchins

Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

The Company is an investment holding company and its subsidiaries are principally engaged in the provision of

private specialty healthcare services and management services to medical centres (‘‘HKMC Business’’) and imaging anddiagnostic services (‘‘HKID Business’’) in Hong Kong (collectively referred to as the ‘‘[REDACTED] Business’’).

The ultimate holding company of the Company is Central Healthcare Group Limited (‘‘CHG’’), which is owned byDr. Tsang Wah Tak Kenneth (‘‘Dr. Kenneth Tsang’’), Dr. Fong Ka Yeung (‘‘Dr. Jason Fong’’), Dr. Leung Wing Hung (‘‘Dr.

Adam Leung’’), Dr. Tsang Suk Kwan Jenny (‘‘Dr. Jenny Tsang’’), Dr. Chu Leung Wing, Mr. Shiu Shu Ming (‘‘Mr. Shiu’’)and Mrs. Chen Chou Mei Mei Vivien (‘‘Mrs. Chen’’) (collectively referred to as the ‘‘Founding Shareholders’’ and each a‘‘Founding Shareholder’’).

On 23 October 2020, a deed of acting-in-concert was entered into among the Founding Shareholders and theirrespective wholly owned investment holding companies (collectively referred to as the ‘‘Concert Parties’’ and each a

‘‘Concert Party’’) pursuant to which all the Concert Parties confirmed that since the date on which they first becameinterested in the Group, they have been acting, and undertake to continue to act in concert with each other and reachunanimous consensus among themselves regarding all material commercial decisions, including but not limited to financial

and operational matters and strategic decisions of the [REDACTED] Business conducted by CHG and its subsidiaries. Incase unanimous decision cannot be reached, Dr. Kenneth Tsang has the right to make the conclusive decision which shall bebinding on the other Concert Parties.

Accordingly, the ultimate controlling party of the Company is Dr. Kenneth Tsang (the ‘‘Controlling Shareholder’’).

1.2 History and Reorganisation

History

Prior to the incorporation of the Company and the completion of the reorganisation (the ‘‘Reorganisation’’) asdescribed below, the [REDACTED] Business was carried out by Hong Kong Medical Consultants Limited (‘‘HongKong Medical Consultants’’) and its subsidiaries (Hong Kong Brain Memory Centre Limited (‘‘HK Brain Memory’’)

and Central Healthcare Limited (‘‘Central Healthcare Limited’’)) (together referred to as ‘‘Hong Kong MedicalConsultants and its subsidiaries’’), and Hong Kong Imaging and Diagnostic Centre Limited (‘‘HKID Limited’’) andits subsidiaries (together referred to as ‘‘Hong Kong Imaging’’) (collectively referred to as ‘‘Operating Companies’’)

now comprising the Group. Hong Kong Medical Consultants is under the control of the Controlling Shareholderthroughout the Track Record Period. HK Brain Memory, Central Healthcare Limited and Hong Kong Imaging areunder the control of the Controlling Shareholder since the respective dates of acquisition by the Group (Note 30 and

Note 32).

Prior to November 2017, Hong Kong Medical Consultants was principally engaged in the provision of

management services to medical centres in Hong Kong.

In November 2017, the Founding Shareholders, Dr. Lee Pui Yin (‘‘Dr. Clement Lee’’), Dr. Cheng CheungWah Boron (‘‘Dr. Boron Cheng’’), Dr. Ma Tin Wei Ada (‘‘Dr. Ada Ma’’), Dr. Lo Wai Kei (‘‘Dr. Lo Wai Kei’’), andDr. Ng Matthew (‘‘Dr. Matthew Ng’’) (collectively referred to as the ‘‘Equity Partners’’), and Dr. Chau Kwok On,

Gordon (‘‘Dr. Gordon Chau’’), Dr. Ng Wing Ho (‘‘Dr. Kenneth Ng’’) and Dr. Tam Sau Man, Barbara (‘‘Dr. BarbaraTam’’) (collectively referred to as the ‘‘Strategic Shareholders’’) concluded their earlier discussions under theleadership of Dr. Kenneth Tsang and reached a consensus to join the Group as medical specialists or managementpersonnel, to expand the business of Hong Kong Medical Consultants to provide private specialty healthcare service,

and to contribute additional capital to the Group. The roles and responsibilities of each party and their respectivebeneficial interests in the Group were then agreed such that the Group would be owned by the FoundingShareholders as to 83%, the Equity Partners as to 11% and the Strategic Shareholders as to 6% respectively.


– I-10 –


To reflect the consensus reached above, the holding companies of Hong Kong Medical Consultants and its

subsidiaries including CHG, Central Medical Investment Limited (‘‘CMI’’) and Central Medical Holdings Limited(‘‘CMH’’) were incorporated one after another. In November 2017 and thereafter, shares were gradually allotted andissued by these companies to the Founding Shareholders, the Equity Partners and the Strategic Shareholders to

establish their respective beneficial interests in the Group. During the Track Record Period, two OperatingCompanies including HK Brain Memory and Central Healthcare Limited were acquired by Hong Kong MedicalConsultants to conduct the HKMC Business (Note 30(c)).

Pursuant to a shareholders agreement signed on 31 March 2019 among CHG and the intermediate holdingcompanies, the Founding Shareholders, the Equity Partners, the Strategic Shareholders and the new investors namely

Asmex Investment Limited, Pine Treasure Holdings Limited, Joyous Rainbow Holdings Limited, GoldstoneInvestment Capital Limited, Double Expert Limited, Hong Kong Dashenlin Trade and Investment Limited, CheungHing Holdings Limited, Star List Limited and Clear Trillion Limited (collectively referred to as the ‘‘New

Investors’’), 125,000 shares of CMH were issued to the New Investors at HK$1,000 each.

On 30 October 2019, the Group acquired 100% equity interests in Pixel Investments Limited (‘‘Pixel’’) andPegasus Investments Limited (‘‘Pegasus’’), which directly hold 51% and 49% equity interests in HKID Limitedrespectively, which was accounted for as a business combination (Note 33). After the acquisition, the Group alsoindirectly holds 51% equity interests in two HKID Limited’s subsidiaries which, together with HKID Limited,

conduct the HKID Business. Part of the purchase consideration for the business combination was satisfied by theissuance of 9,844 shares of CMH to Dr. Ooi Gaik Cheng, Dr. Liu Chi Leung, Dr. Lau Chu Pak, Mr. Lo Wai Keung,Peter and Ms. Tang Wan Yin.

On 27 August 2020, 49,857 fully paid shares of CMH, representing approximately 4.62% of the total issued

shares of CMH, were allotted and issued at a consideration of HK$60,000,000 to Unicorn Link Group Limited (the‘‘Unicorn’’). On 15 September 2020, Unicorn surrendered 6,925 shares of CMH. As a result, Unicorn held 42,932shares of CMH representing approximately 4.00% of the total issued shares of CMH.

Reorganisation

In preparation for the [REDACTED] of the Company’s shares on the Main Board of The Stock Exchange ofHong Kong Limited (the ‘‘[REDACTED]’’), the Company was incorporated on 21 September 2020 in the Cayman

Islands. On 23 October 2020, the Company acquired the entire equity interests in CMH by issuing 1,073,306ordinary shares of HK$0.00001 each to its then shareholders in the proportion of their respective interests in CMH.The Company then became the holding company of the companies now comprising the Group.

Upon the completion of the Reorganisation and up to the date of this report, the Company has direct andindirect interests in the following subsidiaries:

NamePlace and date of incorporation

and kind of legal entity Particulars of issued and paid up capital as at Effective interest held as atPrincipal activities and

place of operation

31 March 30 September the date ofthis report

31 March 30 September the date ofthis report2019 2020 2021 2021 2019 2020 2021 2021

Direct interest:Central Medical Holdings

Limited (Note a)British Virgin Islands,

2 November 2017,a limited liability company

HK$1,000,000 HK$1,014,919 HK$1,073,307 HK$1,073,307 HK$1,073,307 100% 100% 100% 100% 100% Investment holding, BVI

Indirect interests:Hong Kong Medical

Consultants CompanyLimited (Note b)

Hong Kong,25 October 2013,a limited liability company

HK$100 HK$100 HK$100 HK$100 HK$100 100% 100% 100% 100% 100% Provision of private specialtyhealthcare services andmanagement services tomedical centres in HongKong, HK

CentralPharm CompanyLimited (Note c)

Hong Kong,12 September 2017,a limited liability company

HK$1 HK$1 HK$1 HK$1 HK$1 100% 100% 100% 100% 100% Wholesales of pharmaceuticalproducts, HK

HKMC Dental & MaxillofacialCentre Limited (Note b)

Hong Kong,1 December 2016,a limited liability company

HK$1 HK$1 HK$1 HK$1 HK$1 100% 100% 100% 100% 100% Provision of dental andmaxillofacial services inHong Kong, HK


– I-11 –


NamePlace and date of incorporation

and kind of legal entity Particulars of issued and paid up capital as at Effective interest held as atPrincipal activities and

place of operation

31 March 30 September the date ofthis report

31 March 30 September the date ofthis report2019 2020 2021 2021 2019 2020 2021 2021

Indirect interests:Smart Winner Investments

Limited (‘‘SmartWinner’’) (Note a)

Seychelles,26 July 2019,a limited liability company

N/A US$1 US$1 US$1 US$1 N/A 100% 100% 100% 100% Investment holding, Seychelles

Medical Concierge HoldingLimited (Note a)

British Virgin Islands,20 August 2019,a limited liability company

N/A US$100 US$100 US$100 US$100 N/A 100% 100% 100% 100% Investment holding, BVI

Hong Kong Brain MemoryCentre Limited (Note c)

Hong Kong,18 May 2018,a limited liability company

HK$1 HK$1 HK$1 HK$1 HK$1 100% 100% 100% 100% 100% Provision of private specialtyhealthcare services in HongKong, HK

Central Healthcare Limited(Note b)

Hong Kong,17 August 2017,a limited liability company

HK$1 HK$1 HK$1 HK$1 HK$1 100% 100% 100% 100% 100% Provision of private specialtyhealthcare services in HongKong, HK

Hong Kong Imaging andDiagnostic CentreLimited (Note d)

Hong Kong,11 December 2008,a limited liability company

HK$20,000 HK$20,000 HK$20,000 HK$20,000 HK$20,000 N/A 100% 100$ 100% 100% Imaging and diagnostic service inHong Kong, HK

Hong Kong Imaging andDiagnostic Centre (Lab)Limited (‘‘HKID (Lab)’’)(Note d)

Hong Kong,30 May 2012,a limited liability company

HK$10,000 HK$10,000 HK$10,000 HK$10,000 HK$10,000 N/A 51% 51% 51% 51% Medical laboratory service inHong Kong, HK

Hong Kong Imaging andDiagnostic Centre (MRI)Limited (‘‘HKID(MRI)’’) (Note d)

Hong Kong,24 April 2012,a limited liability company

HK$10,000 HK$10,000 HK$10,000 HK$10,000 HK$10,000 N/A 51% 51% 51% 51% Magnetic resonance imagingservice in Hong Kong, HK

Medical ConciergeManagement Limited(Note a)


N/A US$100 US$100 US$100 US$100 N/A 100% 100% 100% 100% Inactive, BVI

Medical Concierge Limited(Note a)


N/A US$100 US$100 US$100 US$100 N/A 70% 95% 95% 95% Provision of agency services, BVI

HKMC Medical ProductsLimited (Note e)

Hong Kong,1 April 2020,a limited liability company

N/A N/A HK$1 HK$1 HK$1 N/A N/A 100% 100% 100% Investment holding, HK

Ace Alliance Global Limited(Note a)

British Virgin Islands,25 May 2020,a limited liability company

N/A N/A US$1 US$1 US$1 N/A N/A 100% 100% 100% Investment holding, BVI

Notes:

(a) There is no statutory audit requirement in its place of incorporation.

(b) The audited financial statements of the company for the years ended 31 March 2019, 2020 and 2021 were audited byPricewaterhouseCoopers.

(c) The audited financial statements of these companies for the period from the incorporation date to 31 March 2019 and for theyears ended 31 March 2020 and 2021 were audited by PricewaterhouseCoopers.

(d) The audited financial statements of these companies for the year ended 31 March 2019 were audited by James T. W. Kong& Co. and the years ended 31 March 2020 and 2021 were audited by PricewaterhouseCoopers.

(e) The audited financial statements of the company for the period from the incorporation date to 31 March 2021 was auditedby PricewaterhouseCoopers.


– I-12 –


1.3 Basis of presentation

Immediately prior to and after the Reorganisation, the HKMC Business is conducted by Hong Kong Medical

Consultants and its subsidiaries for the Group throughout the Track Record Period which became subsidiaries of theCompany pursuant to the Reorganisation. The Company has not been involved in any business prior to the Reorganisationand do not meet the definition of a business. The Reorganisation is merely a recapitalisation of the Hong Kong Medical

Consultants and its subsidiaries with no change in management of such business and the Controlling Shareholder of theHong Kong Medical Consultants and its subsidiaries remained the same.

The Group resulting from the Reorganisation is regarded as a continuation of the Hong Kong Medical Consultantsand its subsidiaries and, for the purpose of this report, the Historical Financial Information has been prepared such that theincome, expenses, assets and liabilities of the Hong Kong Medical Consultants and its subsidiaries are recognised and

measured at the carrying amounts. Specifically, the financial information of Hong Kong Medical Consultants is included inthe Historical Financial Information using their carrying values for all periods presented.

The financial information of HK Brain Memory, Central Healthcare Limited and HKID Limited is included in theHistorical Financial Information since their respective dates of acquisition (Note 30(c) and 32).

Inter-company transactions and balances and unrealised gains/losses on transactions between companies nowcomprising the Group are eliminated.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the Historical Financial Information are set out below. Thesepolicies have been consistently applied to all the periods presented, unless otherwise stated.

2.1 Basis of preparation

The Historical Financial Information has been prepared in accordance with Hong Kong Financial Reporting Standards(‘‘HKFRS’’) issued by Hong Kong Institute of Certified Public Accountants (the ‘‘HKICPA’’).

The Historical Financial Information has been prepared under the historical cost convention, except that the financial

assets at fair value through profit or loss are stated at fair value.

The preparation of Historical Financial Information in conformity with HKFRS requires the use of certain criticalaccounting estimates. It also requires management of the Group to exercise its judgement in the process of applying theGroup’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptionsand estimates are significant to the Historical Financial Information are disclosed in Note 4.

In preparing the Historical Financial Information, the Group has consistently adopted throughout the Track Record

Period all standards and amendments that were effective for accounting periods beginning on or before 1 October 2021,which include HKFRS 9 ‘‘Financial Instruments’’ (‘‘HKFRS 9’’), HKFRS 15 ‘‘Revenue from contracts with customers’’(‘‘HKFRS 15’’), HKFRS 16 ‘‘Leases’’ (‘‘HKFRS 16’’) and Amendments to HKFRS 16.

The following new standards, amendments to standards, annual improvements, accounting guideline andinterpretation have been published but are not yet effective for the Track Record Period and have not been early adopted

by the Group:

Effective forannual periodsbeginning on

or after

Amendments to HKFRS 3 Reference to the Conceptual Framework 1 January 2022

Amendments to HKAS 16 Proceeds before Intended Use 1 January 2022Amendments to HKAS 37 Cost of Fulfilling a Contract 1 January 2022Annual improvement project Annual Improvements 2018–2020 Cycle 1 January 2022Accounting Guideline 5

(Revised)

Revised Accounting Guideline 5 Merger Accounting for

Common Control Combinations

1 January 2022

HKFRS 17 Insurance Contracts and related Amendments 1 January 2023Amendments to HKFRS 4 Extension of the temporary exemption from applying IFRS 9 1 January 2023


– I-13 –


Effective forannual periodsbeginning on

or after

Amendments to HKAS 1 andHK Interpretation 5(2020)

Classification of Liabilities as Current or Non-current andPresentation of Financial Statements — Classification bythe Borrower of a Term Loan that Contains a Repayment

on Demand Clause

1 January 2023

Amendments to HKAS 1 andHKFRS Practice

Statement 2

Disclosure of Accounting Policies 1 January 2023

Amendments to HKAS 8 Definition of accounting estimates 1 January 2023Amendments to HKAS 12 Deferred Tax related to Assets and Liabilities arising from a

Single Transaction

1 January 2023

Amendments to HKFRS 10and HKAS 28

Sale or Contribution of Assets between an Investor and itsAssociate or Joint Venture

To be determined


– I-13.1 –


The Group will adopt the above new standards, amendments to standards, annual improvements, accounting guideline

and interpretation when they become effective. The Group has commenced an assessment and does not anticipate anysignificant impact on the Group’s financial position and results of operations upon adopting these new standards,amendments to standards, annual improvements, accounting guideline and interpretation.

2.2 Principles of consolidation

(i) Subsidiary

A subsidiary is an entity (including a structured entity) over which the Group has control. The Group controlsan entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has

the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the dateon which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combination by the Group.

Intra-group transactions, balances and unrealised gains on transactions between Group companies areeliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of thetransferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with

the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated

statements of comprehensive income, consolidated statements of changes in equity and consolidated statements offinancial position respectively.

(ii) Changes in ownership interests in subsidiaries without change of control

The Group treats transactions with non-controlling interests that do not result in a loss of control astransactions with equity owners of the Company. A change in ownership results in an adjustment between thecarrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary.

Any difference between the amount of the adjustment to non-controlling interests and any consideration paid orreceived is recognised in a separate reserve within equity attributable to owners of the Company.

When the Group ceases to combine or equity account for an investment because of a loss of control orsignificant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying

amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes ofsubsequent accounting for the retained interest as an associate, joint venture or financial asset. In addition, anyamounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the

Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised inthe other comprehensive income are reclassified to profit or loss or transferred to another category of equity asspecified/permitted by applicable HKFRS.

2.3 Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equityinstruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

. fair values of the assets transferred,

. liabilities incurred to the former owners of the acquired business,

. equity interests issued by the Group,

. fair value of any asset or liability resulting from a contingent consideration arrangement, and

. fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, withlimited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controllinginterest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’sproportionate share of the acquired entity’s net identifiable assets.

Acquisition-related costs are expensed as incurred.


– I-14 –


The excess of the:

. consideration transferred,

. amount of any non-controlling interest in the acquired entity, and

. acquisition-date fair value of any previous equity interest in the acquired entity

over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fairvalue of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a

bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to

their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being therate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are

subsequently remeasured to fair value with changes in fair value recognised in profit or loss.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously heldequity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from suchremeasurement are recognised in profit or loss.

2.4 Separate financial statements

Investments in subsidiaries are accounted for at cost less impairment. Cost includes direct attributable costs ofinvestment. The results of subsidiaries are accounted for by the Company on the basis of dividend received and receivable.

Impairment testing of the investments in subsidiaries is required upon receiving a dividend from these investments ifthe dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is declared or if the

carrying amount of the investment in the separate financial statements exceeds the carrying amount in the consolidatedfinancial statements of the investee’s net assets including goodwill.

2.5 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operationsdecision-maker (‘‘CODM’’). The CODM, who is responsible for allocating resources and assessing performance of theoperating segments, has been identified as the executive directors of the Company (‘‘Executive Directors’’) who make

strategic decisions.

2.6 Foreign currency translation

(a) Functional and presentation currency

Items included in the consolidated financial statements of the Group are measured using the currency of the

primary economic environment in which the entity operates (the ‘‘functional currency’’). The Historical FinancialInformation are presented in HK$, which is the Group’s functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing atthe dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resultingfrom the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and

liabilities denominated in foreign currencies are recognised in profit or loss.

All foreign exchange gains and losses are presented within other gains, net in profit or loss.

2.7 Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and any impairment loss.

Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, onlywhen it is probable that future economic benefits associated with the item will flow to the Group and the cost of the itemcan be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are

charged to profit or loss during the Track Record Period in which they are incurred.


– I-15 –


Depreciation of property, plant and equipment is calculated using the straight-line method to allocate their costs to

their residual values over their estimated useful lives, as follows:

Building 30 yearsMedical equipment 5 yearsLeasehold improvements Shorter of lease term and estimated useful lives up to 6 years

Office furniture and fixtures 5 yearsComputer equipment 3 to 5 yearsMotor vehicles 3 to 4 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reportingperiod.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount isgreater than its estimated recoverable amount (Note 2.9).

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognisedin profit or loss.

2.8 Intangible assets

Goodwill

Goodwill is measured as described in Note 2.3. Goodwill on acquisitions of subsidiaries is included inintangible assets. Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or

changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairmentlosses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entitysold.

Goodwill is allocated to cash-generating units (‘‘CGUs’’) for the purpose of impairment testing. The allocation

is made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which thegoodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored forinternal management purposes, being the group of CGUs comprising Hong Kong Imaging.

Customer relationship

Customer relationships acquired in a business combination are recognised at fair value at the acquisition date.The customer relationships have a finite useful life and are carried at cost less accumulated amortisation.

Amortisation is calculated using the straight-line method to allocate its cost over five years.

2.9 Impairment of non-financial assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested

annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount maynot be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its

recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use.For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiablecash inflows which are largely independent of the cash inflows from other assets or groups of assets. Non-financial assetsthat suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

2.10 Financial instruments

(i) Classification

The Group classifies its financial assets in the following measurement categories:

— those to be measured subsequently at fair value through profit or loss, and

— those to be measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and the contractualterms of the cash flows.


– I-16 –


For assets measured at fair value, gains and losses will be recorded in profit or loss.

The Group reclassifies debt investments when and only when its business model for managing those assets

changes.

(ii) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group

commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows fromthe financial assets have expired or have been transferred and the Group has transferred substantially all the risks andrewards of ownership.

(iii) Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financialasset not carried at fair value through profit or loss (‘‘FVPL’’), transaction costs that are directly attributable to the

acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing the

asset and the cash flow characteristics of the asset. Assets that are held for collection of contractual cash flowswhere those cash flows represent solely payments of principal and interest are measured at amortised cost.Interest income from these financial assets is included in finance income using the effective interest rate

method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented inother gains, net together with foreign exchange gains and losses. Impairment losses are presented as separateline item in profit or loss.

(iv) Impairment

The Group assesses on a forward looking basis the expected credit losses associated with its financial assetscarried at amortised cost. The impairment methodology applied depends on whether there has been a significant

increase in credit risk.

For trade receivables, the Group applies the simplified approach permitted by HKFRS 9, which requiresexpected lifetime losses to be recognised from initial recognition of the receivables. The provision matrix isdetermined based on historical observed default rates over the expected life of the trade receivables with similarcredit risk characteristics and is adjusted for current market condition and forward-looking estimates. At every

reporting date the historical observed default rates are updated and changes in the latest market condition andforward-looking estimates are analysed.

Impairment on other financial assets carried at amortised cost are measured as either 12-month expected creditlosses or lifetime expected credit losses, depending on whether there has been a significant increase in credit risk

since initial recognition. If a significant increase in credit risk of a receivable has occurred since initial recognition,impairment is measured as lifetime expected credit losses.

2.11 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the consolidated statements of financialposition when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a netbasis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on

future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcyof the Group or the counterparty.

2.12 Inventories

Inventories are stated at the lower of cost and net realisable value. Inventories include pharmaceutical goods andsupplies for medical centre operations. Inventory cost in the medical centres is determined using the weighted averagemethod. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling

expenses.


– I-17 –


2.13 Trade and other receivables

Trade receivables are amounts due from customers for pharmaceutical goods sold or services performed in the

ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in the normaloperating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-currentassets.

Trade receivables are recognised initially at the amount of consideration that is unconditional unless they containsignificant financing components, when they are recognised at fair value. Other receivables are recognised initially at fair

value. The Group holds the trade and other receivables with the objective to collect the contractual cash flows and thereforemeasures them subsequently at amortised cost using the effective interest method, less allowance for impairment.

2.14 Contract assets and liabilities

Upon entering into a contract with a customer, the Group obtains rights to receive consideration from customer andassumes performance obligations to transfer goods or services to the customer. The combination of those rights andperformance obligations give rise to a net asset or a net liability depending on the relationship between the remaining rights

and the performance obligations. When either party to a contract has performed its obligation, the Group presents thecontract in the consolidated statements of financial position as a contract asset or a contract liability, depending on therelationship between the entity’s performance and the customer’s payment. A contract asset is the Group’s right to

consideration in exchange for services that the Group has transferred to a customer. A receivable is recognised when theGroup has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time isrequired before the payment of the consideration is due. If a customer pays consideration or the Group has a right to an

amount of consideration that is unconditional before the Group transfers service to the customer, the Group presents thecontract liability when the payment is made by the customer or a receivable is recorded (whichever is earlier).

2.15 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, short-term time deposits, and othershort-term highly liquid investments with original maturities of three months or less, if any.

2.16 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or optionsare shown in equity as a deduction, net of tax, from the proceeds.

2.17 Dividend distribution

Dividend distribution by the companies comprising the Group is recognised as a liability in the Group’s consolidatedfinancial statements in the period in which the dividends are approved by the shareholders or directors of such companies,where appropriate.

2.18 Trade and other payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course ofbusiness from suppliers. Trade and other payables are classified as current liabilities if payment is due within one year or

less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effectiveinterest method.

2.19 Current and deferred income tax

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based onthe applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable totemporary differences and to unused tax losses.

(a) Current income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted atthe end of the reporting period in the countries where the Group operates and generates taxable income. Management

periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation issubject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid tothe tax authorities.


– I-18 –


(b) Deferred income tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between

the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However,the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transactionother than a business combination that at the time of the transaction affects neither accounting nor taxable profit or

loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted bythe end of the reporting period and are expected to apply when the related deferred income tax asset is realised or thedeferred income tax liability is settled.

Deferred income tax assets are recognised only if it is probable that future taxable profit will be available toutilise those temporary differences and losses.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current

tax assets and liabilities and when the deferred income tax balances relate to the same taxation authority. Currentincome tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends eitherto settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred income tax is recognised in profit or loss, except to the extent that it relates to itemsrecognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other

comprehensive income or directly in equity, respectively.

2.20 Employee benefits

(a) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly

within 12 months after the end of the period in which the employees render the related service are recognised inrespect of employees’ services up to the end of the reporting period and are measured at the amounts expected to bepaid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the

consolidated statements of financial position.

(b) Pension obligations

The Group participates in a defined contribution plan in Hong Kong. A defined contribution plan is a pension

plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructiveobligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefitsrelating to employee service in the current and prior periods.

The Group pays contributions to publicly or privately administered pension insurance plans on a mandatory,contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.

The contributions are recognised as employee benefit expense when they are due.

Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the futurepayments is available.

(c) Bonus plans

The expected cost of bonus payments is recognised as a liability and an expense when the Group has a presentlegal or constructive obligation as a result of services rendered by employees and a reliable estimate of the obligationcan be made.

Liabilities for bonus plans are expected to be settled within 12 months and are measured at the amountsexpected to be paid when they are settled.

2.21 Share-based payments

Share-based compensation benefits may be provided to the directors, employees or consultants of the Group via

issuance of shares. Information relating to share issuance is set out in Note 23.

The fair value of shares issued to the directors, employees or consultants by the Company or group companies on

grant date less respective capital contribution is recognised as an expense over the relevant service period pursuant to therespective service agreement. The fair value is measured at the grant date of the shares and is recognised in equity in theshare-based payment reserve over the relevant service period (Note 23(b)).


– I-19 –


Where the service period of the directors, employees or consultants is shortened due to their failure to satisfy the

service conditions, any expenses not yet recognised in relation to such services are expensed off in profit or loss upon thefailure to satisfy the service conditions.

2.22 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, itis probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is

determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of anoutflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle thepresent obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax ratethat reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the

provision due to the passage of time is recognised as interest expense.

2.23 Revenue recognition

(a) Revenue from contracts with customers

Revenue is recognised when or as the control of the goods or services is transferred to the customer.

Depending on the terms of the contracts and the laws that apply to the contract, control of the goods and servicesmay be transferred over time or at a point in time.

Control of the goods or services is transferred over time if the Group’s performance:

. provides all of the benefits received and consumed simultaneously by the customer;

. creates or enhances an asset that the customer controls as the Group performs; or

. does not create an asset with an alternative use to the Group and the Group has an enforceable right topayment for performance completed to date.

If control of the goods or services is transferred over time, revenue is recognised over the period of thecontract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise,revenue is recognised at a point in time when the customer obtains control of the goods or services.

If contracts involve the sale of multiple elements, the transaction price will be allocated to each performance

obligation based on their relative stand-alone selling prices. If the stand-alone selling prices are not directlyobservable, they are estimated based on expected cost plus a margin or adjusted market assessment approach,depending on availability of observable information.

The Group’s revenue is primarily derived from:

. provision of outpatient services at medical centres, including consultation and sales of pharmaceuticalgoods;

. provision of outpatient and inpatient services at hospitals;

. provision of imaging and diagnostic services;

. provision of management services to medical centres;

. wholesales of pharmaceutical goods to private medical practitioners and licensed retailers; and

. provision of COVID-19 vaccination services.

Revenue from the provision of specialty medical services, allied health services and dental and maxillofacialservices at medical centres and hospitals are recognised in the accounting period in which the services are renderedover the period of the time by reference to the progress towards complete satisfaction of the performance obligation.

The progress towards the complete satisfaction of the performance obligation is measured by direct measurement ofthe value of individual service transferred to the customer.


– I-20 –


Revenue from sales and wholesales of pharmaceutical goods is recognised at a point in time when control of

the pharmaceutical goods has been transferred, being when the pharmaceutical goods are despatched to thecustomers, private medical practitioners and licensed retailers, and there is no unfulfilled obligation that could affecttheir acceptance of the pharmaceutical goods.

Revenue from imaging and diagnostic services, of which the Group is entitled to right to payment upon

issuance and passing the imaging and diagnostic reports to customers, are recognised at a point in time.

Revenue from medical centre management services is recognised over time in the accounting period in which

the related services are rendered.

Revenue from the provision of COVID-19 vaccination services is recognised over time by reference to theprogress towards complete satisfaction of the performance obligation.

The Group acts as a principal if it controls a promised good or service before transferring that good or serviceto the customer and reports revenue on the gross inflows of economic benefits. In evaluating whether the Group actsas a principal, the Group considers whether the Group (1) is primarily responsible for fulfilling the promise to

provide the specified good or service; (2) has inventory risk before specified good or service has been transferred toa customer or after the transfer of control to the customer; and (3) has discretion in establishing the price for thespecified good or service. The Group recognises revenue as a principal for all the revenue streams.

The Group would adjust the transaction prices at initial recognition for the time value of money in respect of

its revenue streams if the Group expects that the period between the transfer of the services to customers and thepayment by the customers exceed one year, and vice versa.

(b) Interest income

Interest income is recognised on a time-proportion basis using the effective interest method.

2.24 Leases

The Group leases land, various properties and equipment to operate its business. Both property leases and equipment

leases are typically made for fixed periods of one to six years. Lease terms are negotiated on an individual basis and containvarious terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used assecurity for borrowing purposes.

Leases are recognised as right-of-use assets and the corresponding liabilities at the date of which the respectiveleased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The

finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on theremaining balance of the liability for each period.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include thenet present value of the fixed lease payments, less any lease incentive receivables.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readilydetermined, which is generally the case for the leases of the Group, the lessee’s incremental borrowing rate is used, being

the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to theright-of-use asset in a similar economic environment with similar terms, security and conditions.

Right-of-use assets include the rights to use leasehold land, certain properties and equipment under leases which aremeasured at cost. The initial costs of right-of-use assets include the following:

. the amount of the initial measurement of lease liability,

. any lease payments made at or before the commencement date,

. any initial direct costs, and

. restoration costs.

Right-of-use assets including leasehold land are generally depreciated over the shorter of the asset’s useful life andthe lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-useassets are depreciated over the underlying asset’s useful life.


– I-21 –


Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as

an expense in profit or loss. Short-term leases are leases with a lease term of less than 12 months.

For a lease modification that is not accounted for as a separate lease, at the effective date of the lease modificationthe Group remeasures the lease liability by discounting the revised lease payments using a revised discount rate and makethe corresponding adjustment to the right-of-use asset.

2.25 Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

the profit attributed to owners of the Company, excluding any costs of servicing equity other than ordinaryshares, by the weighted average number of ordinary shares outstanding during the reporting period.

(ii) Diluted earnings per share

Diluted earnings per share adjusted the figures used in the determination of basis earnings per share to takeinto account:

the after income tax effect of interest and other financing costs associated with dilutive potential ordinaryshares, and the weighted average number of additional ordinary shares that would have been outstanding

assuming the conversion of all dilutive potential ordinary shares.

2.26 Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant

will be received and the Group will comply with all attached conditions.

Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to matchthem with the costs that they are intended to compensate.

2.27 Borrowings

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of theliability for at least 12 months after the reporting period, in which case they are presented as non-current liabilities.

Borrowings are initially recognised at fair value, net of transaction costs incurred and subsequently measured atamortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in

profit or loss over the periods of the borrowings using the effective interest method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled

or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred toanother party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised inprofit or loss as finance costs.

2.28 Borrowing costs

Borrowing costs are recognised in profit or loss using the effective interest method.


– I-22 –


3 FINANCIAL RISK MANAGEMENT

3.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks: foreign exchange risk, credit risk and liquidity riskand cash flow interest rate risk. The Group’s overall risk management programme focuses on the unpredictability of

financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

(a) Foreign exchange risk

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilitiesdenominated in a currency that is not the Group’s functional currency. In the opinion of the directors, the Group hasno significant foreign exchange risk as most of the sale and purchase transactions are denominated in Hong Kongdollars.

(b) Credit risk

(i) Risk Management

The credit risk of the Group mainly arises from cash and cash equivalents, trade receivables, otherreceivables, deposits, amounts due from directors, shareholders and related companies. The carrying amounts

of these balances represent the Group’s maximum exposure to credit risk in relation to financial assets.

In order to minimise the credit risk arising from bank deposits, deposits are mainly placed withreputable banks.

For credit exposure to customers, where no single client contributing material revenue, the Group’smanagement divides customers into different categories. Category A represents receivables from hospitals forservices rendered to credit-worthy customers who are required to undergo long surgery and rehabilitation

process. Category B represents receivables from hospitals for services rendered to customers other than thoseclassified as Category A. Category C represents receivables from insurance and health solution companies forrevenue derived at medical centres. Category D represents receivables from credit card companies for revenue

derived at medical centres. Category E represents receivables from third party medical centres for revenuederived at imaging and diagnostic centre. The Group assesses the credit quality of each category through pastcollection history and other relevant factors.

Management assesses the credit risk for other receivables, deposits, amounts due from directors,shareholders and related companies by assessing the nature of the financial assets and the financial condition

of the counterparties. Management has closely monitored the credit qualities and the collectability of thesefinancial assets.

(ii) Impairment of financial assets

Trade receivables

The Group applies the HKFRS 9 simplified approach to measuring expected credit losses whichuses a lifetime expected loss allowance for all trade receivables.

To measure the expected credit losses, trade receivables have been grouped into five categoriesbased on shared credit risk characteristics (Note 3.1(b)(i)).

As at 31 March 2019, the Group assessed a loss allowance amounted to HK$4,622,000 forCategory A. The amount represented 100% of the trade receivable balance of Category A as at 31

March 2019, which mainly represented a full provision for receivables from a single patient who failedto make payment for over 10 months, due to the patient’s financial difficulties in settling the tradereceivable balance. During the years ended 31 March 2020 and 2021, the Group continued to provide

medical services to the patient under Category A while no revenue is recognised, because thecollectability was assessed to be not probable.


– I-23 –


The loss allowance for Category B as at 31 March 2019 was assessed as immaterial because the

historical settlement pattern of the receivables under Category B for the year ended 31 March 2019 wassatisfactory. The expected credit loss rates of Category B for the year ended 31 March 2019 wastherefore close to zero. The loss allowances for Category B as at 31 March 2020 and 2021 and 30

September 2021 are shown as follows:

Current

1–30days

past due

31–60days

past due

61–90days

past due

91–180days

past due

181–270days

past due

271–360days

past due

361–720days

past due Total

31 March 2020Category BExpected loss rate 0%* 0%* 1.8% 2.7% 4.4% 17.5% 26.2% 100% 1.7%

Gross carrying amount(in HK$’000) 6,415 1,117 498 442 384 4 61 96 9,017

Loss allowance(in HK$’000) — — 9 12 17 —* 16 96 150

* close to zero

Current

1–30days

past due

31–60days

past due

61–90days

past due

91–180days

past due

181–270days

past due

271–360days

past due

361–720days

past due Total

31 March 2021Category BExpected loss rate 0.1% 2.0% N/A 9.1% 19.5% N/A 50% 100% 1.4%Gross carrying amount

(in HK$’000) 10,694 152 — 22 41 — 2 126 11,037

Loss allowance(in HK$’000) 9 4 — 2 8 — 1 126 150

Current

1–30days

past due

31–60days

past due

61–90days

past due

91–180days

past due

181–270days

past due

271–360days

past due

361–720days

past due Total

30 September 2021Category BExpected loss rate 0.1% 0.1% 0.4% 1.1% 11.8% 27.3% 40% 100% 1.6%

Gross carrying amount(in HK$’000) 7,787 699 251 273 34 11 40 118 9,213

Loss allowance (in

HK$’000) 4 1 1 3 4 3 16 118 150

* close to zero


– I-24 –


The loss allowance for Category C as at 31 March 2019 and 2020 were assessed as immaterial

because the historical settlement pattern of the receivables under Category C for the years ended 31March 2019 and 2020 were satisfactory. The expected credit loss rates of Category C for the yearsended 31 March 2019 and 2020 were therefore close to zero. The loss allowances for Category C as at

31 March 2021 and 30 September 2021 is shown as follow:

Current

1–30days

past due

31–60days

past due

61–90days

past due

91–180days

past due

181–270days

past due

271–360days

past due

361–720days

past due Total

31 March 2021Category CExpected loss rate 0.5% 1.1% 1.4% 2.5% 2.8% 4.3% 5.1% 43.6% 4.4%

Gross carrying amount(in HK$’000) 3,679 187 73 17 71 70 39 390 4,526

Loss allowance(in HK$’000) 20 2 1 —* 2 3 2 170 200

Current

1–30days

past due

31–60days

past due

61–90days

past due

91–180days

past due

181–270days

past due

271–360days

past due

361–720days

past due Total

30 September 2021

Category CExpected loss rate 0.7% 1.6% 1.9% 2.9% 4.3% 4.6% 5.5% 42% 4.3%Gross carrying amount

(in HK$’000) 2,123 312 258 140 164 87 55 243 3,382

Loss allowance (inHK$’000) 15 5 5 4 7 4 2 103 145

* close to zero


– I-24.1 –


The loss allowance for other categories as at 31 March 2019, 2020 and 2021 and 30 September

2021 were assessed as immaterial because the historical settlement pattern of the receivables underother categories were satisfactory. The expected credit loss rates of other categories for the years ended31 March 2019, 2020 and 2021 and 30 September 2021 were therefore close to zero.

The expected loss rates are determined based on the payment profiles of customers over a period

of 5 to 24 months depending on different categories of trade receivables, the corresponding historicalcredit losses experienced within such periods, and the management’s industry specific experience. Thehistorical loss rates are adjusted to reflect current market condition and forward-looking information onmacroeconomic factors affecting the ability of the customers to settle the receivables. The Group has

identified the GDP of Hong Kong as the most relevant factor and adjusts the historical loss rates basedon the expected changes of such factors.

Trade receivables are written off when there is no reasonable expectation of recovery. Indicatorsthat there is no reasonable expectation of recovery include, amongst others, the bankruptcy of the

debtor or the failure of a debtor to engage in a repayment plan with the Group.

Impairment losses on trade receivables are presented as provision for impairment losses on

financial assets in the consolidated statements of comprehensive income. Subsequent recoveries ofamounts previously written off are credited against the same line item.

Other financial assets carried at amortised cost

The Group’s other financial assets at amortised cost include deposits, other receivables, andamounts due from directors, shareholders and related companies. The loss allowance of other financialassets at amortised cost is measured based on the 12-month expected credit loss. The 12-month

expected credit loss is the portion of lifetime expected credit loss that results from default events on afinancial instrument that are possible within 12 months after the reporting date. However, when therehas been a significant increase in credit risk since origination, the allowance will be based on the

lifetime expected credit loss.

Management has performed assessment on the recoverability of these balances and do notidentify events leading to significant increase in credit risk since origination. Management considersthat the expected credit loss is immaterial as at the end of each reporting period.


– I-25 –


(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents. Due to the

dynamic nature of the underlying businesses, the policy of the Group is to regularly monitor the Group’s liquidityrisk and to maintain adequate cash and cash equivalents to meet the Group’s liquidity requirements.

The table below analyses the Group’s financial liabilities into relevant maturity groupings based on theircontractual maturity dates. The amounts disclosed in the table are the contractual undiscounted cash flows. Balancesdue within 12 months equal their carrying balances, as the impact of discounting is not significant.

Ondemand/within1 year

Between1 and 2years

Between2 and 5years

Over5 years

Totalcontractualcash flows

Carryingamount

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 31 March 2019Trade payables 5,444 — — — 5,444 5,444

Other payables 6,841 — — — 6,841 6,841Amount due to a

shareholder 279 — — — 279 279

Amount due to a relatedcompany 100 — — — 100 100

Lease liabilities 7,853 7,633 1,958 — 17,444 16,677

20,517 7,633 1,958 — 30,108 29,341

At 31 March 2020Trade payables 6,307 — — — 6,307 6,307Other payables 17,658 — — — 17,658 17,658

Dividend payable 66,720 — — — 66,720 66,720Lease liabilities 16,006 6,753 627 — 23,386 22,526

106,691 6,753 627 — 114,071 113,211

At 31 March 2021Trade payables 6,111 — — — 6,111 6,111Other payables 22,700 — — — 22,700 22,700Bank borrowing 75,679 — — — 75,679 75,000

Lease liabilities 21,442 19,545 50,398 13,980 105,365 93,092

125,932 19,545 50,398 13,980 209,855 196,903

At 30 September 2021Trade payables 6,148 — — — 6,148 6,148

Other payables 27,615 — — — 27,615 27,615Bank borrowings 9,459 4,459 13,378 64,637 91,933 78,427Lease liabilities 22,741 17,605 50,463 5,592 96,401 86,175

65,963 22,064 63,841 70,229 222,097 198,365

Hong Kong Interpretation 5 requires a term loan that contains a clause that gives the lender the unconditional

right to call the loan at any time shall be classified in total by the borrower as current in the consolidated statementsof financial position. This is irrespective of whether a default event has occurred and notwithstanding any other termsand maturity stated in the loan agreement. As at 31 March 2021 and 30 September 2021, bank borrowings of

HK$75,000,000 and HK$5,000,000 were classified as current liabilities due to this requirement.


– I-26 –


Disregarding the clause that gives the lender the unconditional right to call the loan at any time, the Group’s

borrowing will be repaid in accordance with the scheduled repayment dates set out in the loan agreement, details ofwhich are set out in the table below.

Within1 year

Between1 and 2years

Between2 and 5years

Over5 years

Totalcontractualcash flows

Carryingamount

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 31 March 2019Bank borrowing — — — — — —

At 31 March 2020Bank borrowing — — — — — —

At 31 March 2021Bank borrowing 4,459 4,459 13,378 66,903 89,199 75,000

At 30 September 2021Bank borrowings 9,459 4,459 13,378 64,637 91,933 78,427

(d) Cash flow interest rate risk

As the Group has no significant interest-bearing assets except for the cash and cash equivalents, the Group’sincome and operating cash flows are substantially independent of changes in market interest rates.

The Group’s interest rate risk mainly arises from the bank borrowing with variable rate, which exposes theGroup to cash flow interest rate risk. The Group’s cash flow interest rate risk is mainly concentrated on the

fluctuation of Hong Kong Interbank Offered Rate (‘‘HIBOR’’) arising from the Group’s bank borrowings.

At 31 March 2019, 2020 and 2021 and 30 September 2021, if interest rate on borrowing had been 10 basis

points higher/lower with all other variables held constant, post-tax profit for the year would have been HK$ Nil, HK$Nil, HK$63,000 and HK$65,000 lower/higher respectively, mainly as a result of higher/lower interest expense onfloating rate borrowing.

3.2 Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concernwhilst seeking to maximise benefits to shareholders and other stakeholders and to maintain an optimal capital structure to

reduce the cost of capital.

The Group actively and regularly reviews and manages its capital structure to ensure optimal capital structure andshareholder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailingand projected profitability, projected operating cash flows and projected capital expenditures.

Consistent with others in the industry, the Group monitors capital on the basis of gearing ratio. The ratio iscalculated as net debt divided by total equity. The gearing ratios at 31 March 2019, 2020 and 2021 and 30 September 2021

were as follows:

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Net debt (Note 30(c)) — — 72,825 51,957

Total equity 215,953 214,456 236,030 253,546

Gearing ratio N/A N/A 30.9% 20.5%


– I-27 –


3.3 Fair value estimation

The carrying amounts of the Group’s financial assets, including cash and cash equivalents, trade receivables, other

receivables and deposits, and amounts due from related parties, and financial liabilities, including trade payables, otherpayables, and amounts due to related parties, are a reasonable approximation of their fair values due to their short-termmaturities.


– I-27.1 –


The fair value of bank borrowings for disclosure purposes is estimated by discounting the future contractual cash

flows at the current market interest rate that is available to the Group for similar financial instruments.

This section explains the judgements and estimates made in determining the fair values of the financial instrumentsthat are recognised and measured at fair value in the consolidated financial statements. To provide an indication about thereliability of the inputs used in determining fair value, the Group has classified its financial instruments in accordance with

the three levels prescribed under the accounting standards.

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and

equity securities) is based on quoted market prices at the end of the reporting period. The quoted marketprice used for financial assets held by the Group is the current bid price. These instruments are included inlevel 1.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-

counter derivatives) is determined using valuation techniques which maximise the use of observablemarket data and rely as little as possible on entity-specific estimates. If all significant inputs required tofair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is includedin level 3. This is the case for unlisted equity securities.

The Group has a performance guarantee arrangement arose from the acquisition of HKID Limited. The arrangement

was entered into between the Group and one of the shareholders of HKID Limited (see Note 32 for details). The Groupclassified the performance guarantee arrangement as financial asset at fair value through profit or loss, under the level 3criteria as mentioned above.

The finance department of the Group includes a team that performs the valuation of financial assets or liabilitiescarried at fair value through profit or loss required for financial reporting purposes, including level 3 fair values. This team

reports directly to the board of directors. Discussions of the valuation process and results are held between the board ofdirectors and the valuation team.

The fair value of the performance guarantee arrangement as at 31 March 2020 and 2021 and 30 September 2021 wereassessed by management with reference to the probability-weighted scenario analysis conducted by an independent valuer,Vincorn Consulting and Appraisal Limited. The significant unobservable inputs and relationship of the inputs to fair value

of the performance guarantee arrangement are shown below:

Valuation dates Significant unobservable input Relationship of unobservable input to fair value

31 March 2020 Revenue growth rates — –15.7% to 24.6% The higher the growth rate, the lower the fair value31 March 2021 Revenue growth rates — 3.5% to 17.1% The higher the growth rate, the lower the fair value

30 September2021

Revenue growth rates — [3.5]% to [15.5]% The higher the growth rate, the lower the fair value

The fair value of the performance guarantee arrangement as at 31 March 2020 and 2021 and 30 September 2021 wereassessed as immaterial to the consolidated financial statements.

Sensitivity analysis

As at 31 March 2020 and 2021 and 30 September 2021, increasing the expected revenue growth rates by 10% wouldresult in a change in fair value approximately close to zero, while decreasing the expected revenue growth rates by 10%would result in an increase in fair value by approximately HK$112,000, HK$177,000 and HK$267,000.

There were no transfers between levels 1, 2 and 3 for recurring fair value measurements during the Track Record

Period.

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of Historical Financial Information requires the use of accounting estimates which, by definition, will

seldom equal the actual results. Management also needs to exercise judgement in applying the Group’s accounting policies.


– I-28 –


Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including

expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under thecircumstances.

(a) Business combination

Accounting for acquisitions require the Group to allocate the cost of acquisition to specific assets acquired andliabilities assumed based on their estimated fair values at the date of acquisition. The Group has undertaken processes toidentify all assets and liabilities acquired/assumed, including acquired intangible assets. Judgements made in identifying all

acquired assets, determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, aswell as asset’s useful lives, could materially impact the calculation of goodwill, bargain purchase and depreciation andamortisation charges in subsequent periods. Estimated fair values are based on information available near the acquisition

date and on expectations and assumptions that have been deemed reasonable by management. Determining the estimateduseful lives of tangible and intangible assets acquired also requires judgement.

The Group acquired certain imaging and diagnostic centres during the year ended 31 March 2020 (Note 32) in whichcertain imaging and diagnostic centres are not wholly owned by the Group after the business combination. Judgement isrequired in determining whether the Group has control over these acquired non-wholly-owned entities. The significant

judgement includes referencing to the number of board seats and shareholdings controlled by the Group.

Different conclusions around these judgements may materially impact how these investments are presented andmeasured in the consolidated statements of financial position of the Group.

(b) Impairment of financial assets

The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. TheGroup uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on theGroup’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(c) Income taxes and deferred income tax

Significant judgement is required in determining the provision for income taxes. There are many transactions andcalculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group

recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be required. Wherethe final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impactthe income tax and deferred income tax provisions in the period in which such determination is made.

Deferred income tax assets relating to certain temporary differences and tax losses are recognised when management

considers it is likely that future taxable profits will be available against which the temporary differences or tax losses can beutilised. When the expectations are different from the original estimates, such differences will impact the recognition ofdeferred income tax assets and income tax charges in the period in which such estimates have been changed.

(d) Useful lives of property, plant and equipment

The Group’s management determines the estimated useful lives and related depreciation charges for its property,plant and equipment. This estimate is based on the historical experience of the actual useful lives of property, plant and

equipment of similar nature and functions. It could change significantly as a result of technical innovations and competitoractions in response to severe industry cycles. Management will increase the depreciation charge where useful lives are lessthan previously estimated, or will write-off or write-down technically obsolete or non-strategic assets that have beenabandoned or sold.

(e) Impairment of goodwill

The Group performs impairment assessment at each reporting date to assess whether goodwill has suffered any

impairment, in accordance with the accounting policy stated in Note 2.9. The recoverable amounts of CGUs have beendetermined based on value-in-use calculations. These calculations require the use of estimates and judgements. The keyassumptions used in the value-in-use calculations were growth rate of revenue, budgeted gross margin ratio, pre-tax discountrate and terminal growth rate. Changes in the conditions affect the assessed result of goodwill impairment test. Details of

impairment charge, key assumptions and impact of possible changes in key assumptions are disclosed in Note 13.


– I-29 –


(f) Fair value of financial asset at fair value through profit or loss

The fair value of financial asset at fair value through profit or loss were determined by using various valuation

techniques. The Group uses its judgement to select a variety of methods and make assumptions, including the revenuegrowth rates, which are mainly based on market conditions existing at the end of each reporting period. Changes inassumptions used could materially affect the fair value of these balances and as a result affect the Group’s financial

condition and results of operation.

5 REVENUE AND SEGMENT INFORMATION

(a) Revenue

Revenue, which is also the Group’s turnover, represents amounts received and receivable from the provision ofprivate specialty healthcare services, management services to medical centres and imaging and diagnostic services in Hong

Kong, net of discount. An analysis of revenue is as follows:

Year ended 31 MarchSix months ended 30

September

2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

RevenueRecognised over time fromCustomers at private hospitals 89,711 91,868 79,967 38,226 47,681Customers at medical centres 42,053 54,182 57,195 28,629 33,670

Medical centre management services 3,375 4,598 4,531 2,266 2,265Provision of COVID-19 vaccination services — — 2,870 — 19,814

135,139 150,648 144,563 69,121 103,430

Recognised at a point in time fromSales of pharmaceutical goods 60,521 86,683 81,720 40,033 46,113Imaging and diagnostic services — 11,063 25,151 12,110 16,457

60,521 97,746 106,871 52,143 62,570

Total revenue 195,660 248,394 251,434 121,264 166,000

The Group has recognised the following liabilities related to contracts with customers:

As at 31 MarchAs at 30

September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Contract liabilities — income from medical centres 411 431 2,947 375

The Group’s contracts with customers are for periods of one year or less. As permitted under HKFRS 15, the

transaction price allocated to these unsatisfied contracts is not disclosed.

As at 31 March 2021, contract liabilities have increased by HK$2,516,000 mainly resulted from the receipt in

advance regarding the provision of COVID-19 vaccination services.

As at 30 September 2021, contract liabilities have decreased by HK$2,572,000 mainly resulted from the utilisation ofthe above advance upon the provision of COVID-19 vaccination services.


– I-30 –


(b) Segment information

Management has determined the operating segments based on the reports reviewed by the CODM that are used to

making strategic decisions. The CODM is identified as the Executive Directors. The Executive Directors consider the[REDACTED] Business has three reporting segments and assess their performance based on respective revenue and resultsfor the purposes of allocating resources and assessing performance. These reports are prepared on the same basis as these

consolidated financial statements. Information relating to segment assets and liabilities are not disclosed as such informationis not regularly reported to the CODM.

The [REDACTED] Business is mainly divided into three major lines of services which depending on how thepatients are treated or what services are provided. Management has therefore identified the reportable segments based on theGroup’s lines of services, namely specialist medical services, allied health services, and medical centre managementservices. Specialist medical services are rendered by the Group’s medical practitioners registered with the Medical Council


– I-30.1 –


of Hong Kong. Allied health services include those rendered by the Group’s medical practitioners registered with othercouncils and those rendered at the Group’s diagnostic centres. Management services are rendered to a HKMCOphthalmology Centre and several medical practitioners and an imaging and diagnostic centre.

The reportable segment revenue and results for the years ended 31 March 2019, 2020 and 2021 and the six monthsended 30 September 2020 and 2021 were as follows:

Specialistmedical services


Medical centremanagement

services Total

HK$’000 HK$’000 HK$’000 HK$’000

For the year ended 31 March 2019Timing of revenue recognition— Over time 131,752 12 3,375 135,139— A point in time 60,521 — — 60,521

Revenue from external sales 192,273 12 3,375 195,660

Segment results 69,482 4 2,747 72,233

Unallocated:Finance costs, net (614)

Profit before income tax 71,619

For the year ended 31 March 2020Timing of revenue recognition— Over time 145,744 306 4,598 150,648— A point in time 86,683 12,831 — 99,514

232,427 13,137 4,598 250,162

Elimination of inter-segment sales — (1,768) — (1,768)

Revenue from external sales 232,427 11,369 4,598 248,394

Segment results 56,786 (2,423) 3,434 57,797

Unallocated:Finance income, net 1,385


For the year ended 31 March 2021Timing of revenue recognition— Over time 136,286 4,011 4,531 144,828— A point in time 81,720 32,472 — 114,192

218,006 36,483 4,531 259,020



Segment results 39,860 (1,768) 3,256 41,348

Unallocated:[REDACTED] expenses [REDACTED]Finance costs, net (242)



– I-31 –


Specialistmedical services


Medical centremanagement

services Total

HK$’000 HK$’000 HK$’000 HK$’000

For the six months ended 30September 2020 (unaudited)

Timing of revenue recognition— Over time 66,365 490 2,266 69,121— A point in time 40,033 15,757 — 55,790

106,398 16,247 2,266 124,911



Segment results 23,111 (791) 1,786 24,106

Unallocated:[REDACTED] expenses [REDACTED]Finance costs, net 354


For the six months ended 30September 2021

Timing of revenue recognition— Over time 81,725 20,307 2,265 104,297— A point in time 46,113 21,813 — 67,926

127,838 42,120 2,265 172,223

Elimination of inter-segment sales (867) (5,356) — (6,223)


Segment results 18,544 7,548 1,538 27,630

Unallocated:[REDACTED] expenses [REDACTED]Finance costs, net (2,725)


All the revenue of the Group was generated in Hong Kong during the Track Record Period. All non-current assetswere kept in Hong Kong during Track Record Period.


– I-31.1 –


There is no other single external customer contributed more than 10% to the Group’s revenue for the years ended 31

March 2019, 2020 and 2021 and the six months ended 30 September 2020 and 2021 respectively.

No geographical segment information is presented as all the revenue and operating profits of the Group are derivedwithin Hong Kong and all the operating assets of the Group are located in Hong Kong, which is considered as onegeographic location with similar risks and returns.

6 EXPENSES BY NATURE


2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Auditor’s remuneration— Audit services 600 830 891 233 120— Non audit services 52 206 226 103 113

Amortisation of intangible asset (Note 13) — 19 45 14 23Depreciation of property, plant and equipment (Note

11) 2,859 6,133 6,367 3,217 3,954

Depreciation of right-of-use assets (Note 12) 8,175 14,667 19,133 8,160 13,427Laboratory examination and radiologist reporting

fees 8,775 13,394 18,207 8,597 11,060[REDACTED] expenses — — [REDACTED] [REDACTED] [REDACTED]

Cost of pharmaceutical goods and medicalconsumables (Note 17) 33,502 49,165 46,019 22,405 27,757

Employee benefit expenses (including directors’

emoluments) (Note 6(i) and 8) 15,694 28,104 32,789 13,928 19,930Short-term lease expenses 974 1,155 4,299 2,534 2,290Legal and professional fees 417 1,110 985 379 438

Share-based payment expenses — 530 2,963 845 1,862Services fees to consultants 41,847 66,128 64,236 30,089 39,604Service fees to helpers of vaccination centre — — — — 9,865Hospital service fees 1,231 1,247 995 466 647

Building management fees 901 1,409 1,652 812 1,516Marketing expenses 913 1,212 2,328 1,431 746Repair and maintenance expenses 7 831 2,758 1,436 1,382

Credit card charges 1,111 1,595 1,659 795 1,014Other expenses 1,747 2,712 4,334 1,714 1,714

Total cost of sales, selling and marketing expensesand administrative expenses 118,805 190,447 224,203 104,651 142,083

Note:

(i) During the year ended 31 March 2021 and the six months ended 30 September 2020, subsidies from EmploymentSupport Scheme of the Government of the Hong Kong Special Administrative Region amounting to HK$4,394,000and HK$2,197,000 respectively were received by the Group and offset against the employee benefit expenses.


– I-32 –


7 FINANCE (COSTS)/INCOME, NET


2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Finance income:Interest income on bank deposits 35 2,436 1,199 815 40

Finance costs:Interest expense on lease liabilities (619) (998) (1,347) (423) (2,054)

Interest expense on bank borrowings — — — — (677)Provision: unwinding of discounting impact

(Note 24) (30) (53) (94) (38) (34)

(649) (1,051) (1,441) (461) (2,765)


8 EMPLOYEE BENEFIT EXPENSES (INCLUDING DIRECTORS’ EMOLUMENTS)


2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Wages and salaries 14,663 26,813 30,960 13,062 18,888

Pension costs — defined contribution plan 539 885 1,110 510 624Directors’ emoluments — — — — —

Others 492 406 719 356 418

15,694 28,104 32,789 13,928 19,930

(a) Pension costs — defined contribution plan

The Group has arranged for its Hong Kong employees to join the Mandatory Provident Fund Scheme (the ‘‘MPF

Scheme’’), a defined contribution scheme managed by an independent trustee. Under the MPF Scheme, the Group and itsemployees make monthly contributions to the scheme at 5% of the employees’ earnings as defined under the MandatoryProvident Fund legislation. Both the Group’s and the employees’ contributions were subject to a monthly cap of HK$1,500

and thereafter contributions are voluntary.


– I-33 –


(b) Directors’ and chief executive’s emoluments

The remuneration of the directors and the chief executive officer for the year ended 31 March 2019 is set out below:

Emoluments paid orreceivable in respectof a person’s service

as a director,whether of theCompany or its

subsidiaryundertakings

Emoluments paid or receivable in respect of director’s otherservices in connection with the management of the affairs,whether of the Company or its subsidiary undertaking

Fee SalariesDiscretionary

bonuses

Definedcontributionpension costs

Otherallowancesand benefits

in kind Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Chief executive officer and

executive directorDr. Kenneth Tsang

(Note (i)) — — — — — —

Executive directorsDr. Adam Leung (Note (i)) — — — — — —

Mr. Shiu (Note (i)) — — — — — —

Mrs. Chen (Note (i)) — — — — — —

— — — — — —

The remuneration of the directors and the chief executive officer for the year ended 31 March 2020 is set out below:






bonuses



in kind Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Chief executive officer andexecutive director

Dr. Kenneth Tsang(Note (i)) — — — — — —

Executive directors

Dr. Adam Leung (Note (i)) — — — — — —

Mr. Shiu (Note (i)) — — — — — —

Mrs. Chen (Note (i)) — — — — — —

— — — — — —


– I-34 –


The remuneration of directors and chief executive officer for the year ended 31 March 2021 is set out below:






bonuses



in kind Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000


executive directorDr. Kenneth Tsang

(Note (i)) — — — — — —


Mr. Shiu (Note (i)) — — — — — —

Mrs. Chen (Note (i)) — — — — — —

— — — — — —

The remuneration of directors and chief executive officer for the six months ended 30 September 2020 (unaudited) isset out below:






bonuses



in kind Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000


executive director — — — — — —



Mr. Shiu (Note (i)) — — — — — —

Mrs. Chen (Note (i)) — — — — — —

— — — — — —


– I-35 –


The remuneration of directors and chief executive officer for the six months ended 30 September 2021 is set out

below:






bonuses



in kind Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Chief executive officer andexecutive director — — — — — —



Mr. Shiu (Note (i)) — — — — — —

Mrs. Chen (Note (i)) — — — — — —

— — — — — —

Notes:

(i) Dr. Kenneth Tsang was appointed as the Company’s chief executive officer and executive director on 21 September2020. Dr. Adam Leung, Mr. Shiu and Mrs. Chen were appointed as the Company’s executive directors on 21

September 2020.

(ii) During the Track Record Period, the independent non-executive directors had not yet been appointed and did notreceive any remuneration in their capacity as the Company’s directors.

(c) Benefits and interests of directors

There were no benefits offered to the directors of the Company during the Track Record Period.

(d) Directors’ retirement and termination benefits

None of the directors of the Company received any retirement benefits or termination benefits in respect of theirservices to the Group for the Track Record Period.

(e) Consideration provided to third parties for making available directors’ services

During the Track Record Period, the Group had not paid any consideration to any third parties for making availabledirectors’ services to the Group.

(f) Information about loans, quasi-loans and other dealings in favour of directors, controlled bodies corporate byand connected entities with such directors

Except for the advances to the directors of the Company during the Track Record Period as disclosed in Note34(c)(i), which were interest-free, unsecured and repayable on demand, there were no other loans, quasi-loans and other

dealings entered into by the Group in favour of the directors of the Company, or body corporate controlled by or entitiesconnected with any of the directors of the Company as at 31 March 2019, 2020 and 2021 and 30 September 2021 or at anytime during the Track Record Period.


– I-35.1 –


(g) Directors’ material interests in transactions, arrangements or contracts

Pursuant to the service agreements dated 3 November 2017 (the ‘‘Service Agreements’’) entered into between HongKong Medical Consultants and each of Dr. Kenneth Tsang and Dr. Adam Leung, Dr. Kenneth Tsang and Dr. Adam Leungagreed to provide specialist medical services to Hong Kong Medical Consultants in accordance with the terms of the ServiceAgreements. The consideration payable to each of Dr. Kenneth Tsang and Dr. Adam Leung was nil for each of the yearsended 31 March 2019, 2020 and 2021.

Save for the abovementioned contracts and transactions, no other significant transactions, arrangements and contractsto which the Company was a party and in which a director of the Company had a material interest, whether directly orindirectly, subsisted as at 31 March 2019, 2020 and 2021 and 30 September 2021 or at any time during the Track RecordPeriod.

(h) Five highest paid individuals

The five individuals whose emoluments were the highest in the Group for each of the years ended 31 March 2019,2020 and 2021 and the six months ended 30 September 2020 and 2021 include no director whose emoluments are reflectedin the analysis presented above. The aggregate amounts of emoluments for the five highest paid individuals for each of theyears ended 31 March 2019, 2020 and 2021 and the six months ended 30 September 2020 and 2021, respectively are asfollows:


2019 2020 2021 2020 2021


Wages, salaries and bonuses 4,732 7,020 8,543 3,210 4,718Pension costs-defined contribution plan 90 72 90 45 45

4,822 7,092 8,633 3,255 4,763

The emoluments of those individuals fell within the following bands:


2019 2020 2021 2020 2021

(Unaudited)

Emolument bands

Nil — HK$1,000,000 4 4 2 3 3HK$1,000,001 — HK$1,500,000 — — 1 2 1HK$1,500,001 — HK$2,000,000 — — — — 1HK$2,000,001 — HK$2,500,000 — — 1 — —

HK$2,500,001 — HK$3,000,000 1 — — — —

HK$3,500,001 — HK$4,000,000 — 1 1 — —

5 5 5 5 5

9 INCOME TAX EXPENSES

The Group’s principal applicable taxes and tax rates are as follows:

(a) Cayman Islands

Under the current laws of Cayman Islands, the Company is not subject to tax on income or capital gain. In addition,upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

(b) British Virgin Islands

The Group’s entities incorporated in the British Virgin Islands are not subject to tax on income or capital gains.

(c) Hong Kong

Hong Kong profits tax rate of 16.5% was applied on the total estimated assessable profits of the companiescomprising the Group during the Track Record Period.


– I-36 –


The amount of income tax charged to the consolidated statements of comprehensive income represents:


2019 2020 2021 2020 2021


Current income tax expenses— Hong Kong profits tax (12,442) (9,991) (7,629) (4,149) (3,974)— Deferred income tax (Note 16) 783 502 1,233 462 (656)

(11,659) (9,489) (6,396) (3,687) (4,630)

The tax on the Group’s profit before income tax differs from the theoretical amount that would arise using theapplicable tax rate as follows:


2019 2020 2021 2020 2021



Calculated at a taxation rate of 16.5% (11,817) (9,765) (4,420) (2,800) (3,347)Expenses not deductible for tax purposes (73) (351) (3,051) (1,527) (1,271)Income not subject to tax 6 402 925 497 155Temporary difference not recognised — — — (52) (332)Under-provision in prior year — — (45) — —

Tax concession 60 60 30 30 —

Effect of different tax rates (Note) 165 165 165 165 165


Note: Under the two-tier tax rates in Hong Kong, the first HK$2,000,000 of assessable profit of one of the subsidiaries ofthe Group for the years ended 31 March 2019, 2020 and 2021 and 30 September 2020 and 2021 was taxed at a

reduced rate of 8.25%, where the normal profits tax rate is 16.5%.

10 EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average

number of ordinary shares in issue during the Track Record Period.

In determining the weighted average number of shares in issue during the Track Record Period, 1,073,307 shares of theCompany issued in connection with the Reorganisation, as disclosed in Note 1.2 above, were deemed to have been issued on 1April 2018.


2019 2020 2021 2020 2021

(Unaudited)

Profit attributable to equity owners of the

Company (HK$’000) 59,960 50,194 21,643 13,869 15,270Weighted average number of ordinary

shares in issue (’000) 1,073 1,073 1,073 1,073 1,073

Basic earnings per share (in HK$/share) 55.86 46.77 20.16 12.92 14.23

Diluted earnings per share for the Track Record Period were the same as the basic earnings per share as there were no

potential dilutive ordinary shares outstanding during the Track Record Period.


– I-37 –


11 PROPERTY, PLANT AND EQUIPMENT

Medicalequipment

Leaseholdimprovements

Officefurniture and

fixturesComputerequipment

Motorvehicles Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Year ended 31 March 2019Opening net book amount 344 2,812 81 215 76 3,528Additions 949 5,360 140 536 — 6,985

Depreciation (Note 6) (236) (2,378) (45) (124) (76) (2,859)

Closing net book amount 1,057 5,794 176 627 — 7,654

At 31 March 2019Cost 1,351 9,273 309 840 1,507 13,280

Accumulated depreciation (294) (3,479) (133) (213) (1,507) (5,626)

Net book amount 1,057 5,794 176 627 — 7,654

Year ended 31 March 2020Opening net book amount 1,057 5,794 176 627 — 7,654

Additions 368 5,590 577 716 — 7,251Acquired from business

combination (Note 32) 2,006 274 502 17 — 2,799

Depreciation (Note 6) (1,598) (4,008) (301) (226) — (6,133)

Closing net book amount 1,833 7,650 954 1,134 — 11,571

At 31 March 2020Cost 3,725 15,137 1,388 1,573 1,507 23,330

Accumulated depreciation (1,892) (7,487) (434) (439) (1,507) (11,759)

Net book amount 1,833 7,650 954 1,134 — 11,571


– I-38 –


BuildingMedical

equipmentLeasehold

improvements

Officefurniture and

fixturesComputerequipment

Motorvehicles Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Year ended 31 March 2021Opening net book amount — 1,833 7,650 954 1,134 — 11,571Additions 28,766 1,310 275 45 457 — 30,853

Depreciation (Note 6) — (1,042) (4,585) (387) (353) — (6,367)

Closing net book amount 28,766 2,101 3,340 612 1,238 — 36,057

At 31 March 2021Cost 28,766 5,035 15,412 1,433 2,030 1,507 54,183

Accumulated depreciation — (2,934) (12,072) (821) (792) (1,507) (18,126)

Net book amount 28,766 2,101 3,340 612 1,238 — 36,057

Six months ended 30September 2021

Opening net book amount 28,766 2,101 3,340 612 1,238 — 36,057Additions — 3,227 19,693 575 907 — 24,402Depreciation (Note 6) (480) (500) (2,576) (148) (250) — (3,954)

Disposal (Note 33(c)) — — (947) (30) — — (977)

Closing net book amount 28,286 4,828 19,510 1,009 1,895 — 55,528

At 30 September 2021Cost 28,766 8,238 25,539 1,830 2,937 — 67,310

Accumulated depreciation (480) (3,410) (6,029) (821) (1,042) — (11,782)

Net book amount 28,286 4,828 19,510 1,009 1,895 — 55,528

Depreciation have been charged to the following categories of expenses in the consolidated statements of comprehensiveincome:


2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Cost of sales 2,614 4,731 5,522 2,806 3,555Administrative expenses 245 1,402 845 411 399

2,859 6,133 6,367 3,217 3,954

The Group’s building and leasehold land (Note 12) with carrying amounts of approximately HK$28,766,000 and

HK$135,610,000 respectively as at 31 March 2021 and HK$28,286,000 and HK$134,254,000 as at 30 September 2021 respectivelyhave been pledged to a bank for bank facilities granted to the Group (Note 29).


– I-39 –


12 RIGHT-OF-USE ASSETS

Leaseholdland Properties

Medicalequipment

Officeequipment Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Year ended 31 March 2019Opening net book amount — 11,284 — — 11,284Additions — 6,578 — — 6,578Effect of lease modification — 7,249 — — 7,249

Depreciation (Note 6) — (8,175) — — (8,175)

Closing net book amount — 16,936 — — 16,936

At 31 March 2019Cost — 28,995 — — 28,995

Accumulated depreciation — (12,059) — — (12,059)

Net book amount — 16,936 — — 16,936

Year ended 31 March 2020Opening net book amount — 16,936 — — 16,936

Acquired from business combination(Note 32) — 5,457 3,588 498 9,543

Additions — 9,484 — — 9,484

Effect of lease modification — 1,941 — — 1,941Depreciation (Note 6) — (13,568) (1,056) (43) (14,667)

Closing net book amount — 20,250 2,532 455 23,237

At 31 March 2020Cost — 44,706 3,588 498 48,792Accumulated depreciation — (24,456) (1,056) (43) (25,555)

Net book amount — 20,250 2,532 455 23,237

Year ended 31 March 2021Opening net book amount — 20,250 2,532 455 23,237Additions 135,610 86,118 — 114 221,842Depreciation (Note 6) — (16,488) (2,532) (113) (19,133)

Effect of lease modification — — — (111) (111)

Closing net book amount 135,610 89,880 — 345 225,835

At 31 March 2021Cost 135,610 130,824 3,588 464 270,523

Accumulated depreciation — (40,944) (3,588) (119) (44,688)

Net book amount 135,610 89,880 — 345 225,835


– I-40 –


Leaseholdland Properties

Medicalequipment

Officeequipment Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Six months ended 30 September 2021Opening net book amount 135,610 89,880 — 345 225,835Additions — 1,806 — 136 1,942

Depreciation (Note 6) (1,356) (12,007) — (64) (13,427)

Closing net book amount 134,254 79,679 — 417 214,350

At 30 September 2021Cost 135,610 132,630 3,588 637 272,465

Accumulated depreciation (1,356) (52,951) (3,588) (220) (58,115)

Net book amount 134,254 79,679 — 417 214,350


– I-40.1 –


Depreciation have been charged to the following categories of expenses in the consolidated statements of comprehensive

income:


2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Cost of sales 7,390 11,251 15,461 6,324 11,591

Administrative expenses 785 3,416 3,672 1,836 1,836

8,175 14,667 19,133 8,160 13,427

The Group’s leasehold land and building (Note 11) with carrying amounts of approximately HK$135,610,000 andHK$28,766,000 respectively as at 31 March 2021 and HK$134,254,000 and HK$28,286,000 as at 30 September 2021 respectivelyhave been pledged to a bank for bank facilities granted to the Group (Note 29).

13 INTANGIBLE ASSETS

GoodwillCustomerrelationship Total

HK$’000 HK$’000 HK$’000

Year ended 31 March 2019As at 1 April 2018 and 31 March 2019Net book amount — — —

Year ended 31 March 2020Opening net book amount — — —

Arising from business combination (Note 32) 17,655 226 17,881Amortisation (Note 6) — (19) (19)

Closing net book amount 17,655 207 17,862

At 31 March 2020Cost 17,655 226 17,881Accumulated amortisation — (19) (19)

Net book amount 17,655 207 17,862

Year ended 31 March 2021Opening net book amount 17,655 207 17,862Amortisation (Note 6) — (45) (45)


At 31 March 2021Cost 17,655 226 17,881Accumulated amortisation — (64) (64)

Net book amount 17,655 162 17,817

Six months ended 30 September 2021Opening net book amount 17,655 162 17,817Amortisation (Note 6) — (23) (23)


At 30 September 2021Cost 17,655 226 17,881Accumulated amortisation — (87) (87)

Net book amount 17,655 139 17,794


– I-41 –


On 30 October 2019, the Group completed the acquisition of three imaging and diagnostic centres in Hong Kong. In

accordance with HKFRS 3 (Revised) Business Combinations, the Group is required to recognise the identifiable assets acquired,liabilities assumed and contingent liabilities that satisfy the recognition criteria at their fair value at the acquisition date.Accordingly, the Group undertook a purchase price allocation exercise to allocate the purchase consideration to the identifiable

assets acquired, liabilities assumed and contingent consideration at the acquisition date (Note 32).


– I-41.1 –


Impairment assessment of goodwill

Goodwill arising from business combination during the year ended 31 March 2020 is allocated to a group of CGUs

consisting of Hong Kong Imaging (also referred to as ‘‘Imaging and Diagnostic CGU’’), and is monitored by management at theImaging and Diagnostic CGU level for impairment test. Impairment test of goodwill is performed at each period end date, orwhenever there is impairment indicator.

The recoverable amount of the Imaging and Diagnostic CGU is determined by reference to the value-in-use calculationperformed by an independent valuer, Vincorn Consulting and Appraisal Limited.

In assessing the value-in-use calculation, references were made to the calculations using pre-tax cash flow projections based

on financial plans approved by management covering a forecast period of 5 years. Cash flows beyond the forecast period areextrapolated using the estimated terminal growth rates. Management assessed that no impairment provision is required as at 31March 2020 and 2021 and 30 September 2021. The key assumptions used for the cash flow projections (which are based on past

experience of the Group and external sources of market information) and the sensitivity analysis are disclosed as follows:

Key assumptions 31 March 2020

Revenue growth rates (year on year)— Year ending 31 March 2021 –15.7%— Years ending 31 March 2022 to 2025 3.5% to 24.6%




Key assumptions 31 March 2021

Revenue growth rates (year on year)— Year ending 31 March 2022 17.1%— Years ending 31 March 2023 to 2026 3.5% to 10.4%




Key assumptions 30 September 2021

Revenue growth rates (year on year)— Year ending 30 September 2022 15.5%— Years ending 30 September 2023 to 2026 3.5% to 11.3%

Gross margin ratio— Year ending 30 September 2022 22.4%— Years ending 30 September 2023 to 2026 25.6%— Terminal year 25.6%



The recoverable amount of the Imaging and Diagnostic CGU is estimated to exceed its carrying amount by approximatelyHK$3,436,000, HK$12,699,000 and HK$11,865,000 at 31 March 2020 and 2021 and 30 September 2021 respectively.


– I-42 –


Changing the discount rates and other assumptions selected by management in assessing impairment, including the growth

rates assumption in the cash flow projections, could materially affect the net present value used in the impairment test.

At 31 March 2020, if revenue growth rates (year on year), gross margin ratio, discount rate, and terminal growth rate foreach of the forecast years for Hong Kong Imaging had been 1.0%, 1.3%, 1.6%, and 0.7% respectively lower, lower, higher andlower than management’s estimates with all other variables held constant, the recoverable amount of Hong Kong Imaging would

have been equal to its carrying amount.

At 31 March 2021, if revenue growth rates (year on year), gross margin ratio, discount rate, and terminal growth rate for

each of the forecast years for Hong Kong Imaging had been 3.5%, 4.2%, 7.2%, and 2.6% respectively lower, lower, higher andlower than management’s estimates with all other variables held constant, the recoverable amount of Hong Kong Imaging wouldhave been equal to its carrying amount.

At 30 September 2021, if revenue growth rates (year on year), gross margin ratio, discount rate, and terminal growth rate

for each of the forecast years for Hong Kong Imaging had been 5.1%, 3.3%, 6.1%, and 9.9% respectively lower, lower, higher andlower than management’s estimates with all other variables held constant, the recoverable amount of Hong Kong Imaging wouldhave been equal to its carrying amount.


– I-42.1 –


With reasonably possible changes in key assumptions with all other variables held constant for each of the forecast years,

the carrying amount of the CGU would exceed its recoverable amount by:

31 March 2020 31 March 2021 30 September 2021

HK$’000 HK$’000 HK$’000

Revenue growth rates (year on year) decreased by

10% 842 — —

Gross margin ratio decreased by 10% 3,549 — —

Pre-tax discount rate increased by 10% 471 — —

Terminal growth rate decreased by 10% — — —

14 FINANCIAL INSTRUMENTS BY CATEGORY

The Group had the following financial instruments:

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Financial assets, at amortised costNon-current portionDeposits 2,055 2,591 7,078 5,526

Current portionTrade receivables 16,099 16,107 19,108 19,693Deposits and other receivables 678 3,319 4,037 5,501Amounts due from shareholders 137,143 36,116 4,145 5,199Amounts due from directors 27,130 51,535 1,600 2,361Amount due from the ultimate holding company 20 36 4 5Amount due from the immediate holding

company 10 18 — —

Cash and cash equivalents 39,771 159,860 95,267 112,645

220,851 266,991 124,161 145,404

222,906 269,582 131,239 150,930

Financial liabilities, at amortised costNon-current portionLease liabilities 9,328 7,199 75,541 66,885Bank borrowings — — — 70,228

9,328 7,199 75,541 137,113

Current portionTrade payables 5,444 6,307 6,111 6,148Other payables 6,841 17,658 22,700 27,615Lease liabilities 7,349 15,327 17,551 19,290Bank borrowings — — 75,000 8,199Amount due to a shareholder 279 — — —

Amount due to a related party 100 — — —

Dividend payable — 66,720 — —

20,013 106,012 121,362 61,252

29,341 113,211 196,903 198,365

The Group’s exposure to various risks associated with the financial instruments is discussed in Note 3.


– I-43 –


15 OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Non-current portionDeposits 2,055 2,591 7,078 5,526Prepayments — — 8,744 701

2,055 2,591 15,822 6,227

Current portionPrepayments 169 2,533 1,924 1,245Prepaid [REDACTED] expense — — [REDACTED] [REDACTED]Other receivables and deposits 678 3,319 4,037 5,501

847 5,852 10,347 12,238

Total 2,902 8,443 26,169 18,465

As at 31 March 2019, 2020 and 2021 and 30 September 2021, the carrying amounts of other receivables, deposits andprepayments approximated to their fair values and were denominated in HK$.

Other receivables, deposits and prepayments did not contain loss allowance and provision of impairment.

The maximum exposure to credit risk at the reporting date was the fair value of each class of receivables mentioned above.The Group did not hold any collateral as security.

16 DEFERRED INCOME TAX

The analysis of deferred tax assets and deferred tax liabilities is as follows:

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Deferred tax assetsDeferred tax assets to be recovered after

more than 12 months 812 1,505 2,731 2,071

Deferred tax liabilitiesDeferred tax liabilities to be recovered after

more than 12 months — (27) (20) (16)Deferred tax liabilities to be recovered within

12 months — (7) (7) (7)

— (34) (27) (23)


– I-44 –


Deferred income tax as at 31 March 2019, 2020 and 2021 are calculated in full on tax loss and temporary differences under

the liability method using the current taxation rate of 16.5%. The net movements in the deferred income tax accounts are asfollows:


2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

As at 1 April 29 812 1,471 1,471 2,704Credited/(charged) to the consolidated

statements of comprehensive income

(Note 9) 783 502 1,233 462 (656)Arising from business combination

(Note 32) — 157 — — —

As at 31 March/30 September 2021 812 1,471 2,704 1,933 2,048

The movements in deferred tax assets and liabilities without taking into consideration the offsetting of balances within the

same tax jurisdiction are as follows:

(a) Deferred tax assets

Property,plant andequipment

Impairmentloss on

Financialassets Tax loss Total

HK$’000 HK$’000 HK$’000 HK$’000

As at 1 April 2018 29 — — 29Credited to the consolidated statements of

comprehensive income 20 763 — 783

As at 31 March 2019 49 763 — 812

Arising from business combination (Note 32) 30 — 164 194Credited to the consolidated statements of

comprehensive income 448 — 51 499

As at 31 March 2020 527 763 215 1,505Credited to the consolidated statements of

comprehensive income 666 33 527 1,226

As at 31 March 2021 1,193 796 742 2,731(Charged)/credited to the consolidated statements of

comprehensive income (972) (9) 321 (660)

As at 30 September 2021 221 787 1,063 2,071


– I-45 –


(b) Deferred tax liabilities

Intangible assets

HK$’000

As at 1 April 2018 and 31 March 2019 —

Arising from business combination (Note 32) 37

Credited to the consolidated statements of comprehensive income (3)

As at 31 March 2020 34

Credited to the consolidated statements of comprehensive income (7)

As at 31 March 2021 27Credited to the consolidated statements of comprehensive income (4)

As at 30 September 2021 23

As at the end of the Track Record Period, the Group has deductible temporary difference of approximatelyHK$2,015,000. No deferred tax asset has been recognised in relation to such deductible temporary difference as it is notprobable that taxable profit will be available against which the deductible differences can be utilised. All the deferred tax

assets recognised in respect of tax losses can be carried forward indefinitely to set off against future taxable income.


– I-45.1 –


17 INVENTORIES

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Pharmaceutical goods and medical supplies 7,935 10,112 12,351 10,860

Inventories recognised as cost of sales during the years ended 31 March 2019, 2020 and 2021 and the six months ended 30

September 2020 and 2021 amounted to HK$33,502,000, HK$49,165,000, HK$46,019,000, HK$22,405,000 and HK$27,757,000respectively.

18 TRADE RECEIVABLES

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Trade receivables 20,721 20,879 24,080 24,610Less: allowance for impairment (Note 3.1(b)(ii)) (4,622) (4,772) (4,972) (4,917)

Total trade receivables, net 16,099 16,107 19,108 19,693

(a) The credit terms of trade receivables granted by the Group is generally 60 to 180 days. Ageing analysis based oninvoice date of the gross trade receivables at the respective reporting dates are as follows:

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Within 90 days 14,323 12,309 16,709 17,31591 to 180 days 2,405 1,753 1,678 1,686

181 days to 365 days 3,973 1,681 433 333Over 365 days 20 5,136 5,260 5,276

20,721 20,879 24,080 24,610

As at 31 March 2019, 2020 and 2021 and 30 September 2021, the carrying amounts of trade receivables approximated totheir fair values and were denominated in HK$.

The increase or decrease in the loss allowance of trade receivables for the years ended 31 March 2019, 2020 and 2021 and

the six months ended 30 September 2020 and 2021 are included in the impairment loss on financial assets in the consolidatedstatements of comprehensive income. The Group applies the HKFRS 9 simplified approach to measure expected credit loss whichuses a lifetime expected loss allowance for all trade receivables for the Track Record Period. The detailed impairment assessments

for the Track Record Period are summarised in Note 3.1(b)(ii).

The maximum exposure to credit risk at the reporting date was the fair value of each class of receivables mentioned above.

The Group did not hold any collateral as security.


– I-46 –


19 AMOUNTS DUE FROM SHAREHOLDERS

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Advances to Founding Shareholders (Note 34) 9,753 24,085 3,770 4,107Advances to other shareholders 2,390 12,031 375 1,092Capital contribution receivable from other

shareholders (Note 23) 125,000 — — —

Total 137,143 36,116 4,145 5,199

As at 31 March 2019, 2020 and 2021 and 30 September 2021, the carrying amounts of amounts due from shareholdersapproximated to their fair values and were denominated in HK$.

The amounts due from shareholders were interest-free, unsecured, repayable on demand, and non-trade in nature. [Thedirectors of the Company expect the balances to be settled in full before the [REDACTED].]

20 CASH AND CASH EQUIVALENTS

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Cash at bank 39,706 63,636 95,230 112,606

Cash on hand 65 51 37 39Short-term bank deposits — 96,173 — —

39,771 159,860 95,267 112,645

The Group’s cash and cash equivalents as at 31 March 2019, 2020 and 2021 and 30 September 2021 were denominated inHK$.

As at 31 March 2020, the effective interest rate of the Group’s short-term bank deposits was 2.32% per annum and the

deposits were with original maturity of less than three months.

The maximum exposure to credit risk was the carrying value of cash at bank as at 31 March 2019, 2020 and 2021 and 30September 2021 and short-term bank deposits as at 31 March 2020.

The carrying amount of the Group’s cash and cash equivalents approximated to its fair value as at 31 March 2019, 2020 and2021 and 30 September 2021.


– I-47 –


21 SHARE CAPITAL

Number ofordinary shares

Nominalvalue ofordinaryshares

HK$’000

Ordinary shares of HK$0.00001 eachAuthorisedAs at 21 September 2020 (date of incorporation), 31 March 2021 and 30 September 2021 38,000,000,000 380

Issued and fully paidAs at 21 September 2020 1 —*Issue of ordinary shares upon acquisition of the entire equity interests in CMH (Note) 1,073,306 —**

As at 31 March 2021 and 30 September 2021 1,073,307 —**

* Approximates HK$0.

** Approximates HK$11.

Note: The Company was incorporated in the Cayman Islands on 21 September 2020 with authorised share capital of HK$380,000

divided into 38,000,000,000 shares of a par value of HK$0.00001 each. On 23 October 2020, the Company acquired theentire share capital of CMH of 1,073,307 shares through allotment and issue of 1,073,306 shares of a par value ofHK$0.00001 each. For details, please refer to Note 1.2.

22 DIVIDENDS

Except for the dividends of HK$66,720,000 and HK$60,000,000 declared by CMH in February 2020 and October 2020respectively, no other dividend was declared by the companies comprising the Group throughout the Track Record Period. The

dividends declared were fully settled in October 2020.

No dividend was declared by the Company since its date of incorporation and throughout the Track Record Period.


– I-48 –


23 RESERVES

(a) Movement of the reserves


Capital reserve(Note i)

Share-basedpayment

reserve (Note ii)

Retainedearnings Total reserves

HK$’000 HK$’000 HK$’000 HK$’000

Balance 1 April 2018 9,648 — 21,345 30,993

Comprehensive incomeProfit and total comprehensive income for the year — — 59,960 59,960

Total comprehensive income — — 59,960 59,960

Transactions with ownersCapital contributions from the owners of the Group

(Note iii) 125,000 — — 125,000

Total transactions with owners 125,000 — — 125,000

Balance at 31 March 2019 and 1 April 2019 134,648 — 81,305 215,953

Comprehensive incomeProfit and total comprehensive income for the year — — 50,194 50,194

— — 50,194 50,194

Arising from business combination (Note v) 9,982 — — 9,982

Transactions with ownersShare-based payment expense — 530 — 530

Capital contributions from an owner of the Group(Note iv) 5 — — 5

Dividend declared — — (66,720) (66,720)

Total transactions with owners 5 530 (66,720) (66,185)

Balance at 31 March 2020 and 1 April 2020 144,635 530 64,779 209,944


– I-49 –



Capital reserve(Note i)

Share-basedpayment

reserve (Note ii)

Retainedearnings Total reserves

HK$’000 HK$’000 HK$’000 HK$’000

Balance at 31 March 2020 and 1 April 2020 144,635 530 64,779 209,944

Comprehensive incomeProfit and total comprehensive income

for the year — — 21,643 21,643

Transactions with ownersShare-based payment expense — 2,963 — 2,963Capital contributions from the owners of the Group, net of

transaction costs and tax (Note vi) 58,218 — — 58,218Dividend declared — — (60,000) (60,000)

Total transactions with owners 58,218 2,963 (60,000) 1,181

Balance at 31 March 2021 and 1 April 2021 202,853 3,493 26,422 232,768

Comprehensive incomeProfit and total comprehensive income for the period — — 15,270 15,270

Transactions with ownersShare-based payment expense — 1,862 — 1,862

Total transactions with owners — 1,862 — 1,862

Balance at 30 September 2021 202,853 5,355 41,692 249,900

(Unaudited)Balance at 31 March 2020 and 1 April 2020 144,635 530 64,779 209,944

Comprehensive incomeProfit and total comprehensive income for the period — — 13,869 13,869

Transactions with ownersShare-based payment expense — 845 — 845Capital contributions from owners of the Group, net of

transaction costs and tax (Note vi) 58,218 — — 58,218

Total transactions with owners 58,218 845 — 59,063

Balance at 30 September 2020 202,853 1,375 78,648 282,876

Notes:

(i) Capital reserve represents the share premium from capital contributions made by the Founding Shareholders, EquityPartners, Strategic Shareholders and New Investors during the Track Record Period.

(ii) Share-based payment reserve represents the recognition of share-based payment expense from the shares issued forconsultants’ services to the Group. Details of the share issuance are disclosed in Note (b) below.


– I-50 –


(iii) In March 2019, the New Investors subscribed for 125,000 newly issued shares of CMH at HK$125,000,000. The

funds were fully received during the year ended 31 March 2020.

(iv) In August 2019, 5,075 shares of CMH were issued at par to an Equity Partner.

(v) In October 2019, 9,844 shares of CMH were issued as part of the consideration for the acquisition of the Hong Kong

Imaging (Note 32).

(vi) In August 2020, the Group issued a total of 15,456 shares of CMH to two Equity Partners, and 42,932 shares ofCMH to Unicorn.

(b) Share-based payment reserve


2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Arising from shares issued on 1 August

2019 and 1 August 2020 (Note (i)) — 530 3,493 1,375 5,355

Note:

(i) The share-based payment reserve represents the share-based payment expense relating to the shares issued to the

consultants for their services rendered to Hong Kong Medical Consultants.


– I-50.1 –


Share-based payment expense is measured as the fair value of the shares issued at grant date less respective capital

contributions, if any, and is amortised over the service period, until the [REDACTED] plus 5 years, pursuant to therespective shareholder agreements with Hong Kong Medical Consultants. The fair values of the shares issued on 1 August2019 and 1 August 2020 were assessed by management with reference to the valuation performed by an independent valuer,

Vincorn Consulting and Appraisal Limited, using discounted cash flow model.

In assessing the fair value of the shares issued, references were made to the calculations using post-tax cash flowprojections based on financial plans approved by management covering a forecast period of 5 years. Cash flows beyond theforecast period are extrapolated using the estimated terminal growth rate. The key assumptions applied are as follows:

Valuation date 1 August 2019

Revenue growth rates (year on year) 9.0% to 25.7%Gross margin ratio 29.7% to 35.8%Post-tax discount rates 12.2%Terminal growth rate 3.5%

Valuation date 1 August 2020

Revenue growth rates (year on year) 5.8% to 34.8%Gross margin ratio 21.4% to 33.4%Post-tax discount rates 10.9%


(c) Reserves of the Company

Capitalreserves

Accumulatedloss

Totalreserves

HK$’000 HK$’000 HK$’000

As at 21 September 2020 — — —

Comprehensive lossLoss and total comprehensive loss for the year — (14,352) (14,352)

Transactions with ownersCapital reserves arising upon the acquisition of

subsidiary group (Note) 240,400 — 240,400

Total transactions with owners 240,400 — 240,400

Balance at 31 March 2021 240,400 (14,352) 226,048

Comprehensive lossLoss and total comprehensive loss for the period — (4,671) (4,671)

Balance at 30 September 2021 240,400 (19,023) 221,377

(Unaudited)As at 21 September 2020 — — —

Comprehensive lossLoss and total comprehensive loss for the period — — —

Transactions with ownersCapital reserves arising upon the acquisition of

subsidiary group (Note) 240,400 — 240,400

Total transactions with owners 240,400 — 240,400

Balance at 30 September 2020 240,400 — 240,400


– I-51 –


Note: As disclosed in Note 1.2, on 23 October 2020, the Company acquired the entire equity interests in CMH by issuing1,073,306 ordinary shares of HK$0.00001 each to its then shareholders in the proportion of their respective interests

in CMH. The Company then became the holding company of the companies now comprising the Group. Investmentin the companies now comprising the Group are carried at cost on the acquisition date, the capital reservesrepresented the difference between the cost and the nominal value of the shares issued.


– I-51.1 –


24 PROVISION FOR RE-INSTATEMENT COSTS

The Group is required to restore the leased premises of its medical centres and headquarter to their original condition at the

end of the respective lease terms. A provision is recognised for the present value of the estimated expenditure required to removeany leasehold improvements. These costs are capitalised as part of the right-of-use assets and are amortised over the shorter of theterm of the leases or the useful lives of the assets.

Movements of provision for re-instatement costs during the Track Record Period are set out below:


2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

At beginning of the year/period 790 1,163 3,059 3,059 3,153Arising from business combination

(Note 32) — 1,164 — — —

Provision for re-instatement costs recognised 343 679 — — 1,806Payment of re-instatement provision for

actual usage — — — — (1,656)

1,133 3,006 3,059 3,059 3,303Charged to consolidated statements of

comprehensive income

— unwinding of discounting impact(Note 7) 30 53 94 38 34

At end of the year/period 1,163 3,059 3,153 3,097 3,337

25 LEASE LIABILITIES

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Minimum lease payments due

— Within 1 year 7,853 16,006 21,442 22,741— Between 1 and 2 years 7,633 6,753 19,545 17,605— Between 2 and 5 years 1,958 627 50,398 50,463

— Over 5 years — — 13,980 5,592

17,444 23,386 105,365 96,401Less: future finance charges (767) (860) (12,273) (10,226)

Present value of lease liabilities 16,677 22,526 93,092 86,175


– I-52 –


As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Within 1 year 7,349 15,327 17,551 19,290Between 1 and 2 years 7,405 6,589 16,509 14,916Between 2 and 5 years 1,923 610 45,336 46,429

Over 5 years — — 13,696 5,540

16,677 22,526 93,092 86,175

The total cash outflows for leases including payments of lease liabilities, payments of interest expenses on leases andpayments of short-term lease expenses for the years ended 31 March 2019, 2020 and 2021 and the six months ended 30 September2020 and 2021 were HK$9,506,000, HK$16,593,000, HK$21,198,000, HK$10,402,000 and HK$11,397,000 respectively.


– I-52.1 –


26 TRADE PAYABLES

Trade payables were non-interest-bearing.

The ageing analysis of trade payables based on recognition date is as follows:

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

0–30 days 4,588 5,415 4,854 5,098

31–60 days 815 875 1,134 89761–90 days 18 14 97 115Over 90 days 23 3 26 38

5,444 6,307 6,111 6,148

As at 31 March 2019, 2020 and 2021 and 30 September 2021, the carrying amounts of trade payables approximated to theirfair values.

The Group’s trade payables as at 31 March 2019, 2020 and 2021 and 30 September 2021 were denominated in HK$.

27 ACCRUALS AND OTHER PAYABLES

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Payables to consultants 6,508 16,434 15,042 14,780Accrued employee benefits 161 769 1,481 1,435Payables for property, plant and equipment — 437 — 2,515

Payables to radiologists — 188 593 1,403Payable for property agency commission — — 1,500 —

[REDACTED] expense payables — — [REDACTED] [REDACTED]

Accrued auditors’ remuneration 1,079 835 896 708Others 333 599 887 2,345

8,081 19,262 25,077 29,757

The Group’s accruals and other payables as at 31 March 2019, 2020 and 2021 and 30 September 2021 were denominated inHK$.

The accruals and other payables as at 31 March 2019, 2020 and 2021 30 September 2021 were interest-free, unsecured, and

repayable on demand.

28 AMOUNT DUE TO A SHAREHOLDER

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Amount due to a shareholder 279 — — —

279 — — —

As at 31 March 2019, the carrying amount of amount due to a shareholder approximated to its fair values and wasdenominated in HK$.


– I-53 –


The amount due to a shareholder as at 31 March 2019 was interest-free, unsecured, repayable on demand, and non-trade in

nature.

29 BANK BORROWINGS

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Long-term mortgage loan — — 75,000 73,427Revolving loan — — — 5,000

Total borrowings, secured — — 75,000 78,427Less: amount due on demand or within one year

shown under current liabilities — — (75,000) (8,199)

Non-current portion — — — 70,228

Bank borrowings as at 31 March 2021 and 30 September 2021 are secured, interest-bearing at one-month HIBOR plus

1.65% per annum for the mortgage loan and one-month HIBOR plus 2.1% per annum for the revolving loan, and are denominatedin HK$. The long-term mortgage loan will mature in 2041; whilst the revolving loan will mature in December 2021.

The Group’s bank borrowings were repayable as follows:

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Within 1 year — — 3,151 8,199

Between 1 and 2 years — — 3,207 3,236Between 2 and 5 years — — 9,967 10,058Over 5 years — — 58,675 56,934

— — 75,000 78,427

The above amounts due were based on the scheduled repayment dates set out in the loan agreement and ignore the effect of

any repayment on demand clause.

As at 31 March 2021 and 30 September 2021, the Group has complied with the covenants of the loan facilities.

(a) Secured liabilities and assets pledged as security

As at 31 March 2021 and 30 September 2021, the Group’s bank borrowings were secured by a corporate guarantee

from the Company and charges over the Group’s leasehold land and building.

(b) Risk exposure

Details of the Group’s exposure to risks arising from the bank borrowings are set out in Note 3.1.

(c) Undrawn facilities

As at 31 March 2021 and 30 September 2021, the Group had aggregate banking facilities of HK$105,000,000 andHK$103,427,000 respectively for mortgage loan and revolving loan. Unused facility as at the same dates amounted to

HK$30,000,000 and HK$25,000,000 respectively.


– I-54 –


30 CASH FLOW INFORMATION

(a) Cash generated from operations


2019 2020 2021 2020 2021


Profit before income tax 71,619 59,182 26,789 16,967 20,284Adjustments for:— Amortisation of intangible asset

(Note 13) — 19 45 14 23— Depreciation of property, plant

and equipment (Note 11) 2,859 6,133 6,367 3,217 3,954— Depreciation of right-of-use assets

(Note 12) 8,175 14,667 19,133 8,160 13,427— Provision/(reversal of provision)

for impairment losses on financialassets 4,622 150 200 — (55)

— Share-based payment expenses — 530 2,963 845 1,862— Finance income (Note 7) (35) (2,436) (1,199) (815) (40)— Finance costs (Note 7) 649 1,051 1,441 461 2,765— (Gain)/loss on disposal of

property, plant and equipment — — (14) — 963— Gain on lease modification — — (3) — —

87,889 79,296 55,722 28,849 43,183

Changes in working capital:— Inventories (4,369) (1,823) (2,239) (702) 1,491

— Trade receivables (12,702) 3,919 (3,201) (3,092) (530)— Other receivables, deposits and

prepayments (685) (2,191) (1,224) (1,240) 7,898— Contract liabilities 323 20 2,516 47 (2,572)

— Trade payables 1,275 559 (196) 1,024 37— Accruals and other payables 7,323 10,001 4,315 635 2,165— Amount due to a related company 100 (100) — — —

Cash generated from operations 79,154 89,681 55,693 25,521 51,672

(b) Material non-cash transaction

In April and October 2020, dividend settlement of HK$44,742,000 and HK$42,473,000 respectively were net off

with amounts due from shareholders and directors.

(c) Net debt reconciliation

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Cash and cash equivalents (Note 20) 39,771 159,860 95,267 112,645Lease liabilities (16,677) (22,526) (93,092) (86,175)

Bank borrowings — — (75,000) (78,427)Amounts due to shareholders (279) — — —

Dividend payable — (66,720) — —

Net cash/(debt) 22,815 70,614 (72,825) (51,957)


– I-55 –


Other assets Liabilities from financing activities

Cash andcash

equivalentsBank

borrowings

Amountdue to a

shareholderDividendpayable

Leaseliabilities Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

As at 1 April 2018 14,106 — (4,057) — (11,106) (1,057)Net cash flows 25,665 — 3,778 — 8,532 37,975

Addition of lease liabilities — — — — (6,235) (6,235)Lease modification — — — — (7,249) (7,249)Other non-cash activities — — — — (619) (619)

As at 31 March 2019 39,771 — (279) — (16,677) 22,815

As at 1 April 2019 39,771 — (279) — (16,677) 22,815Net cash flows 107,395 — 279 — 15,438 123,112Addition of lease liabilities — — — — (8,805) (8,805)

Arising from business combination(Note 32) 12,694 — — — (9,543) 3,151

Lease modification — — — — (1,941) (1,941)Other non-cash activities — — — (66,720) (998) (67,718)

As at 31 March 2020 159,860 — — (66,720) (22,526) 70,614

As at 1 April 2020 159,860 — — (66,720) (22,526) 70,614Net cash flows (64,593) (75,000) — 39,505 16,899 (83,189)

Addition of lease liabilities — — — — (86,232) (86,232)Dividend declared (Note 22) — — — (60,000) — (60,000)Dividend settled by netting off with

amounts due from shareholders and

directors (Note 30(b)) — — — 87,215 — 87,215Lease modification — — — — 114 114Other non-cash activities — — — — (1,347) (1,347)

As at 31 March 2021 95,267 (75,000) — — (93,092) (72,825)

As at 1 April 2021 95,267 (75,000) — — (93,092) (72,825)Net cash flows 17,378 (2,750) — — 9,107 23,735Addition of lease liabilities — — — — (136) (136)

Interest paid — (677) — — — (677)Other non-cash activities — — — — (2,054) (2,054)

As 30 September 2021 112,645 (78,427) — — (86,175) (51,957)

Note: On 18 May 2018, the Group acquired HK Brain Memory at a consideration of HK$1. The acquisition of HK Brain

Memory did not fulfil the definition of business combination as defined in HKFRS 3 (Revised) BusinessCombinations and the acquisition of Central Healthcare Limited is accounted for as assets acquisition. No cash andcash equivalents were acquired by the Group on 18 May 2018.


– I-56 –


(d) Proceeds from disposal of property, plant and equipment

As at 31 MarchSix months ended30 September

2019 2020 2021 2020 2021


Net book amount (Note 11) — — — — 977Gain/(loss) on disposal of property,

plant and equipment — — 14 — (963)

— — 14 — 14

31 CONTINGENCIES

The Group did not have any material contingent liabilities as at 31 March 2019, 2020 and 2021 and 30 September 2021.

32 BUSINESS COMBINATION

It is the Group’s strategy to identify suitable investment opportunity to expand the business of the Group with goodprospects and potential for stable returns through acquisition. On 30 October 2019, Smart Winner, one of the indirectly wholly-owned subsidiaries of the Company, acquired 100% equity interest in HKID Limited through acquiring 100% equity interest inPixel, 94% equity interest in Pegasus from several independent third parties and 6% equity interest in Pegasus from Mrs. Tsang(the ‘‘Acquisition’’). After the completion of the acquisitions, Smart Winner directly holds 100% equity interest in Pixel andPegasus, and indirectly holds 100% equity interest in HKID, 51% equity interest in HKID (Lab) and 51% equity interest in HKID(MRI), respectively.

The following summarises the consideration paid to acquire HKID Limited, and the fair values of the net assets acquiredand liabilities assumed at the acquisition date:

HK$’000

Consideration (Note (i))Cash 22,029Equity instruments of the Group (Note (ii)) 9,982

32,011Recognised amounts of fair value of identifiable assets acquired and liabilities assumedProperty, plant and equipment 2,799Right-of-use assets 9,543Intangible asset — customer relationship 226Deferred tax assets 194Inventories 354Trade receivables 4,077Other receivables, deposits and prepayments 1,928Cash and cash equivalents 12,694Trade and other payables and accruals (1,047)Income tax payables (655)Lease liabilities (9,543)Provision for re-instatement costs (1,164)Deferred tax liabilities (37)

Total identifiable net assets 19,369Non-controlling interests 5,013

Goodwill 17,655

Net cash outflow used in the acquisitionCash consideration (22,029)Cash and cash equivalents acquired 12,694

(9,335)


– I-57 –


The goodwill is attributable to the workforce and the expected synergies from combining operations of the HKID Business

and the HKMC Business. It will not be deductible for tax purposes.

There were no other material business combinations during the Track Record Period.

Note (i): The Acquisition consists of a contractual arrangement about performance guarantee with Dr. Ooi Gaik Cheng

(‘‘Dr. Ooi’’), who is the largest shareholder of Hong Kong Imaging before the Acquisition. Pursuant to the saleand purchase agreement of Pixel between Smart Winner and Dr. Ooi, Dr. Ooi irrevocably warrants andundertakes to Smart Winner for a minimum aggregate consolidated net income (‘‘Performance Target’’) of Hong

Kong Imaging for the two financial years since the acquisition date (‘‘Measurement Period’’). The MeasurementPeriod is subject to extension in case of certain conditions as stipulated in the sale and purchase agreement. Inthe event of failing to meet the Performance Target by the end of the Measurement Period, Smart Winner is

entitled to receive cash compensation from Dr. Ooi. This arrangement is recognised as a financial asset at fairvalue through profit or loss since the date of the Acquisition and the fair value at acquisition date is minimal. Fordetails of the assumptions and disclosure on the performance guarantee arrangement, please refer to Note 3.3.

Note (ii): The equity instruments of the Group represented 9,844 shares of CMH issued as part of the consideration paidfor the Acquisition. The fair value of the equity instruments issued was assessed by management with reference

to the valuation performed by an independent valuer, Vincorn Consulting and Appraisal Limited, usingdiscounted cash flow model as at the acquisition date.

Note (iii): Acquired receivables

Both fair value and gross contractual amount of acquired receivables is HK$5,906,000. There is no lossallowance recognised on acquisition.

Note (iv): Accounting policy choice for non-controlling interests

The Group recognises non-controlling interests in an acquired entity either at fair value or at the non-controlling

interest’s proportionate share of the acquired entity’s net identifiable assets. This decision is made on anacquisition-by-acquisition basis. For the non-controlling interests in Hong Kong Imaging, the Group elected torecognise the non-controlling interests at its proportionate share of the acquired net identifiable assets. See Note

2.3 for the Group’s accounting policies for business combinations.

Note (v): Revenue and profit contribution

The acquired business contributed revenues of HK$12,929,000 and net loss of HK$2,363,000 to the Group forthe period from 30 October 2019 to 31 March 2020. Had the Hong Kong Imaging been consolidated from 1

April 2019, the Group’s consolidated statements of comprehensive income would show pro-forma revenue ofHK$277,072,000 and profit of HK$49,424,000 for the year ended 31 March 2020.

Note (vi): Acquisition-related costs

Acquisition-related costs of HK$100,000 that were not directly attributable to the issue of shares are included in

administrative expenses in the consolidated statements of comprehensive income and in operating cash flows inthe consolidated statements of cash flow.

33 COMMITMENTS

(a) Capital commitments

As at 31 March 2021, the Group entered into contracts for the purchase of office equipment, medical equipment andleasehold improvements of a clinic, the amounts contracted but not provided for were approximately HK$455,000,HK$2,179,000 and HK$10,973,000 respectively.

Except for the above, there were no other capital commitments as at 31 March 2019, 2020 and 2021 and 30

September 2021.


– I-58 –


(b) Lease commitments

The future aggregate minimum lease payments under non-cancellable leases with lease term less than 1 year are as

follows:

As at 31 MarchAs at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

With lease terms within one year — 3,089 659 959

(c) Lease committed but not yet commenced

There was no lease committed but not yet commenced as at 31 March 2019, 2020 and 2021 and 30 September 2021.

34 RELATED PARTY TRANSACTIONS

Parties are considered as related if one party has the ability, directly or indirectly, to control the other party or exercisesignificant influence over the other party in making financial and operating decisions. Parties are also considered to be related if

they are subject to common control or common significant influence.

In the opinion of the directors of the Company, the related party transactions were carried out in the normal course ofbusiness and at terms negotiated between the Company and the respective related parties.

The following companies are significant related parties of the Company that had transactions and/or balances with theGroup during the Track Record Period or as at each reporting date.

Name Relationship with the Group

Dr. Kenneth Tsang Controlling Shareholder and Director of the CompanyDr. Adam Leung Director of the CompanyMr. Shiu Director of the Company

Mrs. Chen Director of the CompanyDr. Jason Fong One of the key management personnel of the CompanyDr. Jenny Tsang One of the key management personnel of the CompanyDr. Chu Leung Wing One of the key management personnel of the Company

Euto Holdings Limited (‘‘Euto Holdings’’) Entity controlled by a director of the CompanyMrs. Tsang A close family member of the Controlling ShareholderHong Kong Imaging A group of companies in which the Controlling Shareholder held

significant influence before business combination (Note 32)


– I-59 –


The following transactions were carried out between the Group and its related parties during the Track Record Period atterms determined and agreed by the Group and the counter-parties:

(a) Provision of management services, purchases of consultancy services, purchase of imaging and diagnosticservices, acquisition of subsidiaries, provision of benefits in kind


2019 2020 2021 2020 2021


Consultancy fee paid to— Euto Holdings (Note (i)) 100 — — — —

Purchase of imaging and diagnosticservices— Hong Kong Imaging (Note (ii)) 2,227 1,481 — — —

Purchase consideration for theacquisition of subsidiaries paid to— Mrs. Tsang (Note (iii)) — 937 — — —

Benefit-in-kind— Dr. Jenny Tsang (Note (iv)) 831 899 995 595 510

Notes:

(i) This represents consultancy fee paid to a related company for business consultation services provided by the relatedcompany.

(ii) This represents purchase of imaging and diagnostic services from Hong Kong Imaging during the years ended 31March 2019 and 2020 respectively. The transactions for imaging and diagnostic services with Hong Kong Imagingare eliminated after the completion of business combination on 30 October 2019 (Note 32).

(iii) This represents cash paid to Mrs. Tsang for the acquisition of subsidiaries during the year ended 31 March 2020

(Note 32).

(iv) This represents the benefit-in-kind to Dr. Jenny Tsang for specialist medical services during the years ended 31

March 2019, 2020 and 2021 and six months ended 30 September 2021 respectively.

(b) Key management compensation

Key management personnel are deemed to be the Chief Executive, Executive Director and Founding Shareholders

who have the responsibilities for the planning, directing, controlling and the execution of the activities of the Group.


2019 2020 2021 2020 2021

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

(Unaudited)

Fees, wages, salaries, bonus — — — — —

Retirement benefits costs — definedcontribution scheme — — — — —

Allowances and benefits in kind 831 899 995 595 510

831 899 995 595 510


– I-60 –


(c) Year-end balances with related parties

(i) Balances due from related parties

As at 31 March

As at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Amounts due from directors 27,130 51,535 1,600 2,361

Amounts due from Founding

Shareholders (Note 19) 9,753 24,085 3,770 4,107

Amount due from the ultimate

holding company 20 36 4 5

Amount due from the immediate

holding company 10 18 — —

36,913 75,674 5,374 6,473

Maximum balances outstanding during the years ended 31 March 2019, 2020 and 2021 and 30 September

2021 were as follows:

Year ended 31 March

Six months

ended

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Amounts due from directors 27,130 51,535 59,072 2,361

Amounts due from Founding Shareholders 9,753 24,085 16,907 4,244

Amount due from the ultimate holding

company 20 36 36 6

Amount due from the immediate holding

company 10 18 18 —

The amounts due from these related parties as at 31 March 2019. 2020 and 2021 and 30 September 2021 were

interest-free, unsecured, repayable on demand, and non-trade in nature. [The directors of the Company expect the

balances to be settled in full before the proposed [REDACTED].] No provisions were made against receivables from

these related parties as at 31 March 2019, 2020 and 2021 and 30 September 2021. The carrying values of amounts

due from these related parties as at 31 March 2019, 2020 and 2021 and 30 September 2021 approximated to their fair

values and were denominated in HK$.

(ii) Balances due to related parties

Group

As at 31 March

As at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Amount due to a related company 100 — — —

100 — — —


– I-61 –


The amount due to a related company as at 31 March 2019 was interest-free, unsecured, repayable on demand

and trade in nature. The carrying value of amount due to a related company as at 31 March 2019 approximated to its

fair value and was denominated in HK$.

Company

As at 31 March

As at

30 September

2019 2020 2021 2021

HK$’000 HK$’000 HK$’000 HK$’000

Amount due to a subsidiary — — 14,000 18,137

The amount due to a related party was interest-free, unsecured and repayable on demand and denominated in

HK$. The carrying amount of the balance as at 31 March 2021 and 30 September 2021 approximated to fair value

due to its short maturity.

35 SUBSEQUENT EVENTS

The Company has declared and paid a dividend of HK$20,392,833 in aggregate on 10 December 2021 to shareholders

whose names appear on the register of members of the Company as of the same date.

III SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Company since its date of incorporation

and up to the date of this report. For other companies now comprising the Group, no audited financial

statements have been prepared in respect of any period subsequent to 30 September 2021 and up to the

date of this report.


– I-62 –


The following information does not form part of the Accountant’s Report prepared by

PricewaterhouseCoopers, Certified Public Accountants, the reporting accountant of the Company, as

set out in Appendix I to this document, and is included herein for information only. The unaudited pro

forma financial information should be read in conjunction with the section headed ‘‘Financial

Information’’ and the Accountant’s Report set out in Appendix I to this document.

A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NETTANGIBLE ASSETS

The following unaudited pro forma statement of adjusted consolidated net tangible assets of the

Group prepared in accordance with Rule 4.29 of the Listing Rules for illustrating purposes only, and is

set out below to illustrate the effect of the [REDACTED] on the consolidated net tangible assets of the

Group attributable to the owners of the Company as at 30 September 2021 as if the [REDACTED] had

taken place on 30 September 2021.

The unaudited pro forma statement of adjusted consolidated net tangible assets has been prepared

for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the

consolidated net tangible assets of the Group had the [REDACTED] been completed as at 30 September

2021 or at any future dates.

Auditedconsolidated nettangible assets of

the Groupattributable to the

owners of theCompany as at30 September

2021(1)

Estimated[REDACTED]

from the[REDACTED](2)

Unaudited proforma adjustedconsolidated nettangible assets of

the Groupattributable to

the owners of theCompany as at30 September

2021

Unaudited proforma adjustedconsolidated nettangible assetsof the Group

attributable to theowners of theCompany per

Share(3)

HK$’000 HK$’000 HK$’000 HK$

Based on an [REDACTED]

of HK$[REDACTED] per

Share 232,106 [REDACTED] [REDACTED] [REDACTED]

Based on an [REDACTED]

of HK$[REDACTED] per

Share 232,106 [REDACTED] [REDACTED] [REDACTED]

Notes:

(1) The audited consolidated net tangible assets attributable to the owners of the Company as at 30 September 2021 isextracted from the Accountant’s Report included in Appendix I to this document, which is based on the auditedconsolidated net assets of the Group attributable to the owners of the Company as at 30 September 2021 ofapproximately HK$249,900,000 with an adjustment for the intangible assets of the Group as at 30 September 2021 ofapproximately HK$17,794,000.

(2) The estimated [REDACTED] from the [REDACTED] are based on [REDACTED] [REDACTED] and the indicative[REDACTED] of HK$[REDACTED] per Share and HK$[REDACTED] per Share, being low and high end of theindicative [REDACTED], after the deduction of the estimated [REDACTED] fees and other [REDACTED] relatedexpenses paid/payable by the Company (excluding [REDACTED] expenses of approximately HK$[REDACTED]which have been accounted for prior to 30 September 2021), and takes no account of any Shares which may beallotted and issued upon the exercise of the [REDACTED].

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

– II-1 –


(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after the adjustmentsreferred to in the preceding paragraphs and on the basis that [REDACTED] Shares were in issue assuming that the[REDACTED] and the [REDACTED] has been completed on 30 September 2021 but does not take into account ofany Shares to be issued pursuant to the exercise of the [REDACTED], any Shares which may be granted under theShare Option Scheme and any Shares that may be issued and repurchased by the Company pursuant to the generalmandates.

(4) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of the Group toreflect any trading results or other transactions of the Group entered into subsequent to 30 September 2021. Inparticular, the unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the Companydoes not take into account the pre-[REDACTED] dividend of HK$20,392,833 declared in December 2021. Had suchissue of Shares and pre-[REDACTED] dividend been taken into account, the unaudited consolidated pro formaadjusted net tangible assets per Share would be HK$[REDACTED] and HK$[REDACTED], assuming the indicative[REDACTED] of HK$[REDACTED] per Share and HK$[REDACTED] per Share respectively.


– II-2 –


[REDACTED]


– II-3 –


[REDACTED]


– II-4 –


[REDACTED]


– II-5 –


The following is the text of a valuation report prepared for the purpose of incorporation in this

document received from Knight Frank Petty Limited (‘‘Knight Frank’’), an independent valuer, in

connection with their valuation as at 30 September 2021 of the Property held by the Group.

Knight Frank Petty Limited

4/F, Shui On Centre

6–8 Harbour Road

Wanchai, Hong Kong

[.]

The Board of Director

Hong Kong Medical Consultants Holdings Limited

13/F, Pacific House,

No. 20 Queen’s Road Central,

Hong Kong

Dear Sirs,

VALUATION IN RESPECT OF THE 6TH FLOOR, EURO TRADE CENTRE, NOS. 13–14CONNAUGHT ROAD CENTRAL & NOS. 21–23 DES VOEUX ROAD CENTRAL, HONG KONG(THE ‘‘PROPERTY’’).

INSTRUCTIONS

In accordance with the instructions for us to value the Property held by Hong Kong Medical

Consultants Holdings Limited (hereinafter referred to as the ‘‘Company’’, together with its subsidiaries,

hereinafter together referred to as the ‘‘Group’’), we confirm that we have carried out inspection, made

relevant enquiries and carried out searches and obtained such further information as we consider

necessary for the purpose of providing you with our opinion of the market value of the Property in

existing state as at 30 September 2021 (the ‘‘Valuation Date’’) for the purpose of incorporation in this

document. Our valuation is undertaken by qualified valuer with relevant experiences as an independent

valuer. Our valuation is prepared in unbiased and professional manner.

We confirm that we do not have any material connection or involvement giving rise to a conflict

of interest and are providing an objective and unbiased valuation. Our valuation is based on 100% of the

leasehold interest of the Property.

BASIS OF VALUATION

In arriving at our opinion of the market value, we followed ‘‘The HKIS Valuation Standards 2020’’

issued by The Hong Kong Institute of Surveyors (‘‘HKIS’’) and ‘‘The RICS Valuation — Global

Standards 2020’’ issued by the Royal Institution of Chartered Surveyors (‘‘RICS’’). Under the said

standards, Market Value is defined as:

‘‘the estimated amount for which an asset or liability should exchange on the valuation date

between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and

where the parties had each acted knowledgeably, prudently and without compulsion.’’

APPENDIX III PROPERTY VALUATION REPORT

– III-1 –


‘‘the estimated exchange price of an asset without regard to the seller’s costs of sale or the buyer’s

costs of purchase and without adjustment for any taxes payable by either party as a direct result of the

transaction.’’

Market value is the most probable price reasonably obtainable in the market on the valuation date

in keeping with the market value definition. It is the best price reasonably obtainable by the seller and

the most advantageous price reasonably obtainable by the buyer. This estimate specifically excludes an

estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale

and leaseback arrangements, special considerations or concessions granted by anyone associated with the

sale, or any element of value available only to a specific owner or purchaser.

Our valuation complies with the requirements set out in ‘‘The HKIS Valuation Standards 2020’’

issued by HKIS, ‘‘RICS Valuation — Global Standards 2020’’ issued by RICS and the Chapter 5 of the

Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited.

VALUATION METHODOLOGY

Our valuation has been undertaken using appropriate valuation methodology and our professional

judgement. In our valuation, we have adopted Market Approach by made reference to the recent market

sales evidence which is available in the open market. Appropriate adjustments have been made in our

valuation to reflect the differences in the characteristics between the Property and the comparable

properties such as location, time, size, building age, layout, ancillary facilities and quality in arriving at

our opinion on the market value.

VALUATION ASSUMPTIONS AND CONDITIONS

Our valuation is subject to the following assumptions and conditions.

Title Documents and Encumbrances

In our valuation, we have assumed a good and marketable title and that all documentation is

satisfactorily drawn. We have also assumed that the Property is not subject to any unusual or onerous

covenants, restrictions, encumbrances or outgoing.

Disposal Costs and Liabilities

No allowance has been made in our report for any charges, mortgages or amounts owing on the

Property nor for any expenses or taxation which may be incurred in effecting a sale.

Sources of Information

We have relied to a very considerable extent on information given by the Company. We have

accepted advice given to us on such matters as statutory notice, easement, land tenure, occupancy status,

floor areas and all other relevant matters. We have not verified the correctness of any information,

including their translation supplied to us concerning this Property, whether in writing or verbally by

yourselves, your representatives or by your legal or professional advisers or by any (or any apparent)

occupier of the Property or contained on the register of title. We assume that this information is

complete and correct.


– III-2 –


Inspection

We have inspected the Property on 23 November 2020 by Mr. Cyrus Fong, MRICS MHKIS

MCIREA RPS(GP) RICS Registered Valuer. Nevertheless, we have assumed in our valuations that the

Property was in satisfactory exterior and interior decorative order without any unauthorised extension or

structural alterations or illegal uses as at the Valuation Date, unless otherwise stated.

Identity of the Property to be Valued

We have exercised reasonable care and skill to ensure that the Property, identified by the Property

address in your instructions, is the Property inspected by us and contained within our valuation report. If

there is ambiguity as to the Property address, or the extent of the Property to be valued, this should be

drawn to our attention in your instruction or immediately upon receipt of our report.

Property Insurance

We have valued the Property on the assumption that, in all respects, it is insurable against all usual

risks including terrorism, flooding and rising water table at normal, commercially acceptable premiums.

Areas and Age

In our valuations, we have relied upon areas provided to us. We have also assumed that the

measurements and dimensions shown on the documents handed to us are correct and in approximations

only. We have scaled off the floor areas from the approved building plans in accordance with the Code

of Measuring Practice by the Hong Kong Institute of Surveyors.

Structural and Services Condition

We have carried out visual inspection only without any structural investigation or building survey.

During our limited inspection, we did not inspect any inaccessible areas. We are unable to confirm

whether the Property is free from urgent or significant defects or items of disrepair or any deleterious

materials have been used in the construction of the Property. Our valuation has therefore been

undertaken on the assumption that the Property was in satisfactory repair and condition and contains no

deleterious materials and it is sound order and free from structural faults, rot, infestation or other

defects, and that the services are in satisfactory condition.

Ground Condition

We have assumed there to be no unidentified adverse ground or soil conditions and that the load

bearing qualities of the site of the Property are sufficient to support the building constructed or to be

constructed thereon; and that the services are suitable for any existing or future development. Our

valuation is therefore prepared on the basis that no extraordinary expenses or delays will be incurred in

this respect.

Environmental Issues

We are not environmental specialists and therefore we have not carried out any scientific

investigations of sites or buildings to establish the existence or otherwise of any environmental

contamination, nor have we undertaken searches of public archives to seek evidence of past activities

that might identify potential for contamination. In the absence of appropriate investigations and where


– III-3 –


there is no apparent reason to suspect potential for contamination, our valuation is prepared on the

assumption that the Property is unaffected. Where contamination is suspected or confirmed, but adequate

investigation has not been carried out and made available to us, then the valuation will be qualified.

Compliance with Relevant Ordinances and Regulations

We have assumed the Property was constructed, occupied and used in full compliance with, and

without contravention of any ordinance, statutory requirement and notices except only where otherwise

stated. We have further assumed that, for any use of the Property upon which this report is based, any

and all required licences, permits, certificates, consents, approvals and authorisation have been obtained,

expected only where otherwise stated.

Valuation assumption

We have assumed that the owner of the Property is free and uninterrupted rights to use and assign

the Property during the whole of the unexpired land-lease term granted subject to the payment of usual

Government Rent.

Remarks

Unless otherwise stated, all money amounts stated in our valuations are in Hong Kong Dollars

(HK$).

Area Conversion

The area conversion factors in this report are taken as follows:

1 sq.m. = 10.764 sq.ft.

We enclose herewith our valuation report.

Limitations on Liability

This report is confidential to the addressee for the specific purpose to which it refers. It may be

disclosed to other professional advisers assisting the addressee in respect of the purposes, but the

addressee shall not disclose the report to any other person. Neither the whole, or any part of this report

and valuation, nor any reference thereto may be included in any documents, circular or statement nor

published in any way whatsoever whether in hard copy or electronically (including on any web site)

without our written approval of the form and context in which it will appear.

No claim arising out of or in connection with this valuation report may be brought against any

member, employee, partner, director or consultant of Knight Frank. Those individuals will not have a

personal duty of care to any party and any claim for losses must be brought against Knight Frank.

In accordance with our standard practice, we must state that this report and valuation is for the use

of the party to whom it is addressed and no responsibility is accepted to any third party for the whole or

any part of its contents. We do not accept liability to any third party or for any direct or indirect

consequential losses or loss of profits as a result of this report.

In our valuations, Knight Frank has prepared the valuation based on information and data available

to us as at the Valuation Date. While current market is influenced by various policies and regulations,

increased complexity in social movements and international trade tensions geopolitics, has also resulted

in more fluctuations in real estate market. It must be recognised changes in policy direction, mortgage


– III-4 –


requirements, social and international tensions could be immediate and have sweeping impact on the real

estate market apart from typical market variations. It should therefore be noted that any market

violation, policy, geopolitical and social changes or other unexpected incidents after the valuation date

may affect the value of the Property.

Yours faithfully,For and on behalf of

Knight Frank Petty Limited

Natalie WongMRICS MHKIS RPS(GP) RICS Registered Valuer

Cyrus FongFRICS FHKIS MCIREA RPS(GP) RICS Registered Valuer

Senior Director, Valuation & Advisory Senior Director, Valuation & Advisory

Note: Ms. Natalie Wong is a qualified valuer who has 16 years of extensive experiences in valuation of properties in the PRC,

Hong Kong, Macau and Asia Pacific region.

Mr. Cyrus Fong is a qualified valuer who has 15 years of extensive experiences in valuation of properties in the PRC,

Hong Kong, Macau and Asia Pacific region.


– III-5 –


VALUATION

Property Description Particulars of occupancy

Market Value of theProperty in existing stateas at 30 September 2021

6th Floor, Euro TradeCentre, Nos. 13–14

Connaught RoadCentral & Nos. 21–23 Des Voeux Road

Central, Hong Kong.

(137/5,675 shares ofand in the subject

lot).

The Property comprises an office floor ofa 25-storey office building, including

a level of basement, known as EuroTrade Centre, located at Nos. 13–14Connaught Road Central & Nos. 21–

23 Des Voeux Road Central, HongKong. The Property is situated on thenortheastern side of Des Voeux RoadCentral and southwestern side of

Connaught Road Central near itsjunction with World Wide Lane inCentral in Hong Kong.

Euro Trade Centre was completed in1982 according to Occupation Permit

No H34/82. The saleable area of theProperty is about 4,442.66 sq.ft. (or412.73 sq.m.).

The Property is held under GovernmentLease for a term of 999 yearscommencing from 30 January 1900.

The annual government rent of thesubject lot is HK$166.

According to theinformation provided by

the Company, theProperty was owneroccupied as at the

Valuation Date.

HK$165,000,000 (HongKong Dollars One

Hundred and Sixty FiveMillion).

Notes:

(1) Pursuant to records obtained from the Land Registry and information provided by the Company, the registered owner of theProperty as at the Valuation Date is HKMC Medical Products Limited.

(2) At the time of our recent search, the following encumbrances were registered against the Property:

(i) Deed of Mutual Covenant with Plans vide memorial no UB2313357 dated 3 September 1982;

(ii) Mortgage in favour of Bank of China (Hong Kong) Limited for a consideration of HK$150,000,000 vide memorialno 21042002510189 dated 31 March 2021; and

(iii) Assignment of Rentals in favour of Bank of China (Hong Kong) Limited vide memorial no 21042002510197 dated31 March 2021.

(3) The Property falls within an area zoned ‘‘Commercial’’ under Draft Central District Outline Zoning Plan No. S/H4/17exhibited on 24 May 2019.


– III-6 –


Set out below is a summary of certain provisions of the Memorandum and Articles of Association

of the Company and of certain aspects of Cayman company law.

The Company was incorporated in the Cayman Islands as an exempted company with limited

liability on 21 September 2020 under the Companies Act, Cap. 22 (Act 3 of 1961, as consolidated and

revised) of the Cayman Islands (the ‘‘Companies Act’’). The Company’s constitutional documents

consist of its Amended and Restated Memorandum of Association (the ‘‘Memorandum’’) and its

Amended and Restated Articles of Association (the ‘‘Articles’’).

1. MEMORANDUM OF ASSOCIATION

(a) The Memorandum states, inter alia, that the liability of members of the Company is limited

to the amount, if any, for the time being unpaid on the shares respectively held by them and

that the objects for which the Company is established are unrestricted (including acting as an

investment company), and that the Company shall have and be capable of exercising all the

functions of a natural person of full capacity irrespective of any question of corporate benefit,

as provided in section 27(2) of the Companies Act and in view of the fact that the Company

is an exempted company that the Company will not trade in the Cayman Islands with any

person, firm or corporation except in furtherance of the business of the Company carried on

outside the Cayman Islands.

(b) The Company may by special resolution alter its Memorandum with respect to any objects,

powers or other matters specified therein.

2. ARTICLES OF ASSOCIATION

The Articles were conditionally adopted on [.] with effect from the [REDACTED]. The following

is a summary of certain provisions of the Articles:

(a) Shares

(i) Classes of shares

The share capital of the Company consists of ordinary shares.

(ii) Variation of rights of existing shares or classes of shares

Subject to the Companies Act, if at any time the share capital of the Company is

divided into different classes of shares, all or any of the special rights attached to the shares

or any class of shares may (unless otherwise provided for by the terms of issue of that class)

be varied, modified or abrogated either with the consent in writing of the holders of not less

than three-fourths in nominal value of the issued shares of that class or with the sanction of a

special resolution passed at a separate general meeting of the holders of the shares of that

class. To every such separate general meeting the provisions of the Articles relating to

general meetings will mutatis mutandis apply, but so that the necessary quorum (other than at

an adjourned meeting) shall be two persons holding or representing by proxy not less than

one-third in nominal value of the issued shares of that class and at any adjourned meeting

two holders present in person or by proxy (whatever the number of shares held by them)

shall be a quorum. Every holder of shares of the class shall be entitled to one vote for every

such share held by him.

APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANYAND CAYMAN ISLANDS COMPANY LAW

– IV-1 –


Any special rights conferred upon the holders of any shares or class of shares shall not,

unless otherwise expressly provided in the rights attaching to the terms of issue of such

shares, be deemed to be varied by the creation or issue of further shares ranking pari passu

therewith.

(iii) Alteration of capital

The Company may by ordinary resolution of its members:

(i) increase its share capital by the creation of new shares;

(ii) consolidate all or any of its capital into shares of larger amount than its existing

shares;

(iii) divide its shares into several classes and attach to such shares any preferential,

deferred, qualified or special rights, privileges, conditions or restrictions as the

Company in general meeting or as the directors may determine;

(iv) subdivide its shares or any of them into shares of smaller amount than is fixed by

the Memorandum; or

(v) cancel any shares which, at the date of passing of the resolution, have not been

taken and diminish the amount of its capital by the amount of the shares so

cancelled.

The Company may reduce its share capital or any capital redemption reserve or other

undistributable reserve in any way by special resolution.

(iv) Transfer of shares

All transfers of shares may be effected by an instrument of transfer in the usual or

common form or in a form prescribed by The Stock Exchange of Hong Kong Limited (the

‘‘Stock Exchange’’) or in such other form as the board may approve and which may be

under hand or, if the transferor or transferee is a clearing house or its nominee(s), by hand or

by machine imprinted signature or by such other manner of execution as the board may

approve from time to time.

Notwithstanding the foregoing, for so long as any shares are listed on the Stock

Exchange, titles to such listed shares may be evidenced and transferred in accordance with

the laws applicable to and the rules and regulations of the Stock Exchange (the ‘‘ListingRules’’) that are or shall be applicable to such listed shares. The register of members in

respect of its listed shares (whether the principal register or a branch register) may be kept by

recording the particulars required by Section 40 of the Companies Act in a form otherwise

than legible if such recording otherwise complies with the laws applicable to and the Listing

Rules that are or shall be applicable to such listed shares.

The instrument of transfer shall be executed by or on behalf of the transferor and the

transferee provided that the board may dispense with the execution of the instrument of

transfer by the transferee. The transferor shall be deemed to remain the holder of the share

until the name of the transferee is entered in the register of members in respect of that share.


– IV-2 –


The board may, in its absolute discretion, at any time transfer any share upon the

principal register to any branch register or any share on any branch register to the principal

register or any other branch register.

The board may decline to recognise any instrument of transfer unless a fee (not

exceeding the maximum sum as the Stock Exchange may determine to be payable)

determined by the Directors is paid to the Company, the instrument of transfer is properly

stamped (if applicable), it is in respect of only one class of share and is lodged at the

relevant registration office or registered office or such other place at which the principal

register is kept accompanied by the relevant share certificate(s) and such other evidence as

the board may reasonably require to show the right of the transferor to make the transfer (and

if the instrument of transfer is executed by some other person on his behalf, the authority of

that person so to do).

The registration of transfers may be suspended and the register closed on giving notice

by advertisement in any newspaper or by any other means in accordance with the

requirements of the Stock Exchange or by electronic means or other means in such manner as

may be accepted by the Stock Exchange, at such times and for such periods as the board may

determine. The register of members must not be closed for periods exceeding in the whole

thirty (30) days in any year. The period of thirty (30) days may be extended in respect of any

year if approved by the members by ordinary resolution.

Subject to the above, fully paid shares are free from any restriction on transfer and free

of all liens in favour of the Company.

(v) Power of the Company to purchase its own shares

The Company is empowered by the Companies Act and the Articles to purchase its own

shares subject to certain restrictions and the board may only exercise this power on behalf of

the Company subject to any applicable requirements imposed from time to time by the Stock

Exchange.

Where the Company purchases for redemption a redeemable share, purchases not made

through the market or by tender must be limited to a maximum price determined by the

Company in general meeting. If purchases are by tender, tenders must be made available to

all members alike.

The board may accept the surrender for no consideration of any fully paid share.

(vi) Power of any subsidiary of the Company to own shares in the Company

There are no provisions in the Articles relating to ownership of shares in the Company

by a subsidiary.

(vii) Calls on shares and forfeiture of shares

The board may from time to time make such calls upon the members in respect of any

monies unpaid on the shares held by them respectively (whether on account of the nominal

value of the shares or by way of premium). A call may be made payable either in one lump

sum or by instalments. If the sum payable in respect of any call or instalment is not paid on


– IV-3 –


or before the day appointed for payment thereof, the person or persons from whom the sum is

due shall pay interest on the same at such rate not exceeding twenty per cent. (20%) per

annum as the board may agree to accept from the day appointed for the payment thereof to

the time of actual payment, but the board may waive payment of such interest wholly or in

part. The board may, if it thinks fit, receive from any member willing to advance the same,

either in money or money’s worth, all or any part of the monies uncalled and unpaid or

instalments payable upon any shares held by him, and upon all or any of the monies so

advanced the Company may pay interest at such rate (if any) as the board may decide.

If a member fails to pay any call on the day appointed for payment thereof, the board

may serve not less than fourteen (14) clear days’ notice on him requiring payment of so

much of the call as is unpaid, together with any interest which may have accrued and which

may still accrue up to the date of actual payment and stating that, in the event of non-

payment at or before the time appointed, the shares in respect of which the call was made

will be liable to be forfeited.

If the requirements of any such notice are not complied with, any share in respect of

which the notice has been given may at any time thereafter, before the payment required by

the notice has been made, be forfeited by a resolution of the board to that effect. Such

forfeiture will include all dividends and bonuses declared in respect of the forfeited share and

not actually paid before the forfeiture.

A person whose shares have been forfeited shall cease to be a member in respect of the

forfeited shares but shall, notwithstanding, remain liable to pay to the Company all monies

which, at the date of forfeiture, were payable by him to the Company in respect of the shares,

together with (if the board shall in its discretion so require) interest thereon from the date of

forfeiture until the date of actual payment at such rate not exceeding twenty per cent. (20%)

per annum as the board determines.

(b) Directors

(i) Appointment, retirement and removal

At each annual general meeting, one third of the Directors for the time being (or if their

number is not a multiple of three, then the number nearest to but not less than one third)

shall retire from office by rotation provided that every Director shall be subject to retirement

at an annual general meeting at least once every three years. The Directors to retire by

rotation shall include any Director who wishes to retire and not offer himself for re-election.

Any further Directors so to retire shall be those who have been longest in office since their

last re-election or appointment but as between persons who became or were last re-elected

Directors on the same day those to retire will (unless they otherwise agree among

themselves) be determined by lot.

Neither a Director nor an alternate Director is required to hold any shares in the

Company by way of qualification. Further, there are no provisions in the Articles relating to

retirement of Directors upon reaching any age limit.


– IV-4 –


The Directors have the power to appoint any person as a Director either to fill a casual

vacancy on the board or as an addition to the existing board. Any Director appointed to fill a

casual vacancy shall hold office until the first general meeting of members after his

appointment and be subject to re-election at such meeting and any Director appointed as an

addition to the existing board shall hold office only until the next following annual general

meeting of the Company and shall then be eligible for re-election.

A Director may be removed by an ordinary resolution of the Company before the

expiration of his period of office (but without prejudice to any claim which such Director

may have for damages for any breach of any contract between him and the Company) and

members of the Company may by ordinary resolution appoint another in his place. Unless

otherwise determined by the Company in general meeting, the number of Directors shall not

be less than two. There is no maximum number of Directors.

The office of director shall be vacated if:

(aa) he resigns by notice in writing delivered to the Company;

(bb) he becomes of unsound mind or dies;

(cc) without special leave, he is absent from meetings of the board for six (6)

consecutive months, and the board resolves that his office is vacated;

(dd) he becomes bankrupt or has a receiving order made against him or suspends

payment or compounds with his creditors;

(ee) he is prohibited from being a director by law; or

(ff) he ceases to be a director by virtue of any provision of law or is removed from

office pursuant to the Articles.

The board may appoint one or more of its body to be managing director, joint managing

director, or deputy managing director or to hold any other employment or executive office

with the Company for such period and upon such terms as the board may determine and the

board may revoke or terminate any of such appointments. The board may delegate any of its

powers, authorities and discretions to committees consisting of such Director or Directors and

other persons as the board thinks fit, and it may from time to time revoke such delegation or

revoke the appointment of and discharge any such committees either wholly or in part, and

either as to persons or purposes, but every committee so formed must, in the exercise of the

powers, authorities and discretions so delegated, conform to any regulations that may from

time to time be imposed upon it by the board.

(ii) Power to allot and issue shares and warrants

Subject to the provisions of the Companies Act and the Memorandum and Articles and

to any special rights conferred on the holders of any shares or class of shares, any share may

be issued (a) with or have attached thereto such rights, or such restrictions, whether with

regard to dividend, voting, return of capital, or otherwise, as the Directors may determine, or

(b) on terms that, at the option of the Company or the holder thereof, it is liable to be

redeemed.


– IV-5 –


The board may issue warrants or convertible securities or securities of similar nature

conferring the right upon the holders thereof to subscribe for any class of shares or securities

in the capital of the Company on such terms as it may determine.

Subject to the provisions of the Companies Act and the Articles and, where applicable,

the Listing Rules and without prejudice to any special rights or restrictions for the time being

attached to any shares or any class of shares, all unissued shares in the Company are at the

disposal of the board, which may offer, allot, grant options over or otherwise dispose of them

to such persons, at such times, for such consideration and on such terms and conditions as it

in its absolute discretion thinks fit, but so that no shares shall be issued at a discount to their

nominal value.

Neither the Company nor the board is obliged, when making or granting any allotment

of, offer of, option over or disposal of shares, to make, or make available, any such

allotment, offer, option or shares to members or others with registered addresses in any

particular territory or territories being a territory or territories where, in the absence of a

registration statement or other special formalities, this would or might, in the opinion of the

board, be unlawful or impracticable or that based on legal opinions provided by legal

advisers, the board considers it necessary or expedient not to offer the shares to such

members on account either of legal restrictions under the laws of the relevant place or the

requirements of the relevant regulatory body or stock exchange in that place. Members

affected as a result of the foregoing sentence shall not be, or be deemed to be, a separate

class of members for any purpose whatsoever.

(iii) Power to dispose of the assets of the Company or any of its subsidiaries

There are no specific provisions in the Articles relating to the disposal of the assets of

the Company or any of its subsidiaries. The Directors may, however, exercise all powers and

do all acts and things which may be exercised or done or approved by the Company and

which are not required by the Articles or the Companies Act to be exercised or done by the

Company in general meeting.

(iv) Borrowing powers

The board may exercise all the powers of the Company to raise or borrow money, to

mortgage or charge all or any part of the undertaking, property and assets and uncalled

capital of the Company and, subject to the Companies Act, to issue debentures, bonds and

other securities of the Company, whether outright or as collateral security for any debt,

liability or obligation of the Company or of any third party.

(v) Remuneration

The ordinary remuneration of the Directors is to be determined by the Company in

general meeting, such sum (unless otherwise directed by the resolution by which it is voted)

to be divided amongst the Directors in such proportions and in such manner as the board may

agree or, failing agreement, equally, except that any Director holding office for part only of

the period in respect of which the remuneration is payable shall only rank in such division in

proportion to the time during such period for which he held office. The Directors are also

entitled to be prepaid or repaid all travelling, hotel and incidental expenses reasonably


– IV-6 –


expected to be incurred or incurred by them in attending any board meetings, committee

meetings or general meetings or separate meetings of any class of shares or of debentures of

the Company or otherwise in connection with the discharge of their duties as Directors.

Any Director who, by request, goes or resides abroad for any purpose of the Company

or who performs services which in the opinion of the board go beyond the ordinary duties of

a Director may be paid such extra remuneration as the board may determine and such extra

remuneration shall be in addition to or in substitution for any ordinary remuneration as a

Director. An executive Director appointed to be a managing director, joint managing director,

deputy managing director or other executive officer shall receive such remuneration and such

other benefits and allowances as the board may from time to time decide. Such remuneration

may be either in addition to or in lieu of his remuneration as a Director.

The board may establish or concur or join with other companies (being subsidiary

companies of the Company or companies with which it is associated in business) in

establishing and making contributions out of the Company’s monies to any schemes or funds

for providing pensions, sickness or compassionate allowances, life assurance or other benefits

for employees (which expression as used in this and the following paragraph shall include

any Director or past Director who may hold or have held any executive office or any office

of profit with the Company or any of its subsidiaries) and ex-employees of the Company and

their dependents or any class or classes of such persons.

The board may pay, enter into agreements to pay or make grants of revocable or

irrevocable, and either subject or not subject to any terms or conditions, pensions or other

benefits to employees and ex-employees and their dependents, or to any of such persons,

including pensions or benefits additional to those, if any, to which such employees or ex-

employees or their dependents are or may become entitled under any such scheme or fund as

is mentioned in the previous paragraph. Any such pension or benefit may, as the board

considers desirable, be granted to an employee either before and in anticipation of, or upon

or at any time after, his actual retirement.

The board may resolve to capitalise all or any part of any amount for the time being

standing to the credit of any reserve or fund (including a share premium account and the

profit and loss account) whether or not the same is available for distribution by applying such

sum in paying up unissued shares to be allotted to (i) employees (including directors) of the

Company and/or its affiliates (meaning any individual, corporation, partnership, association,

joint-stock company, trust, unincorporated association or other entity (other than the

Company) that directly, or indirectly through one or more intermediaries, controls, is

controlled by or is under common control with, the Company) upon exercise or vesting of

any options or awards granted under any share incentive scheme or employee benefit scheme

or other arrangement which relates to such persons that has been adopted or approved by the

members in general meeting, or (ii) any trustee of any trust to whom shares are to be allotted

and issued by the Company in connection with the operation of any share incentive scheme

or employee benefit scheme or other arrangement which relates to such persons that has been

adopted or approved by the members in general meeting.


– IV-7 –


(vi) Compensation or payments for loss of office

Pursuant to the Articles, payments to any Director or past Director of any sum by way

of compensation for loss of office or as consideration for or in connection with his retirement

from office (not being a payment to which the Director is contractually entitled) must be

approved by the Company in general meeting.

(vii) Loans and provision of security for loans to Directors

The Company must not make any loan, directly or indirectly, to a Director or his close

associate(s) if and to the extent it would be prohibited by the Companies Ordinance (Chapter

622 of the laws of Hong Kong) as if the Company were a company incorporated in Hong

Kong.

(viii) Disclosure of interests in contracts with the Company or any of its subsidiaries

A Director may hold any other office or place of profit with the Company (except that

of the auditor of the Company) in conjunction with his office of Director for such period and

upon such terms as the board may determine, and may be paid such extra remuneration

therefor in addition to any remuneration provided for by or pursuant to the Articles. A

Director may be or become a director or other officer of, or otherwise interested in, any

company promoted by the Company or any other company in which the Company may be

interested, and shall not be liable to account to the Company or the members for any

remuneration, profits or other benefits received by him as a director, officer or member of, or

from his interest in, such other company. The board may also cause the voting power

conferred by the shares in any other company held or owned by the Company to be exercised

in such manner in all respects as it thinks fit, including the exercise thereof in favour of any

resolution appointing the Directors or any of them to be directors or officers of such other

company, or voting or providing for the payment of remuneration to the directors or officers

of such other company.

No Director or proposed or intended Director shall be disqualified by his office from

contracting with the Company, either with regard to his tenure of any office or place of profit

or as vendor, purchaser or in any other manner whatsoever, nor shall any such contract or

any other contract or arrangement in which any Director is in any way interested be liable to

be avoided, nor shall any Director so contracting or being so interested be liable to account

to the Company or the members for any remuneration, profit or other benefits realised by any

such contract or arrangement by reason of such Director holding that office or the fiduciary

relationship thereby established. A Director who to his knowledge is in any way, whether

directly or indirectly, interested in a contract or arrangement or proposed contract or

arrangement with the Company must declare the nature of his interest at the meeting of the

board at which the question of entering into the contract or arrangement is first taken into

consideration, if he knows his interest then exists, or in any other case, at the first meeting of

the board after he knows that he is or has become so interested.


– IV-8 –


A Director shall not vote (nor be counted in the quorum) on any resolution of the board

approving any contract or arrangement or other proposal in which he or any of his close

associates is materially interested, but this prohibition does not apply to any of the following

matters, namely:

(aa) any contract or arrangement for giving to such Director or his close associate(s)

any security or indemnity in respect of money lent by him or any of his close

associates or obligations incurred or undertaken by him or any of his close

associates at the request of or for the benefit of the Company or any of its

subsidiaries;

(bb) any contract or arrangement for the giving of any security or indemnity to a third

party in respect of a debt or obligation of the Company or any of its subsidiaries

for which the Director or his close associate(s) has himself/themselves assumed

responsibility in whole or in part whether alone or jointly under a guarantee or

indemnity or by the giving of security;

(cc) any contract or arrangement concerning an offer of shares or debentures or other

securities of or by the Company or any other company which the Company may

promote or be interested in for subscription or purchase, where the Director or his

close associate(s) is/are or is/are to be interested as a participant in the

underwriting or sub-underwriting of the offer;

(dd) any contract or arrangement in which the Director or his close associate(s) is/are

interested in the same manner as other holders of shares or debentures or other

securities of the Company by virtue only of his/their interest in shares or

debentures or other securities of the Company; or

(ee) any proposal or arrangement concerning the adoption, modification or operation of

a share option scheme, a pension fund or retirement, death, or disability benefits

scheme or other arrangement which relates both to Directors, his close associates

and employees of the Company or of any of its subsidiaries and does not provide

in respect of any Director, or his close associate(s), as such any privilege or

advantage not accorded generally to the class of persons to which such scheme or

fund relates.

(c) Proceedings of the Board

The board may meet for the despatch of business, adjourn and otherwise regulate its meetings

as it considers appropriate. Questions arising at any meeting shall be determined by a majority of

votes. In the case of an equality of votes, the chairman of the meeting shall have an additional or

casting vote.

(d) Alterations to constitutional documents and the Company’s name

The Articles may be rescinded, altered or amended by the Company in general meeting by

special resolution. The Articles state that a special resolution shall be required to alter the

provisions of the Memorandum, to amend the Articles or to change the name of the Company.


– IV-9 –


(e) Meetings of members

(i) Special and ordinary resolutions

A special resolution of the Company must be passed by a majority of not less than

three-fourths of the votes cast by such members as, being entitled so to do, vote in person or,

in the case of such members as are corporations, by their duly authorised representatives or,

where proxies are allowed, by proxy at a general meeting of which notice has been duly

given in accordance with the Articles.

Under the Companies Act, a copy of any special resolution must be forwarded to the

Registrar of Companies in the Cayman Islands within fifteen (15) days of being passed.

An ordinary resolution is defined in the Articles to mean a resolution passed by a

simple majority of the votes of such members of the Company as, being entitled to do so,

vote in person or, in the case of corporations, by their duly authorised representatives or,

where proxies are allowed, by proxy at a general meeting of which notice has been duly

given in accordance with the Articles.

(ii) Voting rights and right to demand a poll

Subject to any special rights or restrictions as to voting for the time being attached to

any shares, at any general meeting on a poll every member present in person or by proxy or,

in the case of a member being a corporation, by its duly authorised representative shall have

one vote for every fully paid share of which he is the holder but so that no amount paid up

or credited as paid up on a share in advance of calls or instalments is treated for the

foregoing purposes as paid up on the share. A member entitled to more than one vote need

not use all his votes or cast all the votes he uses in the same way.

At any general meeting a resolution put to the vote of the meeting is to be decided by

way of a poll save that the chairman of the meeting may in good faith, allow a resolution

which relates purely to a procedural or administrative matter to be voted on by a show of

hands in which case every member present in person (or being a corporation, is present by a

duly authorised representative), or by proxy(ies) shall have one vote provided that where

more than one proxy is appointed by a member which is a clearing house (or its nominee(s)),

each such proxy shall have one vote on a show of hands.

If a recognised clearing house (or its nominee(s)) is a member of the Company it may

authorise such person or persons as it thinks fit to act as its representative(s) at any meeting

of the Company or at any meeting of any class of members of the Company provided that, if

more than one person is so authorised, the authorisation shall specify the number and class of

shares in respect of which each such person is so authorised. A person authorised pursuant to

this provision shall be deemed to have been duly authorised without further evidence of the

facts and be entitled to exercise the same powers on behalf of the recognised clearing house

(or its nominee(s)) as if such person was the registered holder of the shares of the Company

held by that clearing house (or its nominee(s)) including, where a show of hands is allowed,

the right to vote individually on a show of hands.


– IV-10 –


Where the Company has any knowledge that any shareholder is, under the Listing

Rules, required to abstain from voting on any particular resolution of the Company or

restricted to voting only for or only against any particular resolution of the Company, any

votes cast by or on behalf of such shareholder in contravention of such requirement or

restriction shall not be counted.

(iii) Annual general meetings and extraordinary general meetings

The Company must hold an annual general meeting of the Company every year other

than the year of the Company’s adoption of the Articles within a period of not more than

fifteen (15) months after the holding of the last preceding annual general meeting or a period

of not more than eighteen (18) months from the date of adoption of the Articles, unless a

longer period would not infringe the Listing Rules. A meeting of members or any class

thereof may be held by means of such telephone, electronic or other communication facilities

and participation in such a meeting shall constitute presence at such meeting.

Extraordinary general meetings may be convened on the requisition of one or more

shareholders holding, at the date of deposit of the requisition, not less than one-tenth of the

paid up capital of the Company having the right of voting at general meetings. Such

requisition shall be made in writing to the board or the secretary for the purpose of requiring

an extraordinary general meeting to be called by the board for the transaction of any business

specified in such requisition. Such meeting shall be held within 2 months after the deposit of

such requisition. If within 21 days of such deposit, the board fails to proceed to convene such

meeting, the requisitionist(s) himself/herself (themselves) may do so in the same manner, and

all reasonable expenses incurred by the requisitionist(s) as a result of the failure of the board

shall be reimbursed to the requisitionist(s) by the Company.

(iv) Notices of meetings and business to be conducted

An annual general meeting must be called by notice of not less than twenty-one (21)

clear days and not less than twenty (20) clear business days. All other general meetings must

be called by notice of at least fourteen (14) clear days and not less than ten (10) clear

business days. The notice is exclusive of the day on which it is served or deemed to be

served and of the day for which it is given, and must specify the time and place of the

meeting and particulars of resolutions to be considered at the meeting and, in the case of

special business, the general nature of that business.

In addition, notice of every general meeting must be given to all members of the

Company other than to such members as, under the provisions of the Articles or the terms of

issue of the shares they hold, are not entitled to receive such notices from the Company, and

also to, among others, the auditors for the time being of the Company.

Any notice to be given to or by any person pursuant to the Articles may be served on

or delivered to any member of the Company personally, by post to such member’s registered

address or by advertisement in newspapers in accordance with the requirements of the Stock

Exchange. Subject to compliance with Cayman Islands law and the Listing Rules, notice may

also be served or delivered by the Company to any member by electronic means.


– IV-11 –


All business that is transacted at an extraordinary general meeting and at an annual

general meeting is deemed special, save that in the case of an annual general meeting, each

of the following business is deemed an ordinary business:

(aa) the declaration and sanctioning of dividends;

(bb) the consideration and adoption of the accounts and balance sheet and the reports

of the directors and the auditors;

(cc) the election of directors in place of those retiring;

(dd) the appointment of auditors and other officers; and

(ee) the fixing of the remuneration of the directors and of the auditors.

(v) Quorum for meetings and separate class meetings

No business shall be transacted at any general meeting unless a quorum is present when

the meeting proceeds to business, but the absence of a quorum shall not preclude the

appointment of a chairman.

The quorum for a general meeting shall be two members present in person (or, in the

case of a member being a corporation, by its duly authorised representative) or by proxy and

entitled to vote. In respect of a separate class meeting (other than an adjourned meeting)

convened to sanction the modification of class rights the necessary quorum shall be two

persons holding or representing by proxy not less than one-third in nominal value of the

issued shares of that class.

(vi) Proxies

Any member of the Company entitled to attend and vote at a meeting of the Company

is entitled to appoint another person as his proxy to attend and vote instead of him. A

member who is the holder of two or more shares may appoint more than one proxy to

represent him and vote on his behalf at a general meeting of the Company or at a class

meeting. A proxy need not be a member of the Company and is entitled to exercise the same

powers on behalf of a member who is an individual and for whom he acts as proxy as such

member could exercise. In addition, a proxy is entitled to exercise the same powers on behalf

of a member which is a corporation and for which he acts as proxy as such member could

exercise as if it were an individual member. Votes may be given either personally (or, in the

case of a member being a corporation, by its duly authorised representative) or by proxy.

(f) Accounts and audit

The board shall cause true accounts to be kept of the sums of money received and expended

by the Company, and the matters in respect of which such receipt and expenditure take place, and

of the property, assets, credits and liabilities of the Company and of all other matters required by

the Companies Act or necessary to give a true and fair view of the Company’s affairs and to

explain its transactions.


– IV-12 –


The accounting records must be kept at the registered office or at such other place or places

as the board decides and shall always be open to inspection by any Director. No member (other

than a Director) shall have any right to inspect any accounting record or book or document of the

Company except as conferred by law or authorised by the board or the Company in general

meeting. However, an exempted company must make available at its registered office in electronic

form or any other medium, copies of its books of account or parts thereof as may be required of it

upon service of an order or notice by the Tax Information Authority pursuant to the Tax

Information Authority Act of the Cayman Islands.

A copy of every balance sheet and profit and loss account (including every document

required by law to be annexed thereto) which is to be laid before the Company at its general

meeting, together with a printed copy of the Directors’ report and a copy of the auditors’ report,

shall not less than twenty-one (21) days before the date of the meeting and at the same time as the

notice of annual general meeting be sent to every person entitled to receive notices of general

meetings of the Company under the provisions of the Articles; however, subject to compliance

with all applicable laws, including the Listing Rules, the Company may send to such persons

summarised financial statements derived from the Company’s annual accounts and the directors’

report instead provided that any such person may by notice in writing served on the Company,

demand that the Company sends to him, in addition to summarised financial statements, a complete

printed copy of the Company’s annual financial statement and the directors’ report thereon.

At the annual general meeting or at a subsequent extraordinary general meeting in each year,

the members shall appoint an auditor to audit the accounts of the Company and such auditor shall

hold office until the next annual general meeting. Moreover, the members may, at any general

meeting, by special resolution remove the auditor at any time before the expiration of his terms of

office and shall by ordinary resolution at that meeting appoint another auditor for the remainder of

his term. The remuneration of the auditors shall be fixed by the Company in general meeting or in

such manner as the members may determine.

The financial statements of the Company shall be audited by the auditor in accordance with

generally accepted auditing standards which may be those of a country or jurisdiction other than

the Cayman Islands. The auditor shall make a written report thereon in accordance with generally

accepted auditing standards and the report of the auditor must be submitted to the members in

general meeting.

(g) Dividends and other methods of distribution

The Company in general meeting may declare dividends in any currency to be paid to the

members but no dividend shall be declared in excess of the amount recommended by the board.

The Articles provide dividends may be declared and paid out of the profits of the Company,

realised or unrealised, or from any reserve set aside from profits which the directors determine is

no longer needed. With the sanction of an ordinary resolution dividends may also be declared and

paid out of share premium account or any other fund or account which can be authorised for this

purpose in accordance with the Companies Act.

Except in so far as the rights attaching to, or the terms of issue of, any share may otherwise

provide, (i) all dividends shall be declared and paid according to the amounts paid up on the shares

in respect whereof the dividend is paid but no amount paid up on a share in advance of calls shall


– IV-13 –


for this purpose be treated as paid up on the share and (ii) all dividends shall be apportioned and

paid pro rata according to the amount paid up on the shares during any portion or portions of the

period in respect of which the dividend is paid. The Directors may deduct from any dividend or

other monies payable to any member or in respect of any shares all sums of money (if any)

presently payable by him to the Company on account of calls or otherwise.

Whenever the board or the Company in general meeting has resolved that a dividend be paid

or declared on the share capital of the Company, the board may further resolve either (a) that such

dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid

up, provided that the shareholders entitled thereto will be entitled to elect to receive such dividend

(or part thereof) in cash in lieu of such allotment, or (b) that shareholders entitled to such dividend

will be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the

whole or such part of the dividend as the board may think fit.

The Company may also upon the recommendation of the board by an ordinary resolution

resolve in respect of any one particular dividend of the Company that it may be satisfied wholly in

the form of an allotment of shares credited as fully paid up without offering any right to

shareholders to elect to receive such dividend in cash in lieu of such allotment.

Any dividend, interest or other sum payable in cash to the holder of shares may be paid by

cheque or warrant sent through the post addressed to the holder at his registered address, or in the

case of joint holders, addressed to the holder whose name stands first in the register of the

Company in respect of the shares at his address as appearing in the register or addressed to such

person and at such addresses as the holder or joint holders may in writing direct. Every such

cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the

order of the holder or, in the case of joint holders, to the order of the holder whose name stands

first on the register in respect of such shares, and shall be sent at his or their risk and payment of

the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the

Company. Any one of two or more joint holders may give effectual receipts for any dividends or

other moneys payable or property distributable in respect of the shares held by such joint holders.

Whenever the board or the Company in general meeting has resolved that a dividend be paid

or declared the board may further resolve that such dividend be satisfied wholly or in part by the

distribution of specific assets of any kind.

All dividends or bonuses unclaimed for one year after having been declared may be invested

or otherwise made use of by the board for the benefit of the Company until claimed and the

Company shall not be constituted a trustee in respect thereof. All dividends or bonuses unclaimed

for six years after having been declared may be forfeited by the board and shall revert to the

Company.

No dividend or other monies payable by the Company on or in respect of any share shall

bear interest against the Company.

(h) Inspection of corporate records

Pursuant to the Articles, the register and branch register of members shall be open to

inspection for at least two (2) hours during business hours by members without charge, or by any

other person upon a maximum payment of HK$2.50 or such lesser sum specified by the board, at


– IV-14 –


the registered office or such other place at which the register is kept in accordance with the

Companies Act or, upon a maximum payment of HK$1.00 or such lesser sum specified by the

board, at the office where the branch register of members is kept, unless the register is closed in

accordance with the Articles.

(i) Rights of minorities in relation to fraud or oppression

There are no provisions in the Articles relating to rights of minority shareholders in relation

to fraud or oppression. However, certain remedies are available to shareholders of the Company

under Cayman Islands law, as summarised in paragraph 3(f) of this Appendix.

(j) Procedures on liquidation

A resolution that the Company be wound up by the court or be wound up voluntarily shall be

a special resolution.

Subject to any special rights, privileges or restrictions as to the distribution of available

surplus assets on liquidation for the time being attached to any class or classes of shares:

(i) if the Company is wound up and the assets available for distribution amongst the

members of the Company shall be more than sufficient to repay the whole of the capital

paid up at the commencement of the winding up, the excess shall be distributed pari

passu amongst such members in proportion to the amount paid up on the shares held by

them respectively; and

(ii) if the Company is wound up and the assets available for distribution amongst the

members as such shall be insufficient to repay the whole of the paid-up capital, such

assets shall be distributed so that, as nearly as may be, the losses shall be borne by the

members in proportion to the capital paid up, or which ought to have been paid up, at

the commencement of the winding up on the shares held by them respectively.

If the Company is wound up (whether the liquidation is voluntary or by the court) the

liquidator may, with the authority of a special resolution and any other sanction required by the

Companies Act divide among the members in specie or kind the whole or any part of the assets of

the Company whether the assets shall consist of property of one kind or shall consist of properties

of different kinds and the liquidator may, for such purpose, set such value as he deems fair upon

any one or more class or classes of property to be divided as aforesaid and may determine how

such division shall be carried out as between the members or different classes of members. The

liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for

the benefit of members as the liquidator, with the like authority, shall think fit, but so that no

contributory shall be compelled to accept any shares or other property in respect of which there is

a liability.

(k) Subscription rights reserve

The Articles provide that to the extent that it is not prohibited by and is in compliance with

the Companies Act, if warrants to subscribe for shares have been issued by the Company and the

Company does any act or engages in any transaction which would result in the subscription price


– IV-15 –


of such warrants being reduced below the par value of a share, a subscription rights reserve shall

be established and applied in paying up the difference between the subscription price and the par

value of a share on any exercise of the warrants.

3. CAYMAN ISLANDS COMPANY LAW

The Company is incorporated in the Cayman Islands subject to the Companies Act and, therefore,

operates subject to Cayman Islands law. Set out below is a summary of certain provisions of Cayman

Islands company law, although this does not purport to contain all applicable qualifications and

exceptions or to be a complete review of all matters of Cayman Islands company law and taxation,

which may differ from equivalent provisions in jurisdictions with which interested parties may be more

familiar:

(a) Company operations

As an exempted company, the Company’s operations must be conducted mainly outside the

Cayman Islands. The Company is required to file an annual return each year with the Registrar of

Companies of the Cayman Islands and pay a fee which is based on the amount of its authorised

share capital.

(b) Share capital

The Companies Act provides that where a company issues shares at a premium, whether for

cash or otherwise, a sum equal to the aggregate amount of the value of the premiums on those

shares shall be transferred to an account, to be called the ‘‘share premium account’’. At the option

of a company, these provisions may not apply to premiums on shares of that company allotted

pursuant to any arrangement in consideration of the acquisition or cancellation of shares in any

other company and issued at a premium.

The Companies Act provides that the share premium account may be applied by the company

subject to the provisions, if any, of its memorandum and articles of association in (a) paying

distributions or dividends to members; (b) paying up unissued shares of the company to be issued

to members as fully paid bonus shares; (c) the redemption and repurchase of shares (subject to the

provisions of section 37 of the Companies Act); (d) writing-off the preliminary expenses of the

company; and (e) writing-off the expenses of, or the commission paid or discount allowed on, any

issue of shares or debentures of the company.

No distribution or dividend may be paid to members out of the share premium account unless

immediately following the date on which the distribution or dividend is proposed to be paid, the

company will be able to pay its debts as they fall due in the ordinary course of business.

The Companies Act provides that, subject to confirmation by the Grand Court of the Cayman

Islands (the ‘‘Court’’), a company limited by shares or a company limited by guarantee and having

a share capital may, if so authorised by its articles of association, by special resolution reduce its

share capital in any way.


– IV-16 –


(c) Financial assistance to purchase shares of a company or its holding company

There is no statutory restriction in the Cayman Islands on the provision of financial

assistance by a company to another person for the purchase of, or subscription for, its own or its

holding company’s shares. Accordingly, a company may provide financial assistance if the

directors of the company consider, in discharging their duties of care and acting in good faith, for

a proper purpose and in the interests of the company, that such assistance can properly be given.

Such assistance should be on an arm’s-length basis.

(d) Purchase of shares and warrants by a company and its subsidiaries

A company limited by shares or a company limited by guarantee and having a share capital

may, if so authorised by its articles of association, issue shares which are to be redeemed or are

liable to be redeemed at the option of the company or a shareholder and the Companies Act

expressly provides that it shall be lawful for the rights attaching to any shares to be varied, subject

to the provisions of the company’s articles of association, so as to provide that such shares are to

be or are liable to be so redeemed. In addition, such a company may, if authorised to do so by its

articles of association, purchase its own shares, including any redeemable shares. However, if the

articles of association do not authorise the manner and terms of purchase, a company cannot

purchase any of its own shares unless the manner and terms of purchase have first been authorised

by an ordinary resolution of the company. At no time may a company redeem or purchase its

shares unless they are fully paid. A company may not redeem or purchase any of its shares if, as a

result of the redemption or purchase, there would no longer be any issued shares of the company

other than shares held as treasury shares. A payment out of capital by a company for the

redemption or purchase of its own shares is not lawful unless immediately following the date on

which the payment is proposed to be made, the company shall be able to pay its debts as they fall

due in the ordinary course of business.

Shares purchased by a company is to be treated as cancelled unless, subject to the

memorandum and articles of association of the company, the directors of the company resolve to

hold such shares in the name of the company as treasury shares prior to the purchase. Where

shares of a company are held as treasury shares, the company shall be entered in the register of

members as holding those shares, however, notwithstanding the foregoing, the company is not be

treated as a member for any purpose and must not exercise any right in respect of the treasury

shares, and any purported exercise of such a right shall be void, and a treasury share must not be

voted, directly or indirectly, at any meeting of the company and must not be counted in

determining the total number of issued shares at any given time, whether for the purposes of the

company’s articles of association or the Companies Act.

A company is not prohibited from purchasing and may purchase its own warrants subject to

and in accordance with the terms and conditions of the relevant warrant instrument or certificate.

There is no requirement under Cayman Islands law that a company’s memorandum or articles of

association contain a specific provision enabling such purchases and the directors of a company

may rely upon the general power contained in its memorandum of association to buy and sell and

deal in personal property of all kinds.

Under Cayman Islands law, a subsidiary may hold shares in its holding company and, in

certain circumstances, may acquire such shares.


– IV-17 –


(e) Dividends and distributions

The Companies Act permits, subject to a solvency test and the provisions, if any, of the

company’s memorandum and articles of association, the payment of dividends and distributions out

of the share premium account. With the exception of the foregoing, there are no statutory

provisions relating to the payment of dividends. Based upon English case law, which is regarded

as persuasive in the Cayman Islands, dividends may be paid only out of profits.

No dividend may be declared or paid, and no other distribution (whether in cash or

otherwise) of the company’s assets (including any distribution of assets to members on a winding

up) may be made to the company, in respect of a treasury share.

(f) Protection of minorities and shareholders’ suits

The Courts ordinarily would be expected to follow English case law precedents which permit

a minority shareholder to commence a representative action against or derivative actions in the

name of the company to challenge (a) an act which is ultra vires the company or illegal, (b) an act

which constitutes a fraud against the minority and the wrongdoers are themselves in control of the

company, and (c) an irregularity in the passing of a resolution which requires a qualified (or

special) majority.

In the case of a company (not being a bank) having a share capital divided into shares, the

Court may, on the application of members holding not less than one fifth of the shares of the

company in issue, appoint an inspector to examine into the affairs of the company and to report

thereon in such manner as the Court shall direct.

Any shareholder of a company may petition the Court which may make a winding up order if

the Court is of the opinion that it is just and equitable that the company should be wound up or, as

an alternative to a winding up order, (a) an order regulating the conduct of the company’s affairs in

the future, (b) an order requiring the company to refrain from doing or continuing an act

complained of by the shareholder petitioner or to do an act which the shareholder petitioner has

complained it has omitted to do, (c) an order authorising civil proceedings to be brought in the

name and on behalf of the company by the shareholder petitioner on such terms as the Court may

direct, or (d) an order providing for the purchase of the shares of any shareholders of the company

by other shareholders or by the company itself and, in the case of a purchase by the company

itself, a reduction of the company’s capital accordingly.

Generally claims against a company by its shareholders must be based on the general laws of

contract or tort applicable in the Cayman Islands or their individual rights as shareholders as

established by the company’s memorandum and articles of association.

(g) Disposal of assets

The Companies Act contains no specific restrictions on the power of directors to dispose of

assets of a company. However, as a matter of general law, every officer of a company, which

includes a director, managing director and secretary, in exercising his powers and discharging his

duties must do so honestly and in good faith with a view to the best interests of the company and

exercise the care, diligence and skill that a reasonably prudent person would exercise in

comparable circumstances.


– IV-18 –


(h) Accounting and auditing requirements

A company must cause proper books of account to be kept with respect to (i) all sums of

money received and expended by the company and the matters in respect of which the receipt and

expenditure takes place; (ii) all sales and purchases of goods by the company; and (iii) the assets

and liabilities of the company.

Proper books of account shall not be deemed to be kept if there are not kept such books as

are necessary to give a true and fair view of the state of the company’s affairs and to explain its

transactions.

An exempted company must make available at its registered office in electronic form or any

other medium, copies of its books of account or parts thereof as may be required of it upon service

of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority

Act of the Cayman Islands.

(i) Exchange control

There are no exchange control regulations or currency restrictions in the Cayman Islands.

(j) Taxation

Pursuant to the Tax Concessions Act of the Cayman Islands, the Company has obtained an

undertaking:

(1) that no law which is enacted in the Cayman Islands imposing any tax to be levied on

profits, income, gains or appreciation shall apply to the Company or its operations; and

(2) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not

be payable on or in respect of the shares, debentures or other obligations of the

Company.

The undertaking for the Company is for a period of twenty years from 2 October 2020.

The Cayman Islands currently levy no taxes on individuals or corporations based upon

profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or

estate duty. There are no other taxes likely to be material to the Company levied by the

Government of the Cayman Islands save for certain stamp duties which may be applicable, from

time to time, on certain instruments executed in or brought within the jurisdiction of the Cayman

Islands. The Cayman Islands are a party to a double tax treaty entered into with the United

Kingdom in 2010 but otherwise is not party to any double tax treaties.

(k) Stamp duty on transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands

companies except those which hold interests in land in the Cayman Islands.

(l) Loans to directors

There is no express provision in the Companies Act prohibiting the making of loans by a

company to any of its directors.


– IV-19 –


(m) Inspection of corporate records

The notice of registered office is a matter of public record. A list of the names of the current

directors and alternate directors (if applicable) is made available by the Registrar of Companies for

inspection by any person on payment of a fee. The register of mortgages is open to inspection by

creditors and members.

Members of the Company have no general right under the Companies Act to inspect or

obtain copies of the register of members or corporate records of the Company. They will, however,

have such rights as may be set out in the Company’s Articles.

(n) Register of members

An exempted company may maintain its principal register of members and any branch

registers at such locations, whether within or without the Cayman Islands, as the directors may,

from time to time, think fit. The register of members shall contain such particulars as required by

Section 40 of the Companies Act. A branch register must be kept in the same manner in which a

principal register is by the Companies Act required or permitted to be kept. The company shall

cause to be kept at the place where the company’s principal register is kept a duplicate of any

branch register duly entered up from time to time.

There is no requirement under the Companies Act for an exempted company to make any

returns of members to the Registrar of Companies of the Cayman Islands. The names and

addresses of the members are, accordingly, not a matter of public record and are not available for

public inspection. However, an exempted company shall make available at its registered office, in

electronic form or any other medium, such register of members, including any branch register of

members, as may be required of it upon service of an order or notice by the Tax Information

Authority pursuant to the Tax Information Authority Act of the Cayman Islands.

(o) Register of Directors and Officers

The Company is required to maintain at its registered office a register of directors and

officers which is not available for inspection by the public. A copy of such register must be filed

with the Registrar of Companies in the Cayman Islands and any change must be notified to the

Registrar within thirty (30) days of any change in such directors or officers.

(p) Beneficial Ownership Register

An exempted company is required to maintain a beneficial ownership register at its registered

office that records details of the persons who ultimately own or control, directly or indirectly, 25%

or more of the equity interests or voting rights of the company or have rights to appoint or remove

a majority of the directors of the company. The beneficial ownership register is not a public

document and is only accessible by a designated competent authority of the Cayman Islands. Such

requirement does not, however, apply to an exempted company with its shares listed on an

approved stock exchange, which includes the Stock Exchange. Accordingly, for so long as the

shares of the Company are listed on the Stock Exchange, the Company is not required to maintain

a beneficial ownership register.


– IV-20 –


(q) Winding up

A company may be wound up (a) compulsorily by order of the Court, (b) voluntarily, or (c)

under the supervision of the Court.

The Court has authority to order winding up in a number of specified circumstances

including where the members of the company have passed a special resolution requiring the

company to be wound up by the Court, or where the company is unable to pay its debts, or where

it is, in the opinion of the Court, just and equitable to do so. Where a petition is presented by

members of the company as contributories on the ground that it is just and equitable that the

company should be wound up, the Court has the jurisdiction to make certain other orders as an

alternative to a winding-up order, such as making an order regulating the conduct of the company’s

affairs in the future, making an order authorising civil proceedings to be brought in the name and

on behalf of the company by the petitioner on such terms as the Court may direct, or making an

order providing for the purchase of the shares of any of the members of the company by other

members or by the company itself.

A company (save with respect to a limited duration company) may be wound up voluntarily

when the company so resolves by special resolution or when the company in general meeting

resolves by ordinary resolution that it be wound up voluntarily because it is unable to pay its debts

as they fall due. In the case of a voluntary winding up, such company is obliged to cease to carry

on its business (except so far as it may be beneficial for its winding up) from the time of passing

the resolution for voluntary winding up or upon the expiry of the period or the occurrence of the

event referred to above.

For the purpose of conducting the proceedings in winding up a company and assisting the

Court therein, there may be appointed an official liquidator or official liquidators; and the court

may appoint to such office such person, either provisionally or otherwise, as it thinks fit, and if

more persons than one are appointed to such office, the Court must declare whether any act

required or authorised to be done by the official liquidator is to be done by all or any one or more

of such persons. The Court may also determine whether any and what security is to be given by an

official liquidator on his appointment; if no official liquidator is appointed, or during any vacancy

in such office, all the property of the company shall be in the custody of the Court.

As soon as the affairs of the company are fully wound up, the liquidator must make a report

and an account of the winding up, showing how the winding up has been conducted and how the

property of the company has been disposed of, and thereupon call a general meeting of the

company for the purposes of laying before it the account and giving an explanation thereof. This

final general meeting must be called by at least 21 days’ notice to each contributory in any manner

authorised by the company’s articles of association and published in the Gazette.

(r) Reconstructions

There are statutory provisions which facilitate reconstructions and amalgamations approved

by a majority in number representing seventy-five per cent. (75%) in value of shareholders or class

of shareholders or creditors, as the case may be, as are present at a meeting called for such purpose

and thereafter sanctioned by the Court. Whilst a dissenting shareholder would have the right to

express to the Court his view that the transaction for which approval is sought would not provide


– IV-21 –


the shareholders with a fair value for their shares, the Court is unlikely to disapprove the

transaction on that ground alone in the absence of evidence of fraud or bad faith on behalf of

management.

(s) Take-overs

Where an offer is made by a company for the shares of another company and, within four (4)

months of the offer, the holders of not less than ninety per cent. (90%) of the shares which are the

subject of the offer accept, the offeror may at any time within two (2) months after the expiration

of the said four (4) months, by notice in the prescribed manner require the dissenting shareholders

to transfer their shares on the terms of the offer. A dissenting shareholder may apply to the Court

within one (1) month of the notice objecting to the transfer. The burden is on the dissenting

shareholder to show that the Court should exercise its discretion, which it will be unlikely to do

unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders of

the shares who have accepted the offer as a means of unfairly forcing out minority shareholders.

(t) Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association

may provide for indemnification of officers and directors, except to the extent any such provision

may be held by the Court to be contrary to public policy (e.g. for purporting to provide

indemnification against the consequences of committing a crime).

(u) Economic Substance Requirements

Pursuant to the International Tax Cooperation (Economic Substance) Act, 2018 of the

Cayman Islands (‘‘ES Act’’) that came into force on 1 January 2019, a ‘‘relevant entity’’ is

required to satisfy the economic substance test set out in the ES Act. A ‘‘relevant entity’’ includes

an exempted company incorporated in the Cayman Islands as is the Company; however, it does not

include an entity that is tax resident outside the Cayman Islands. Accordingly, for so long as the

Company is a tax resident outside the Cayman Islands, including in Hong Kong, it is not required

to satisfy the economic substance test set out in the ES Act.

4. GENERAL

Conyers Dill & Pearman, the Company’s special legal counsel on Cayman Islands law, have sent

to the Company a letter of advice summarising certain aspects of Cayman Islands company law. This

letter, together with a copy of the Companies Act, is available for inspection as referred to in the section

headed ‘‘Documents delivered to the Registrar of Companies and available for inspection’’ in Appendix

VI to this document. Any person wishing to have a detailed summary of Cayman Islands company law

or advice on the differences between it and the laws of any jurisdiction with which he is more familiar

is recommended to seek independent legal advice.


– IV-22 –


A. FURTHER INFORMATION ABOUT OUR COMPANY

1. Incorporation

Our Company was incorporated on 21 September 2020 in the Cayman Islands under the

Cayman Companies Act as an exempted company with limited liability. Our Company has

established its principal place of business in Hong Kong at 13/F, Pacific House, 20 Queen’s Road

Central, Hong Kong and was registered as a non-Hong Kong company under Part 16 of the

Companies Ordinance. Mr. Shiu and Ms. Kwan Wai Ling have been appointed as the authorised

representatives of our Company for the acceptance of service of process and notices in Hong

Kong. Our address for acceptance of service of process and notices on our Company in Hong

Kong is the same as its registered place of business in Hong Kong.

As our Company is incorporated in the Cayman Islands, it operates subject to the relevant

laws and regulations of the Cayman Islands and its constitution, comprising its Memorandum of

Association and Articles of Association. A summary of the Cayman company law and of the

Memorandum of Association and the Articles of Association is set out in ‘‘Summary of the

Constitution of the Company and Cayman Islands Company Law’’ in Appendix IV to this

document.

2. Changes in share capital of our Company

Save as disclosed in the section headed ‘‘History, Reorganisation and Corporate Structure’’

and in the section headed ‘‘— 3. Resolutions in writing passed by our Shareholders on [.]’’ below,

there has been no alteration in the share capital of our Company since its incorporation up to the

Latest Practicable Date.

3. Resolutions in writing passed by our Shareholders on [.]

Pursuant to the resolutions in writing passed by our Shareholders on [.] among others:

(a) our Company approved and adopted the Memorandum of Association and Articles of

Association conditionally upon the fulfilment of the Conditions (as defined below) and

with effect from the [REDACTED];

(b) conditional upon (i) the [REDACTED] granting the [REDACTED] of, and permission

to [REDACTED], the Shares in issue and to be issued pursuant to the [REDACTED]

and the [REDACTED] and Shares to be issued as mentioned in this document

(including the Shares which may be allotted and issued pursuant to the exercise of the

[REDACTED] and the exercise of any options which may be granted under the Share

Option Scheme); (ii) the [REDACTED] being fixed on or around the [REDACTED];

(iii) the execution and delivery of the [REDACTED] on or around the date specified in

this document; and (iv) the obligations of the [REDACTED] under the [REDACTED]

becoming unconditional and the [REDACTED] not being terminated in accordance with

its terms or otherwise (the ‘‘Conditions’’), in each case on or before such dates as may

be specified in the [REDACTED]:

(1) the [REDACTED] and the [REDACTED] were approved and our Directors were

authorised to effect the same and to allot and issue the new Shares pursuant to the

[REDACTED] and the [REDACTED] to rank pari passu with the then existing

Shares in all respects;

APPENDIX V STATUTORY AND GENERAL INFORMATION

– V-1 –


(2) the proposed [REDACTED] was approved and our Directors were authorised to

implement the [REDACTED];

(3) the [REDACTED] was approved;

(4) conditional upon the share premium account of our Company having sufficient

balance, or otherwise being credited as a result of the allotment and issue of the

[REDACTED] pursuant to the [REDACTED], our Directors were authorised to

capitalise an amount of HK$[REDACTED] (or any such amount any one Director

may determine) standing to the credit of the share premium account of our

Company by applying such sum in paying up in full at par [REDACTED] Shares

(or any such number of Shares any one Director may determine) for allotment and

issue to our Shareholders whose names appeared on the register of members of

our Company as at the close of business on the date which the said resolution is

passed (or another date as our Directors may direct) in proportion to their

respective shareholdings in our Company at that time (as near as possible without

involving fractions so that no fraction of a Share shall be allotted and issued),

each ranking pari passu in all respects with the then Shares in issue;

(5) the rules of the Share Option Scheme, the principal terms of which are set out in

the section headed ‘‘— G. Share Option Scheme’’ below, were approved and

adopted and our Directors were authorised to approve any amendment(s) to the

rules of the Share Option Scheme as may be acceptable or not objected to by the

Stock Exchange, and at their absolute discretion to grant options to subscribe for

Shares thereunder and to allot, issue and deal with the Shares pursuant to the

exercise of options which may be granted under the Share Option Scheme and to

take all such actions as they consider necessary or desirable to implement the

Share Option Scheme;

(6) a general unconditional mandate (the ‘‘Issue Mandate’’), pursuant to authority

granted by our Shareholders, was given to our Directors to exercise all powers of

our Company to allot, issue and deal with (including the power to make an offer

or agreement, or to grant securities which would or might require Shares to be

allotted and issued), otherwise than by way of rights issue, scrip dividend scheme

or similar arrangements providing for allotment and issue of Shares in lieu of the

whole or in part of any cash dividend in accordance with the Articles, or under the

[REDACTED] or the [REDACTED], or upon the exercise of the [REDACTED] or

any option(s) which may be granted under the Share Option Scheme or other

arrangements regulated under Chapter 17 of the Listing Rules, Shares with an

aggregate number not exceeding the sum of (aa) 20.0% of the aggregate number

of Shares in issue immediately following completion of the [REDACTED] and the

[REDACTED]; and (bb) the aggregate number of Shares which may be

repurchased by our Company pursuant to the authority granted to our Directors as

referred to in sub-paragraph (8) below, until the conclusion of the next annual

general meeting of our Company, or the date by which the next annual general

meeting of our Company is required by the Articles or any applicable law(s) of


– V-2 –


the Cayman Islands to be held, or the passing of an ordinary resolution by

Shareholders in general meeting, renewing, revoking or varying the authority

given to our Directors, whichever occurs first (the ‘‘Relevant Period’’);

(7) a general unconditional mandate (the ‘‘Repurchase Mandate’’) was given to our

Directors to exercise all powers of our Company to repurchase on the Stock

Exchange or on any other stock exchange on which the securities of our Company

may be listed and which is recognised by the SFC and the Stock Exchange for this

purpose, such number of Shares as will represent up to 10.0% of the aggregate

number of Shares in issue immediately following completion of the [REDACTED]

and the [REDACTED], such mandate to remain in effect during the Relevant

Period; and

(8) the general unconditional mandate mentioned in sub-paragraph (6) above was

extended by the addition to the aggregate number of Shares which may be allotted

or agreed to be allotted by our Directors pursuant to the Issue Mandate of an

amount representing the aggregate number of Shares repurchase by our Company

pursuant to the Repurchase Mandate, provided that such extended amount shall

not exceed 10.0% of the aggregate number of Shares in issue immediately

following completion of the [REDACTED] and the [REDACTED].

B. OUR SUBSIDIARIES

The particulars of our operating subsidiary are provided in the Accountant’s Report, the text of

which is set out in Appendix I to this document.

Save as disclosed in the section headed ‘‘History, Reorganisation and Corporate Structure’’ and

below, there has been no alteration in the share capital of any of the subsidiaries of our Company within

the two years immediately preceding the date of this document:

CMH

On 17 December 2018, CMH resolved written resolutions pursuant to the memorandum and

articles of association of CMH to amend its memorandum of association to authorise CMH, which

previously had a maximum of 50,000 shares of a single class to be issued each with a par value of

US$1.00, to issue a maximum of 5,000,000 shares of a single class each with a par value of

HK$1.00.

On 28 December 2018, the 9 shares of CMH then held by Mr. Shiu were cancelled, and

875,000 shares of CMH, representing 100% of the total issued shares in CMH, were allotted and

issued at par to CMI, as fully paid.

On 31 March 2019, shares of CMH were allotted and issued as shown below:

(a) 25,000 shares of CMH, representing 2.5% of the total issued shares of CMH, were

allotted and issued at a consideration of HK$25,000,000 to Double Expert Limited, as

fully paid;

(b) 23,000 shares of CMH, representing 2.3% of the total issued shares of CMH, were

allotted and issued at a consideration of HK$23,000,000 to Joyous Rainbow Holdings

Limited, as fully paid;


– V-3 –


(c) 20,000 shares of CMH, representing 2.0% of the total issued shares of CMH, were

allotted and issued at a consideration of HK$20,000,000 to Hong Kong Dashenlin Tradeand Investment Limited, as fully paid;

(d) 18,000 shares of CMH, representing 1.8% of the total issued shares of CMH, were

allotted and issued at a consideration of HK$18,000,000 to Asmex Investment Limited,as fully paid;

(e) 14,000 shares of CMH, representing 1.4% of the total issued shares of CMH, were

allotted and issued at a consideration of HK$14,000,000 to Goldstone InvestmentCapital Limited, as fully paid;

(f) 10,000 shares of CMH, representing 1.0% of the total issued shares of CMH, were

allotted and issued at a consideration of HK$10,000,000 to Cheung Hing HoldingsLimited, as fully paid;

(g) 5,000 shares of CMH, representing 0.5% of the total issued shares of CMH, were

allotted and issued at a consideration of HK$5,000,000 to Star List Limited, as fullypaid;

(h) 5,000 shares of CMH, representing 0.5% of the total issued shares of CMH, wereallotted and issued at a consideration of HK$5,000,000 to Clear Trillion Limited, as

fully paid; and

(i) 5,000 shares of CMH, representing 0.5% of the total issued shares of CMH, wereallotted and issued at a consideration of HK$5,000,000 to Pine Treasure Holdings

Limited, as fully paid.

On 23 August 2019, 5,075 fully paid shares of CMH, representing approximately 0.50% ofthe total issued shares of CMH, were allotted and issued at a consideration of HK$5,075 to CEKA

Limited.

On 30 October 2019, shares of CMH were allotted and issued as shown below:

(a) 4,145 shares of CMH, representing approximately 0.41% of the total issued shares ofCMH, were allotted and issued at a consideration of HK$4,145,406 to Dr. Ooi Gaik

Cheng, credited as fully paid;

(b) 2,007 shares of CMH, representing approximately 0.20% of the total issued shares of

CMH, were allotted and issued at a consideration of HK$2,007,452 to Ms. Tang WanYin, credited as fully paid;

(c) 1,975 shares of CMH, representing approximately 0.20% of the total issued shares of

CMH, were allotted and issued at a consideration of HK$1,975,390 to Mr. Lo WaiKeung, Peter, credited as fully paid;

(d) 1,249 shares of CMH, representing approximately 0.12% of the total issued shares of

CMH, were allotted and issued at a consideration of HK$1,249,519 to Dr. Lau Chu Pak,credited as fully paid; and

(e) 468 shares of CMH, representing approximately 0.05% of the total issued shares of

CMH, were allotted and issued at a consideration of HK$468,570 to Dr. Liu Chi Leung,credited as fully paid.


– V-4 –


On 1 August 2020, 10,304 shares of CMH, representing approximately 1.00% of the total

issued shares of CMH, were allotted and issued at par to Hong Kong Clinical Oncology Limited,

as fully paid, and 5,152 shares of CMH, representing approximately 0.50% of the total issued

shares of CMH, were allotted and issued at par to Centre for Obesity, Diabetes and Endocrinology

(CODE) Limited, as fully paid.

On 27 August 2020, 49,857 fully paid shares of CMH, representing approximately 4.62% of

the total issued shares of CMH, were allotted and issued at a consideration of HK$60,000,000 to

Unicorn Link Group Limited. On 15 September 2020, Unicorn Link Group Limited surrendered

6,925 shares of CMH. As a result, Unicorn Link Group Limited held 42,932 shares of CMH

representing approximately 4.00% of the total issued shares of CMH.

Medical Concierge Holding

On 20 August 2019, Medical Concierge Holding was incorporated in the BVI with limited

liability with the authority to issue up to 50,000 shares, each with a par value of US$1. On the

same day, one (1) share of Medical Concierge Holding, representing 50% of the total issued shares

of Medical Concierge Holding, was allotted and issued at par to Dr. Kenneth Tsang, credited as

fully paid, and one (1) share of Medical Concierge Holding, representing 50% of the total issued

shares of Medical Concierge Holding, was allotted and issued at par to Mr. Shiu, as fully paid.

On 2 March 2020, 98 shares of Medical Concierge Holding, representing 98% of the total

issued shares of Medical Concierge Holding, were allotted and issued at par to CMH, as fully paid.

Medical Concierge Management

On 16 August 2019, Medical Concierge Management was incorporated in the BVI with

limited liability with the authority to issue up to 50,000 shares, each with a par value of US$1.

On 20 August 2019, one (1) share of Medical Concierge Management, representing 50% of

the total issued shares of Medical Concierge Management, was allotted and issued at par to Dr.

Kenneth Tsang, as fully paid, and one (1) share of Medical Concierge Management, representing

50% of the total issued shares of Medical Concierge Management, was allotted and issued at par to

Mr. Shiu, as fully paid.

On 2 March 2020, 98 shares of Medical Concierge Management, representing 98% of the

total issued shares of Medical Concierge Management, were allotted and issued at par to Medical

Concierge Holding, as fully paid.

Medical Concierge Limited

On 16 August 2019, Medical Concierge Limited was incorporated in the BVI with limited

liability with the authority to issue up to 50,000 shares, each with a par value of US$1.

On 20 August 2019, one (1) share of Medical Concierge Limited, representing 50% of the

total issued shares of Medical Concierge Limited, was allotted and issued at par to Dr. Kenneth

Tsang, as fully paid, and one (1) share of Medical Concierge Limited, representing 50% of the

total issued shares of Medical Concierge Limited, was allotted and issued at par to Mr. Shiu, as

fully paid.


– V-5 –


On 2 March 2020, shares of Medical Concierge Limited were allotted and issued as shown

below:

(a) 68 shares of Medical Concierge Limited, representing 68% of the total issued shares of

Medical Concierge Limited, in Medical Concierge Limited were allotted and issued at

par to Medical Concierge Holding, as fully paid;

(b) 25 shares of Medical Concierge Limited, representing 25% of the total issued shares of

Medical Concierge Limited, were allotted and issued at par to Eminent Plus Group

Limited, an Independent Third Party, as fully paid; and

(c) 5 shares of Medical Concierge Limited, representing 5% of the total issued shares of

Medical Concierge Limited, were allotted and issued at par to Real Energetic Limited,

which is wholly owned by Ms. Yeung Kit Shun, a member of our senior management,

as fully paid.

Smart Winner

On 26 July 2019, Smart Winner was incorporated in the Republic of Seychelles with limited

liability with the authority to issue 1,000,000 shares, each with a par value of US$1. On the same

day, one (1) share of Smart Winner, representing 100% of the total issued share, was allotted and

issued at par to CMH, as fully paid.

Ace Alliance

On 25 May 2020, Ace Alliance was incorporated in the BVI with limited liability with the

authority to issue up to 50,000 shares, each with a par value of US$1.

On 15 November 2020, one (1) share of Ace Alliance, representing 100% of the total issued

share of Ace Alliance, was allotted and issued at par to CMH, as fully paid.

HKMC Medical Products

HKMC Medical Products was incorporated under the laws of Hong Kong as a limited

company on 1 April 2020. On the same day, one (1) share of HKMC Medical Products,

representing 100% of the total issued share capital of HKMC Medical Products, was allotted and

issued at a consideration of HK$1 to the initial subscriber, an Independent Third Party, as fully

paid.

On 19 February 2021, HKMC Medical Products allotted and issued 999 shares at HK$1 each

to Ace Alliance Global Limited, as fully paid.

HKID Limited

On 20 February 2020, HKID Limited allotted and issued 80,000 ordinary shares at HK$1

each to Smart Winner, credited as fully paid.

C. REPURCHASE BY OUR COMPANY OF OUR OWN SECURITIES

This paragraph sets out information required by the Stock Exchange to be included in this

document concerning the repurchase by our Company of our own securities.


– V-6 –


1. Relevant legal and regulatory requirements

The Listing Rules permit a company whose primary listing is on the Stock Exchange to

repurchase its securities on the Stock Exchange subject to certain restrictions, the more important

of which are summarised below:

(a) Shareholders’ approval

All proposed repurchases of securities (which must be fully paid up in the case of

shares) on the Stock Exchange by a company with a primary [REDACTED] on the Stock

Exchange must be approved in advance by an ordinary resolution of our Shareholders, either

by way of general mandate or by specific approval of a particular transaction.

Pursuant to the written resolutions of our Shareholders passed on [.], the Repurchase

Mandate was given to our Directors to exercise all powers of our Company to repurchase up

to 10% of the total number of the Shares of our Company in issue immediately following

completion of the [REDACTED] on the Stock Exchange or on any other stock exchange on

which the Shares may be listed (and which is recognised by the SFC and the Stock Exchange

for this purpose). The Repurchase Mandate will remain in effect during the Relevant Period.

(b) Source of funds

Repurchases must be funded out of funds legally available for the purpose in

accordance with the Articles of Association, the Listing Rules and the applicable laws of the

Cayman Islands. A listed company may not repurchase its own securities on the Stock

Exchange for a consideration other than cash or for settlement otherwise than in accordance

with the trading rules of the Stock Exchange as amended from time to time. Subject to the

foregoing, under the Cayman Companies Act, any repurchases by our Company may be made

out of our Company’s profits, out of our Company’s share premium account, out of the

proceeds of a new issue of Shares made for the purpose of the repurchase, or, if authorised

by the Articles of Association and subject to the provisions of the Cayman Companies Act,

out of capital. Any amount of premium payable on a repurchase over the par value of the

Shares to be repurchased must be out of either or both our Company’s profits or our

Company’s share premium account, or, if authorised by the Articles of Association and

subject to the provisions of the Cayman Companies Act, out of capital.

(c) Trading restrictions

A listed company may not issue or announce a proposed issue of new securities for a

period of 30 days immediately following a repurchase (other than an issue of securities

pursuant to an exercise of warrants, share options or similar instruments requiring the

company to issue securities which were outstanding prior to such repurchase) without the

prior approval of the Stock Exchange. In addition, a listed company is prohibited from

repurchasing its shares on the Stock Exchange if the purchase price is 5% or more than the

average closing market price for the five preceding trading days on which its shares were

traded on the Stock Exchange.

The Listing Rules also prohibit a listed company from repurchasing its securities on the

Stock Exchange if the repurchase would result in the number of listed securities which are in

the hands of the public falling below the relevant prescribed minimum percentage as required

by the Stock Exchange.


– V-7 –


A listed company is required to procure that the broker appointed by it to effect a

repurchase of securities discloses to the Stock Exchange such information with respect to the

repurchase as the Stock Exchange may require.

(d) Suspension of repurchase

Pursuant to the Listing Rules, a listed company may not make any repurchases of shares

after inside information has come to its knowledge until the information has been made

publicly available. In particular, during the period of one month immediately preceding the

earlier of: (i) the date of the board meeting (as such date is first notified to the Stock

Exchange in accordance with the Listing Rules) for the approval of a listed company’s results

for any year, half-year, quarter-year or any other interim period (whether or not required by

the Listing Rules); and (ii) the deadline for a listed company to publish an announcement of

its results for any year, half-year or quarter-year period under the Listing Rules, or any other

interim period (whether or not required under the Listing Rules), and in each case ending on

the date of the results announcement, the listed company may not repurchase its shares on the

Stock Exchange unless the circumstances are exceptional.

(e) Reporting requirements

Certain information relating to repurchases of securities on the Stock Exchange or

otherwise must be reported to the Stock Exchange not later than 30 minutes before the earlier

of the commencement of the morning trading session or any pre-opening session on the

following business day. In addition, a listed company’s annual report is required to disclose

details regarding repurchases of securities made during the year, including a monthly analysis

of the number of securities repurchased, the purchase price per share or the highest and

lowest price paid for all such purchase, where relevant, and the aggregate prices paid.

(f) Core connected persons

A listed company is prohibited from knowingly repurchasing securities on the Stock

Exchange from a ‘‘core connected person’’ (as defined in the Listing Rules) and a core

connected person is prohibited from knowingly selling his securities to the company on the

Stock Exchange.

2. Reasons for repurchase

Our Directors believe that it is in our Company’s and our Shareholders’ best interests for our

Directors to have general authority from our Shareholders to enable our Company to execute

repurchases of the Shares in the market. Such repurchases may, depending on market conditions

and funding arrangements at the time, lead to an enhancement of the net asset value per Share and/

or its earnings per Share and will only be made where our Directors believe that such repurchases

will benefit our Company and our Shareholders.

3. Funding of repurchases

In repurchasing securities, we may only apply funds legally available for such purpose in

accordance with the Articles of Association, the Listing Rules and the applicable laws of the

Cayman Islands.


– V-8 –


On the basis of our Company’s current financial position as disclosed in this document and

taking into account our Company’s current working capital position, our Directors consider that, if

the Repurchase Mandate were to be exercised in full, there might be a material adverse effect on

our working capital and/or our gearing position as compared with the position disclosed in this

document. However, our Directors do not propose to exercise the Repurchase Mandate to such an

extent as would, in the circumstances, have a material adverse effect on our Company’s working

capital requirements or the gearing levels which in the opinion of our Directors are from time to

time appropriate for us.

4. General

The exercise in full of the Repurchase Mandate, on the basis of [REDACTED] Shares in

issue immediately following the completion of the [REDACTED] and the [REDACTED] could

accordingly result in up to [REDACTED] Shares being repurchased by our Company during the

Relevant Period.

None of our Directors or, to the best of their knowledge having made all reasonable

enquiries, any of their respective close associates currently intends to sell any Shares to us or our

subsidiaries.

Our Directors have undertaken to the Stock Exchange that, so far as the same may be

applicable, they will exercise the Repurchase Mandate in accordance with the Listing Rules and

the applicable laws of the Cayman Islands.

If, as a result of a repurchase of Shares, a Shareholder’s proportionate interest in the voting

rights of our Company increases, such increase will be treated as an acquisition for the purposes of

the Takeovers Code. Accordingly, a Shareholder or a group of Shareholders acting in concert

(within the meaning of the Takeovers Code), depending on the level of increase of our

Shareholders’ interests, could obtain or consolidate control of our Company and become obliged to

make a mandatory offer in accordance with Rule 26 of the Takeovers Code as a result of a

repurchase of Shares made immediately after the [REDACTED] of Shares on the Stock Exchange.

Save as aforesaid, our Directors are not aware of any consequences which would arise under the

Takeovers Code as a consequence of any repurchases pursuant to the Repurchase Mandate.

Any repurchase of Shares that results in the number of Shares held by the public being

reduced to less than 25% of the Shares then in issue could only be implemented if the Stock

Exchange agrees to waive the Listing Rules requirements regarding the public shareholding

referred to above. A waiver of this provision is not normally granted other than in exceptional

circumstances.

No core connected person (as defined in the Listing Rules) of our Company has notified us

that he or she or it has a present intention to sell Shares to us, or has undertaken not to do so, if

the Repurchase Mandate is exercised.

D. CORPORATE REORGANISATION

The companies comprising our Group underwent the Reorganisation in preparation for the

[REDACTED] of the Shares on the Stock Exchange. Please see the section headed ‘‘History,

Reorganisation and Corporate Structure’’ for further details.


– V-9 –


E. FURTHER INFORMATION ABOUT OUR BUSINESS

1. Summary of material contracts

The following contracts (not being contracts entered into in the ordinary course of business)

have been entered into by members of our Group within the two years preceding the date of this

document and are or may be material:

(a) the subscription agreement dated 29 March 2019 entered into between CMH, Asmex

Investment Limited, Pine Treasure Holdings Limited, Joyous Rainbow Holdings

Limited, Goldstone Investment Capital Limited, Double Expert Limited, Hong Kong

Dashenlin Trade and Investment Limited, Cheung Hing Holdings Limited, Star List

Limited and Clear Trillion Limited regarding the subscription of approximately 1.8%,

0.5%, 2.3%, 1.4%, 2.5%, 2.0%, 1.0%, 0.5%, and 0.5% of total issued shares in CMH,

respectively;

(b) the shareholders’ agreement dated 31 March 2019 entered into between CMH, CHG,

CMI, Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing, Dr.

Jenny Tsang, Wealth Basin, Les Trois, Central Medical Management, Dr. Barbara Tam,

Dr. Kenneth Ng, Dr. Gordon Chau, Dr. Ada Ma, Dr. Boron Cheng, Dr. Clement Lee,

Dr. Lo Wai Kei, Dr. Matthew Ng, Asmex Investment Limited, Pine Treasure Holdings

Limited, Joyous Rainbow Holdings Limited, Goldstone Investment Capital Limited,

Double Expert Limited, Hong Kong Dashenlin Trade and Investment Limited, Cheung

Hing Holdings Limited, Star List Limited, Clear Trillion Limited, the guarantor of

Wealth Basin, the guarantor of Les Trois and the guarantors of Central Medical

Management as supplemented by (i) a deed of adherence dated 23 August 2019 made

between, among others, CMH, CEKA Limited and the guarantor of CEKA Limited; (ii)

a deed of adherence dated 30 October 2019 made between, among others, CMH, Dr.

Lau Chu Pak, Dr. Liu Chi Leung, Dr. Ooi Gaik Cheng, Ms. Tang Wan Yin and Mr. Lo

Wai Keung, Peter; (iii) a deed of adherence dated 1 August 2020 made between, among

others, CMH, Hong Kong Clinical Oncology Limited, Centre for Obesity, Diabetes and

Endocrinology (CODE) Limited, the guarantor of Hong Kong Clinical Oncology

Limited, and the guarantor of Centre for Obesity, Diabetes and Endocrinology (CODE)

Limited; (iv) a deed of adherence dated 27 August 2020 made between, among others,

CMH, Unicorn Link Group Limited and the guarantor of Unicorn Link Group Limited

and (v) a supplemental agreement dated 22 October 2020 made between, among others,

CMH, CHG, CMI, Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu

Leung Wing, Dr. Jenny Tsang, Wealth Basin, Les Trois, Central Medical Management,

Dr. Barbara Tam, Dr. Kenneth Ng, Dr. Gordon Chau, Dr. Ada Ma, Dr. Boron Cheng,

Dr. Clement Lee, Dr. Lo Wai Kei, Dr. Matthew Ng, Asmex Investment Limited, Pine

Treasure Holdings Limited, Joyous Rainbow Holdings Limited, Goldstone Investment

Capital Limited, Double Expert Limited, Hong Kong Dashenlin Trade and Investment

Limited, Cheung Hing Holdings Limited, Star List Limited, Clear Trillion Limited,

CEKA Limited, Dr. Lau Chu Pak, Dr. Liu Chi Leung, Dr. Ooi Gaik Cheng, Ms. Tang

Wan Yin, Mr. Lo Wai Keung, Peter, Hong Kong Clinical Oncology Limited, Centre for

Obesity, Diabetes and Endocrinology (CODE) Limited and Unicorn Link Group

Limited;


– V-10 –


(c) the subscription agreement dated 23 August 2019 entered into between CMH and

CEKA Limited regarding the subscription of approximately 0.50% of the total issued

shares in CMH;

(d) the share sale and purchase agreement with the supplemental agreement both dated 30

October 2019 entered into between Dr. Lau Chu Pak and Dr. Liu Chi Leung, as

vendors, and Smart Winner as purchaser regarding the sale of 22% of the issued share

capital of, and shareholders’ loans to, Pegasus;

(e) the share sale and purchase agreement with the supplemental agreement both dated 30

October 2019 entered into between Mrs. Tsang, Dr. Chu Kin Wah, Mr. Fok Manson,

Hong Kong Oncology Center Company Limited, Ms. Liu Pik Ching Emma as executrix

of the will of Mr. Hu Hsing Cheng Wayne James, deceased, Mr. Teo Man Lung Peter

and Mr. Yiu Sing Nam, as vendors, and Smart Winner as purchaser regarding the sale

of 78% of the issued share capital of, and shareholders’ loans to, Pegasus;

(f) the share sale and purchase agreement with the supplemental agreement both dated 30

October 2019 entered into between Ms. Tang Wan Yin and Mr. Lo Wai Keung, Peter,

as vendor, and Smart Winner as purchaser regarding the sale of 49% of the issued share

capital of, and shareholders’ loans to, Pixel;

(g) the share sale and purchase agreement with the supplemental agreement both dated 30

October 2019 entered into between Dr. Ooi Gaik Cheng as vendor and Smart Winner as

purchaser regarding the sale of 51% of the issued share capital of, and shareholders’

loans to, Pixel;

(h) the instrument of transfer and bought and sold note both dated 30 October 2019 entered

into between Mr. Yiu Sing Nam as the seller and Pegasus as the purchaser regarding the

sale and purchase of 0.005% of total issued shares in HKID Limited;

(i) the instrument of transfer dated 30 October 2019 entered into between Mr. Yiu Sing

Nam as the seller and Pegasus as the purchaser regarding the sale and purchase of

48.995% of total issued shares in HKID Limited;

(j) the instrument of transfer and bought and sold note both dated 30 October 2019 entered

into between Ms. Tang Wan Yin as the seller and Pixel as the purchaser regarding the

sale and purchase of 0.005% of total issued shares in HKID Limited;

(k) the instrument of transfer dated 30 October 2019 entered into between Ms. Tang Wan

Yin as the seller and Pixel as the purchaser regarding the sale and purchase of 50.995%

of total issued shares in HKID Limited;

(l) the instrument of transfer dated 2 March 2020 entered into between Dr. Kenneth Tsang

as the seller and CMH as the purchaser regarding the sale and purchase of 1% of total

issued shares in Medical Concierge Holding;

(m) the instrument of transfer dated 2 March 2020 entered into between Mr. Shiu as the

seller and CMH as the purchaser regarding the sale and purchase of 1% of total issued

shares in Medical Concierge Holding;


– V-11 –


(n) the instrument of transfer dated 2 March 2020 entered into between Dr. Kenneth Tsang

as the seller and Medical Concierge Holding as the purchaser regarding the sale and

purchase of 1% of total issued shares in Medical Concierge Management;

(o) the instrument of transfer dated 2 March 2020 entered into between Mr. Shiu as the

seller and Medical Concierge Holding as the purchaser regarding the sale and purchase

of 1% of total issued shares in Medical Concierge Management;

(p) the instrument of transfer dated 2 March 2020 entered into between Dr. Kenneth Tsang

as the seller and Medical Concierge Holding as the purchaser regarding the sale and

purchase of 1% of total issued shares in Medical Concierge Limited;

(q) the instrument of transfer dated 2 March 2020 entered into between Mr. Shiu as the

seller and Medical Concierge Holding as the purchaser regarding the sale and purchase

of 1% of total issued shares in Medical Concierge Limited;

(r) the instrument of transfer and bought and sold note both dated 25 March 2020 entered

into between Pixel as the seller and Smart Winner as the purchaser regarding the sale

and purchase of 51% of total issued shares in HKID Limited;

(s) the instrument of transfer and bought and sold note both dated 25 March 2020 entered

into between Pegasus as the seller and Smart Winner as the purchaser regarding the sale

and purchase of 49% of total issued shares in HKID Limited;

(t) the instrument of transfer and bought and sold note both dated 27 March 2020 entered

into between Smart Winner as the seller and Capital Pilot Limited as the purchaser

regarding the sale and purchase of 100% of total issued shares in Pegasus;

(u) the instrument of transfer and bought and sold note both dated 27 March 2020 entered

into between Smart Winner as the seller and Capital Pilot Limited as the purchaser

regarding the sale and purchase of 100% of total issued shares in Pixel;

(v) the instrument of transfer and bought and sold note both dated 1 June 2020 entered into

between the initial subscriber as the seller and CMH as the purchaser regarding the sale

and purchase of 100% of total issued shares in HKMC Medical Products;

(w) the subscription agreement dated 1 August 2020 entered into between the CMH and

Hong Kong Clinical Oncology Limited regarding the subscription of approximately

1.0% of the total issued shares in CMH;

(x) the subscription agreement dated 1 August 2020 entered into between CMH and Centre

for Obesity, Diabetes and Endocrinology (CODE) Limited regarding the subscription of

approximately 0.50% of the total issued shares in CMH;

(y) the instrument of transfer and bought and sold note both dated 12 August 2020 entered

into between Eminent Plus Group Limited as the seller and Medical Concierge Holding

as the purchaser regarding the sale and purchase of 25% of total issued shares in

Medical Concierge Limited;


– V-12 –


(z) the subscription agreement dated 27 August 2020 together with the supplemental

agreement dated 15 September 2020 entered into between CMH and Unicorn Group

Link Limited regarding the subscription of approximately 4.00% of the total issued

shares in CMH;

(aa) the share swap agreement dated 23 October 2020 entered into between, among others,

our Company, CMI, Asmex Investment Limited, Pine Treasure Holdings Limited,

Joyous Rainbow Holdings Limited, Goldstone Investment Capital Limited, Double

Expert Limited, Hong Kong Dashenlin Trade and Investment Limited, Cheung Hing

Holdings Limited, Star List Limited, Clear Trillion Limited, CEKA Limited, Dr. Lau

Chu Pak, Dr. Liu Chi Leung, Dr. Ooi Gaik Cheng, Ms. Tang Wan Yin, Mr. Lo Wai

Keung, Peter, Hong Kong Clinical Oncology Limited, Centre for Obesity, Diabetes and

Endocrinology (CODE) Limited and Unicorn Link Group Limited, regarding the shares

of CMH, upon completion of which CMH is held as to 100% by our Company;

(bb) the instrument of transfer and bought and sold note both dated 9 March 2021 entered

into between CMH as the seller and Ace Alliance as the purchaser regarding the sale

and purchase of 0.1% of the total issued shares in HKMC Medical Products;

(cc) the Deed of Indemnity;

(dd) the Deed of Non-competition; and

(ee) the [REDACTED].

2. Our intellectual property rights

As at the Latest Practicable Date, we had registered the following intellectual property rights

which are material to our business.

(a) Domain name

As at the Latest Practicable Date, we had registered the following domain names which

are material to our business:

Domain Name Registrant Expiry Date

hkmc.co Hosting Speed 16 October 2022

hkmedicalconsultants.com Hosting Speed 6 December 2022

hk-imaging.com Hosting Speed 28 December 2022

centralpharm.com.hk Marcaria.com 1 March 2022

centralpharm.hk Marcaria.com 27 February 2022

hkcentralpharm.com Marcaria.com 27 February 2026

hkmedicalconcierge.com Marcaria.com 30 March 2030


– V-13 –


(b) Trademark

As at the Latest Practicable Date, we had registered the following trademarks, (in both

colour, and black and white versions) which are material to our business:

TrademarkPlace of

Registration Registrant ClassRegistration

No. Expiry date

Hong Kong Central Medical

Consultants CompanyLimited (currentlyknown as HKMC Dental

& Maxillofacial CentreLimited)

5, 10, 41, 44 304474053 26 March 2028

Hong Kong Hong Kong MedicalConsultants Limited

5, 10, 41, 44 304458853 13 March 2028

Hong Kong Hong Kong Medical

Consultants Limited

44 303231693 10 December 2024

Hong Kong Hong Kong Imaging andDiagnostic CentreLimited

10, 44 303177063 23 October 2024

Hong Kong CentralPharm CompanyLimited

5, 10, 41, 44 305218308 12 March 2030

Save as disclosed above, there were no other trade or service marks, registered designs,

patents, domain names or other intellectual or industrial property rights which are or may be

material to the business of our Group as at the Latest Practicable Date.

F. FURTHER INFORMATION ABOUT DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

1. Disclosure of interests

(a) Interests and short positions of our Directors and chief executives of our Company inthe shares, underlying shares or debentures of our Company and our associatedcorporations

Immediately following the completion of the [REDACTED] and the [REDACTED]

(without taking into account the Shares which may be issued pursuant to the exercise of the

[REDACTED] and any Shares to be issued upon the exercise of any options which may be

granted under the Share Option Scheme), the interests or short positions of our Directors and

chief executive of our Company in the shares, underlying shares and debentures of our

Company or our associated corporations (within the meaning of Part XV of the SFO) which

will be required to be notified to our Company and the Stock Exchange pursuant to Divisions

7 and 8 of Part XV of the SFO (including interests or short positions which they were taken

or deemed to have under such provisions of the SFO) or which will be required, pursuant to


– V-14 –


Section 352 of the SFO, to be entered into in the register referred to in that section, or which

will be required, pursuant to the Model Code for Securities Transactions by Directors of

Listed Issuers to be notified to our Company and the Hong Kong Stock Exchange, once the

Shares are listed, are as follows:

(i) Interests in our Company immediately after completion of the [REDACTED] and

the [REDACTED]

Name of Director Capacity/Nature of interestNumber of Sharesheld/interested(1)

Approximatepercentage ofshareholding

Dr. Kenneth Tsang Interest in a controlled corporation/Interest of concert party(2)


Dr. Adam Leung Interest in a controlled corporation/Interest of concert party(2)


Mr. Shiu Interest in a controlled corporation/Interest of concert party(2)


Mrs. Chen Interest in a controlled corporation/

Interest of concert party(2)[REDACTED] [REDACTED]

Notes:

(1) The letter ‘‘L’’ denotes the person’s long position in the relevant shares.

(2) On 23 October 2020, CHG, Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. Chu

Leung Wing, Dr. Jenny Tsang, Mr. Shiu, Mrs. Chen, Peak Summit, Heroic Wealth, MastermindIntelligence, Grateful Mind, Property Linkage, Wealth Basin and Les Trois entered into theConcert Party Deed, confirming, among other things, that they are parties acting in concert since

the date on which they became interested in our Group, and will continue to act in concert witheach other after [REDACTED]. Accordingly, by virtue of the SFO, Dr. Kenneth Tsang, Dr.Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing, Dr. Jenny Tsang, Mr. Shiu, Mrs. Chen,Peak Summit, Heroic Wealth, Mastermind Intelligence, Grateful Mind, Property Linkage, Wealth

Basin and Les Trois are deemed to be interested in all the Shares held by CHG.

(ii) Interests in our associated corporations

Name of associated corporation: CHG

Name of Director Number of shares held/interested


Dr. Kenneth Tsang(1) 3,393,261 42.42%

Dr. Adam Leung(1) 1,899,355 23.74%

Mr. Shiu(1) 728,000 9.10%

Mrs. Chen(1) 400,000 5.00%


– V-15 –


Name of associated corporation: Peak Summit



Dr. Kenneth Tsang 1 100%

Name of associated corporation: Heroic Wealth



Dr. Adam Leung 1 100%

Name of associated corporation: Wealth Basin



Mr. Shiu 1 100%

Name of associated corporation: Les Trois



Mrs. Chen 1 100%

Name of associated corporation: HKID (MRI)



Dr. Kenneth Tsang (jointly

held with Mrs. Tsang)(2)300 3%

Name of associated corporation: HKID (Lab)



Dr. Kenneth Tsang (jointly

held with Mrs. Tsang)(2)300 3%


– V-16 –


Notes:

(1) On 23 October 2020, CHG, Dr. Kenneth Tsang, Dr. Adam Leung, Dr. Jason Fong, Dr. ChuLeung Wing, Dr. Jenny Tsang, Mr. Shiu, Mrs. Chen, Peak Summit, Heroic Wealth, MastermindIntelligence, Grateful Mind, Property Linkage, Wealth Basin and Les Trois entered into the

Concert Party Deed, confirming, among other things, that they are parties acting in concert sincethe date on which they became interested in our Group, and will continue to act in concert witheach other after [REDACTED]. Accordingly, by virtue of the SFO, Dr. Kenneth Tsang, Dr.

Adam Leung, Dr. Jason Fong, Dr. Chu Leung Wing, Dr. Jenny Tsang, Mr. Shiu, Mrs. Chen,Peak Summit, Heroic Wealth, Mastermind Intelligence, Grateful Mind, Property Linkage, WealthBasin and Les Trois are deemed to be interested in all the Shares held by CHG.

(2) Dr. Kenneth Tsang and Mrs. Tsang are spouses.

(b) Interests and short positions of substantial shareholders in the Shares or underlyingShares of our Company

Save as disclosed in the section headed ‘‘Substantial Shareholders’’, our Directors are

not aware of any other person, not being a Director or chief executive of our Company, who

will have an interest or short position in our Shares which would fall to be disclosed to our

Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of

the SFO, or who will be, directly or indirectly, interested in 10% or more of the nominal

value of any class of share capital carrying rights to vote in all circumstances at general

meetings of any other member of our Group.

2. Directors’ service contracts and letters of appointment

(a) Executive Directors’ service contracts

Each of our executive Directors has entered into a service contract with our Company.

The terms and conditions of each of such service contracts are similar in all material aspects.

Each service contract is for an initial term of three years with effect from the [REDACTED]

and shall continue thereafter unless and until it is terminated by not less than three months’

notice in writing served by either party thereto. Under the service contracts, the initial annual

salary payable to our executive Directors is as follows:

Name Amount

(HK$)

Dr. Kenneth Tsang 120,000

Dr. Adam Leung 120,000

Mr. Shiu 120,000

Mrs. Chen 120,000

Each of our executive Directors is entitled to a discretionary bonus, the amount of

which is determined with reference to the operating results of our Group and the performance

of that executive Director. Each of our executive Directors shall abstain from voting and not

be counted in the quorum in respect of any resolution of the Board regarding the amount of

annual salary and discretionary bonus payable to himself or herself.


– V-17 –


(b) Independent non-executive Directors’ letters of appointment

Each of our independent non-executive Directors has entered into a letter of

appointment with our Company on [.]. Each letter of appointment is for an initial term of

one year commencing from the [REDACTED] and shall continue thereafter unless terminated

by either party giving at least one month’s notice in writing. Under the letters of

appointment, the annual director’s fees payable to our independent non-executive Directors

are as follows:

Name Amount

(HK$)

Mr. David Michael Norman 240,000Mr. Ip Koon Wing Ernest 240,000Mr. Wong Kwok Shing Thomas 240,000

3. Director’s remuneration

The aggregate remuneration (including salaries, bonuses, allowances and benefits in kind, andpension scheme contributions) paid to our Directors for the three years ended 31 March 2021 andthe six months ended 30 September 2021 were nil, nil, nil and nil, respectively.

There was no arrangement under which a Director waived or agreed to waive anyremuneration for any of the three years ended 31 March 2021 and the six months ended 30September 2021. Please see the section headed ‘‘Business’’ for details.

Save as disclosed above, no other payments have been made or are payable in respect of thethree years ended 31 March 2021 and the six months ended 30 September 2021 by any member ofour Group to any of our Directors.

Under the arrangements currently in force, our Company estimates the aggregateremuneration payable to, and benefits in kind receivable by (excluding any discretionary bonuses),our Directors in respect of the year ending 31 March 2022 to be approximately HK$0.1 million.

During the Track Record Period, no remuneration was paid by us to, or receivable by, ourDirectors or the five highest paid individuals as an inducement to join or upon joining ourCompany. No compensation was paid by us to, or receivable by, our Directors, former Directors,or the five highest-paid individuals for the Track Record Period for the loss of any office inconnection with the management of the affairs of any subsidiary of our Company.

4. Personal guarantees

Save as disclosed in the section headed ‘‘Relationship with our Controlling Shareholders’’ inthis document, as at the Latest Practicable Date, our Directors had not provided personalguarantees in favour of lenders in connection with banking facilities granted to our Group.

5. Agency fee or commission received

Save as disclosed in this document, no commissions, discounts, brokerages, or other specialterms have been granted by our Group to any person (including our Directors and experts referredto in the section headed ‘‘— H. Other Information — 6. Qualifications of Experts’’ below) inconnection with the issue or sales of any capital or security of our Company or any of member ofour Group within the two years preceding the date of this document.


– V-18 –


6. Related party transactions

Details of the related-party transactions are set out under Note 33 to the Accountant’s Report

set out in Appendix I to this document.

7. Disclaimers

Save as disclosed in this document:

(i) none of our Directors or chief executives of our Company has any interest or short

position in the shares, underlying shares and debentures of our Company or any of its

associated corporations (within the meaning of Part XV of the SFO) which will have to

be notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of

Part XV of the SFO (including interests and short positions which they are taken or

deemed to have under such provisions of the SFO) or which will be required pursuant

to Section 352 of the SFO, to be entered in the register referred to therein, or which

will be required, pursuant to the Model Code for Securities Transactions by Directors of

Listed Issuers under the Listing Rules, to be notified to our Company and the Stock

Exchange, in each case once the Shares are listed on the Stock Exchange;

(ii) so far as is known to any Director or chief executive of our Company, no person has an

interest or short position in the shares and underlying Shares of our Company which

would fall to be disclosed to our Company and the Stock Exchange under the

provisions of Divisions 2 and 3 of Part XV of the SFO, or is, directly or indirectly,

interested in 10% or more of the nominal value of any class of share capital carrying

rights to vote in all circumstances at general meetings of any other member of our

Group;

(iii) none of our Directors nor any of the persons listed in the section headed ‘‘— H. Other

Information — 6. Qualifications of Experts’’ below is interested in the promotion of, or

in any assets which have been, within the two years immediately preceding the issue of

this document, acquired or disposed of by or leased to any member of our Group, or are

proposed to be acquired or disposed of by or leased to any member of our Group;

(iv) none of our Directors is materially interested in any contract or arrangement subsisting

with our Group subsisting at the date of this document which is unusual in its nature or

conditions or which is significant in relation to the business of our Group taken as a

whole;

(v) save in connection with the [REDACTED], none of the persons listed in the section

headed ‘‘— H. Other Information — 6. Qualifications of Experts’’ below has any

shareholding in any member of our Group or the right (whether legally enforceable or

not) to subscribe for or to nominate persons to subscribe for securities in any member

of our Group;

(vi) save for the [REDACTED], none of the persons listed in the section headed ‘‘— H.

Other Information — 6. Qualifications of Experts’’ below is materially interested in any

contract or arrangement subsisting at the date of this document which is significant in

relation to the business of our Group taken as a whole;


– V-19 –


(vii) within the two years preceding the date of this document, no share or loan capital ofour Company or any of its subsidiaries is under option or is agreed conditionally orunconditionally to be put under option; and

(viii) so far as is known to our Directors, none of our Directors or their close associates orany Shareholder (which to the knowledge of our Directors owns 5% or more of theissued share capital of our Company) has any interest in any of the five largestsuppliers or customers of our Group.

G. SHARE OPTION SCHEME

The followings are the principal terms of the Share Option Scheme conditionally adopted under thewritten resolutions of our Shareholders passed on [.]:

1. Conditions

(a) This Share Option Scheme is conditional upon:

(i) the [REDACTED] granting the [REDACTED] of and permission to [REDACTED]such number of Shares representing the General Scheme Limit (as defined inparagraph 7(b)) to be allotted and issued by the Company pursuant to the exerciseof options in accordance with the terms and conditions of this Share OptionScheme; and

(ii) the passing of the necessary resolutions to approve and adopt this Share OptionScheme in general meeting or by way of written resolutions of the shareholder(s)of the Company.

(b) If the conditions referred to in paragraph 1(a) are not satisfied on or before the datefalling 30 days after the date of this document, this Scheme shall forthwith determineand no person shall be entitled to any rights or benefits or be under any obligationsunder or in respect of this Share Option Scheme.

(c) Reference in paragraph 1(a)(i) to the [REDACTED] formally granting the[REDACTED] and permission referred to therein shall include any such [REDACTED]and permission which are granted subject to the fulfilment of any condition precedentor condition subsequent.

2. Purpose, duration and administration

(a) The purpose of this Share Option Scheme is to enable our Company to grant options tothe Eligible Participants (as defined in paragraph 3(a) below) as incentives or rewardsfor their contribution to our Group.

(b) This Share Option Scheme shall be subject to the administration of the Directors whosedecision on all matters arising in relation to this Share Option Scheme or theirinterpretation or effect shall (save for the grant of options referred to in paragraph 3(b)which shall be approved in the manner referred to therein and save as otherwiseprovided herein) be final and binding on all persons who may be affected thereby.

(c) Subject to paragraphs 1 and 13, this Scheme shall be valid and effective until the closeof business of our Company on the date which falls 10 years (the ‘‘Termination Date’’)after the date on which the Share Option Scheme is adopted upon fulfilment of thecondition (the ‘‘Adoption Date’’), after which period no further options may be issued


– V-20 –


but the provisions of this Share Option Scheme shall remain in force to the extentnecessary to give effect to the exercise of any Options granted or exercised prior theretoor otherwise as may be required in accordance with the provisions of this Share OptionScheme.

(d) An Eligible Participant who accepts the offer in accordance with the terms of the Share

Option Scheme or (where the context so permits and as referred to in paragraph 5(d)(i))

his personal representative (the ‘‘Grantee’’) shall ensure that the acceptance of an

Offer, the holding and exercise of his option in accordance with this Share Option

Scheme, the allotment and issue of Shares to him upon the exercise of his option and

the holding of such Shares are valid and comply with all laws, legislation and

regulations including all applicable exchange control, fiscal and other laws to which he

is subject. The Directors may, as a condition precedent of making an offer and allotting

Shares upon an exercise of an option, require an Eligible Participant or a Grantee (as

the case may be) to produce such evidence as it may reasonably require for such

purpose.

3. Grant of options

(a) Subject to paragraph 3(b), the Directors shall, in accordance with the provisions of the

Share Option Scheme and the Listing Rules, be entitled but shall not be bound at any

time within a period of 10 years commencing from the Adoption Date to make an offer

to any person belonging to the following classes of participants (the ‘‘EligibleParticipants’’) to subscribe, and no person other than the Eligible Participant named in

such offer may subscribe, for such number of Shares (being a board lot for dealings in

the Shares on the Stock Exchange or an integral multiple thereof) at such price per

Share at which a Grantee may subscribe for the Shares on the exercise of an option, as

determined in accordance with paragraph 4 (the ‘‘Subscription Price’’), as the Directors

shall, subject to paragraph 4, determine:

(i) any employee (whether full time or part time, including any executive director but

excluding any non-executive director) of our Company, any subsidiary or any

entity in which any member of our Group holds any equity interest (the ‘‘InvestedEntity’’);

(ii) any non-executive directors (including independent non-executive directors) of the

Company, any subsidiary or any Invested Entity;

(iii) any supplier of goods or services to any member of our Group or any Invested

Entity;

(iv) any customer of any member of our Group or any Invested Entity;

(v) any person or entity that provides research, development or other technological

support to any member of our Group or any Invested Entity;

(vi) any shareholder of any member of our Group or any Invested Entity or any holder

of any securities issued by any member of our Group or any Invested Entity;

(vii) any adviser (professional or otherwise) or consultant to any area of business or

business development of any member of our Group or any Invested Entity; and


– V-21 –


(viii) any other group or classes of participants who have contributed or may contribute

by way of joint venture, business alliance or other business arrangement to the

development and growth of our Group,

and, for the purposes of this Scheme, the Offer may be made to any company wholly

owned by one or more Eligible Participants.

For the avoidance of doubt, the grant of any options by the Company for the

subscription of Shares or other securities of our Group to any person who falls within

any of the above classes of Eligible Participants shall not, by itself, unless the Directors

otherwise determine, be construed as a grant of option under this Share Option Scheme.

(b) Without prejudice to paragraph 7(d) below, the making of an offer to any Director,

chief executive or substantial shareholder of the Company, or any of their respective

associates must be approved by the independent non-executive Directors (excluding any

independent non-executive Director who or whose associate is the proposed Grantee of

an option).

(c) The eligibility of any of the Eligible Participants to an offer shall be determined by the

Directors from time to time on the basis of the Directors’ opinion as to his contribution

to the development and growth of our Group.

(d) An offer shall be made to an Eligible Participant in writing (and unless so made shall

be invalid) in such form as the Directors may from time to time determine, either

generally or on a case-by-case basis, specifying the number of Shares under the option

and the ‘‘Option Period’’ (which means, in respect of any particular option, a period,

(which may not expire later than 10 years from the offer date of that option) to be

determined and notified by our Directors to the Grantee thereof and, in the absence of

such determination, from the offer date to the earlier of (i) the date on which such

option lapse under the provision of paragraph 6; and (ii) 10 years from the offer date of

that option) in respect of which the offer is made and further requiring the Eligible

Participant to undertake to hold the option on the terms on which it is to be granted and

to be bound by the provisions of the Share Option Scheme and shall remain open for

acceptance by the Eligible Participant concerned (and by no other person) for a period

of up to 21 days from the offer date.

(e) An offer shall state, in addition to the matters specified in paragraph 3(d), the

following:

(i) the name, address and position of the Eligible Participant;

(ii) the number of Shares under the option in respect of which the offer is made and

the Subscription Price for such Shares;

(iii) the Option Period in respect of which the offer is made or, as the case may be, the

Option Period in respect of separate parcels of Shares under the option comprised

in the offer;

(iv) the last date by which the offer must be accepted (which may not be later than 21

days from the offer date);


– V-22 –


(v) the procedure for acceptance;

(vi) the performance target(s) (if any) that must be attained by the Eligible Participantbefore any option can be exercised;

(vii) such other terms and conditions of the offer as may be imposed by the Directorsas are not inconsistent with the Share Option Scheme; and

(viii) a statement requiring the Eligible Participant to undertake to hold the option onthe terms on which it is to be granted and to be bound by the provisions of theShare Option Scheme including, without limitation, the conditions specified in,inter alia, paragraphs 2(d) and 5(a).

(f) An offer shall have been accepted by an Eligible Participant in respect of all Sharesunder the option which are offered to such Eligible Participant when the duplicate lettercomprising acceptance of the offer duly signed by the Eligible Participant together witha remittance in favour of our Company of HK$1.00 by way of consideration for thegrant thereof is received by our Company within such time as may be specified in theoffer (which shall not be later than 21 days from the offer date). Such remittance shallin no circumstances be refundable.

(g) Any offer may be accepted by an Eligible Participant in respect of less than the numberof Shares under the option which are offered provided that it is accepted in respect of aboard lot for dealings in the Shares on the Stock Exchange or an integral multiplethereof and such number is clearly stated in the duplicate letter comprising acceptanceof the offer duly signed by such Eligible Participant and received by our Companytogether with a remittance in favour of our Company of HK$1.00 by way ofconsideration for the grant thereof within such time as may be specified in the offer(which shall not be later than 21 days from the offer date). Such remittance shall in nocircumstances be refundable.

(h) Upon an offer being accepted by an Eligible Participant in whole or in part inaccordance with paragraph 3(f) or 3(g), an option in respect of the number of Shares inrespect of which the offer was so accepted will be deemed to have been granted by ourCompany to such Eligible Participant on the offer date. To the extent that the offer isnot accepted within the time specified in the offer in the manner indicated in paragraph3(f) or 3(g), it will be deemed to have been irrevocably declined.

(i) The Option Period of an option may not end later than 10 years after the offer date ofthat option.

(j) Options will not be listed or dealt in on the Stock Exchange.

(k) For so long as the Shares are listed on the Stock Exchange:

(i) our Company may not grant any options after inside information has come to ourknowledge until we have announced the information. In particular, we may notgrant any option during the period commencing one month immediately before theearlier of:

(aa) the date of the board meeting (as such date is first notified to the StockExchange under the Listing Rules) for approving our Company’s results forany year, half-year, quarterly or any other interim period (whether or notrequired under the Listing Rules); and


– V-23 –


(bb) the deadline for our Company to announce our results for any year or half-

year under the Listing Rules, or quarterly or any other interim period

(whether or not required under the Listing Rules), and ending on the date of

the results; and

(ii) our Directors may not make any offer to an Eligible Participant who is a Director

during the periods or times in which the Directors are prohibited from dealing in

Shares pursuant to the Model Code for Securities Transactions by Directors of

Listed Issuers prescribed by the Listing Rules or any corresponding code or

securities dealing restrictions adopted by the Company.

4. Subscription Price

The Subscription Price in respect of any option shall, subject to any adjustments made

pursuant to paragraph 8, be at the discretion of our Directors, provided that it shall not be less than

the highest of:

(a) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet

for trade in one or more board lots of the Shares on the offer date;

(b) the average closing price of the Shares as stated in the Stock Exchange’s daily

quotations sheets for the five Business Days immediately preceding the offer date; and

(c) the nominal value of a Share,

except that for the purpose of calculating the Subscription Price under paragraph 4(b) above

for an option offered within five Business Days of the date on which the Shares are listed on the

Stock Exchange, the price at which the Shares are to be offered for subscription under the

[REDACTED] shall be used as the closing price for any Business Day falling within the period

before the [REDACTED].

5. Exercise of options

(a) An option shall be personal to the Grantee and shall not be transferable or assignable

and no Grantee shall in any way sell, transfer, charge, mortgage, encumber or otherwise

dispose of or create any interest whatsoever in favour of any third party over or in

relation to any option or enter into any agreement so to do. Any breach of the foregoing

by a Grantee shall entitle our Company to cancel any option granted to such Grantee to

the extent not already exercised.

(b) Unless otherwise determined by the Directors and stated in the offer to a Grantee, a

Grantee is not required to hold an option for any minimum period nor achieve any

performance targets before the exercise of an option granted to him.

(c) Subject to, inter alia, paragraph 2(d) and the fulfilment of all terms and conditions set

out in the offer, including the attainment of any performance targets stated therein (if

any), an option shall be exercisable in whole or in part in the circumstances and in the

manner as set out in paragraphs 5(d) and 5(e) by giving notice in writing to our

Company stating that the option is thereby exercised and the number of Shares in

respect of which it is so exercised (which, except where the number of Shares in respect

of which the option remains unexercised is less than one board lot or where the option


– V-24 –


is exercised in full, must be for a board lot for dealings in Shares on the Stock

Exchange or an integral multiple thereof). Each such notice must be accompanied by a

remittance for the full amount of the Subscription Price for Shares in respect of which

the notice is given. Within 21 days (seven (7) days in the case of an exercise pursuant

to paragraph 5(d)(iii)) after receipt of the notice and, where appropriate, receipt of the

certificate of the auditors or the independent financial advisers pursuant to paragraph 8,

our Company shall accordingly allot and issue the relevant number of Shares to the

Grantee (or, in the event of an exercise of option by a personal representative pursuant

to paragraph 5(d)(i), to the estate of the Grantee) fully paid and issue to the Grantee (or

his estate in the event of an exercise by his personal representative as aforesaid) a share

certificate for every board lot of Shares so allotted and issued and a share certificate for

the balance (if any) of the Shares so allotted and issued which do not constitute a board

lot.

(d) Subject as hereinafter provided, an option may (and may only) be exercised by the

Grantee at any time or times during the Option Period provided that:

(i) if the Grantee is an Eligible Employee and in the event of his ceasing to be an

Eligible Employee by reason of his death, ill-health or retirement in accordance

with his contract of employment before exercising the option in full, his personal

representative(s) or, as appropriate, the Grantee may exercise the option (to the

extent not already exercised) in whole or in part in accordance with the provisions

of paragraph 5(c) within a period of 12 months following the date of cessation of

employment which date shall be the last day on which the Grantee was at work

with the Company or the relevant subsidiary or the Invested Entity whether salary

is paid in lieu of notice or not, or such longer period as the Directors may

determine or, if any of the events referred to in paragraph 5(d)(iii) or 5(d)(iv)

occur during such period, exercise the option pursuant to paragraph 5(d)(iii) or

5(d)(iv) respectively;

(ii) if the Grantee is an Eligible Employee and in the event of his ceasing to be an

Eligible Employee for any reason other than his death, ill-health or retirement in

accordance with his contract of employment or the termination of his employment

on one or more of the grounds specified in paragraph 6(a)(iv) before exercising

the option in full, the option (to the extent not already exercised) shall lapse on

the date of cessation or termination and not be exercisable unless the Directors

otherwise determine in which event the Grantee may exercise the option (to the

extent not already exercised) in whole or in part in accordance with the provisions

of paragraph 5(c) within such period as the Directors may determine following the

date of such cessation or termination or, if any of the events referred to in sub-

paragraph 5(d)(iii) or 5(d)(iv) occur during such period, exercise the option

pursuant to paragraph 5(d)(iii) or 5(d)(iv) respectively. The date of cessation or

termination as aforesaid shall be the last day on which the Grantee was actually at

work with the Company or the relevant subsidiary or the Invested Entity whether

salary is paid in lieu of notice or not;

(iii) if a general or partial offer, whether by way of take-over offer, share re-purchase

offer, or scheme of arrangement or otherwise in like manner is made to all the


– V-25 –


holders of the Shares, or all such holders other than the offeror and/or any person

controlled by the offeror and/or any person acting in association or concert with

the offeror, our Company shall use all reasonable endeavours to procure that such

offer is extended to all the Grantees on the same terms, mutatis mutandis, and

assuming that they will become, by the exercise in full of the options granted to

them, shareholders of our Company. If such offer becomes or is declared

unconditional or such scheme of arrangement is formally proposed to shareholders

in our Company, the Grantee shall, notwithstanding any other terms on which his

options were granted, be entitled to exercise the option (to the extent not already

exercised) to its full extent or to the extent specified in the Grantee’s notice to our

Company in accordance with the provisions of paragraph 5(c) at any time

thereafter and up to the close of such offer (or any revised offer) or the record

date for entitlements under scheme of arrangement, as the case may be;

(iv) in the event of a resolution being proposed for the voluntary winding-up of our

Company during the Option Period, the Grantee may, subject to the provisions of

all applicable laws, by notice in writing to our Company at any time not less than

two Business Days before the date on which such resolution is to be considered

and/or passed, exercise his option (to the extent not already exercised) either to its

full extent or to the extent specified in such notice in accordance with the

provisions of paragraph 5(c) and our Company shall allot and issue to the Grantee

the Shares in respect of which such Grantee has exercised his option not less than

one day before the date on which such resolution is to be considered and/or

passed whereupon he shall accordingly be entitled, in respect of the Shares

allotted and issued to him in the aforesaid manner, to participate in the

distribution of the assets of our Company available in liquidation pari passu with

the holders of the Shares in issue on the day prior to the date of such resolution.

Subject thereto, all options then outstanding shall lapse and determine on the

commencement of the winding-up; and

(v) if the Grantee is a company wholly owned by one or more Eligible Participants:

(aa) the provisions of paragraphs 5(d)(i), 5(d)(ii), 6(a)(iv) and 6(a)(v) shall apply

to the Grantee and to the options granted to such Grantee, mutatis mutandis,

as if such options had been granted to the relevant Eligible Participant, and

such options shall accordingly lapse or fall to be exercisable after the

event(s) referred to in paragraphs 5(d)(i), 5(d)(ii), 6(a)(iv) and 6(a)(v) shall

occur with respect to the relevant Eligible Participant; and

(bb) the options granted to the Grantee shall lapse and determine on the date the

Grantee ceases to be wholly owned by the relevant Eligible Participant

provided that the Directors may in their absolute discretion decide that such

options or any part thereof shall not so lapse or determine subject to such

conditions or limitations as they may impose.

(e) Shares to be allotted and issued upon the exercise of an option will be subject to all the

provisions of the Articles for the time being in force and will rank pari passu in all

respects with the then existing fully paid Shares in issue on the date on which the

option is duly exercised or, if that date falls on a day when the register of members of


– V-26 –


our Company is closed, the first day of the re-opening of the register of members (the

‘‘Exercise Date’’) and accordingly will entitle the holders thereof to participate in all

dividends or other distributions paid or made on or after the Exercise Date other than

any dividend or other distribution previously declared or recommended or resolved to

be paid or made if the record date therefor shall be before the Exercise Date. A Share

allotted and issued upon the exercise of an option shall not carry voting rights until the

name of the Grantee has been duly entered on the register of members of our Company

as the holder thereof.

6. Early termination of the Option Period

(a) The Option Period in respect of any option shall automatically terminate and that option

(to the extent not already exercised) shall lapse on the earliest of:

(i) the expiry of the Option Period;

(ii) the expiry of any of the periods referred to in paragraph 5(d);

(iii) the date of commencement of the winding-up of our Company;

(iv) in respect of a Grantee who is an Eligible Employee, the date on which the

Grantee ceases to be an Eligible Employee by reason of a termination of his

employment on the grounds that he has been guilty of persistent or serious

misconduct, or has committed any act of bankruptcy or has become insolvent or

has made any arrangement or composition with his creditors generally, or has

been convicted of any criminal offence (other than an offence which in the

opinion of the Directors does not bring the Grantee or our Group or the Invested

Entity into disrepute);

(v) in respect of a Grantee other than an Eligible Employee, the date on which the

Directors shall at their absolute discretion determine that (aa) (1) such Grantee or

his close associate has committed any breach of any contract entered into between

such Grantee or his close associate on the one part and our Group or any Invested

Entity on the other part; or (2) such Grantee has committed any act of bankruptcy

or has become insolvent or is subject to any winding-up, liquidation or analogous

proceedings or has made any arrangement or composition with his creditors

generally; or (3) such Grantee could no longer make any contribution to the

growth and development of our Group by reason of the cessation of its relations

with our Group or by any other reason whatsoever; and (bb) the option shall lapse

as a result of any event specified in sub-paragraph (1), (2) or (3) above; and

(vi) the date on which the Directors shall exercise our Company’s right to cancel the

option by reason of a breach of paragraph 5(a) by the Grantee in respect of that or

any other option.

(b) A resolution of the Directors to the effect that the employment of a Grantee has been

terminated on one or more of the grounds specified in paragraph 6(a)(iv) or that any

event referred to in paragraph 6(a)(v)(aa) has occurred shall be conclusive and binding

on all persons who may be affected thereby.


– V-27 –


(c) Transfer of employment of a Grantee who is an Eligible Employee from one member of

our Group to another member of our Group shall not be considered a cessation of

employment. It shall not be considered a cessation of employment if a Grantee who is

an Eligible Employee is placed on such leave of absence which is considered by the

directors of the relevant member of our Group not to be a cessation of employment of

the Grantee.

7. Maximum number of Shares available for subscription

(a) The maximum number of Shares which may be allotted and issued upon exercise of all

outstanding options granted and yet to be exercised under the Share Option Scheme and

any other share option schemes adopted by our Group shall not exceed 30% of the

share capital of our Company in issue from time to time. No options may be granted

under the Share Option Scheme or any other share option scheme adopted by our Group

if the grant of such option will result in the limit referred to in this paragraph 7(a) being

exceeded.

(b) The total number of Shares which may be allotted and issued upon exercise of all

options (excluding, for this purpose, options which have lapsed in accordance with the

terms of the Share Option Scheme and any other share option scheme of our Group) to

be granted under the Share Option Scheme and any other share option scheme of our

Group must not in aggregate exceed 10% of the Shares in issue at the time dealings in

the Shares first commence on the Stock Exchange, i.e. [REDACTED] shares (the

‘‘General Scheme Limit’’) provided that:

(i) subject to paragraph 7(a) and without prejudice to paragraph 7(b)(ii), our

Company may seek approval of its shareholders in general meeting to refresh the

General Scheme Limit provided that the total number of Shares which may be

allotted and issued upon exercise of all options to be granted under the Share

Option Scheme and any other share option scheme of the Group must not exceed

10% of the Shares in issue as at the date of approval of the limit and for the

purpose of calculating the limit, options (including those outstanding, cancelled,

lapsed or exercised in accordance with the Share Option Scheme and any other

share option scheme of our Group) previously granted under the Share Option

Scheme and any other share option scheme of our Group will not be counted; and

(ii) subject to paragraph 7(a) and without prejudice to paragraph 7(b)(i), our Company

may seek separate shareholders’ approval in general meeting to grant options

under the Share Option Scheme beyond the General Scheme Limit or, if

applicable, the extended limit referred to in paragraph 7(b)(i) to Eligible

Participants specifically identified by our Company before such approval is

sought.

(c) Subject to paragraph 7(d), the total number of Shares allotted and issued and which

may fall to be allotted and issued upon exercise of the options and the options granted

under any other share option scheme of our Group (including both exercised or

outstanding options) to each Grantee in any 12-month period shall not exceed 1% of the

issued share capital of our Company for the time being. Where any further grant of

options to a Grantee under the Share Option Scheme would result in the Shares allotted


– V-28 –


and issued and to be allotted and issued upon exercise of all options granted and

proposed to be granted to such person (including exercised, cancelled and outstanding

options) under the Share Option Scheme and any other share option schemes of our

Group in the 12-month period up to and including the date of such further grant

representing in aggregate over 1% of the Shares in issue, such further grant must be

separately approved by shareholders of our Company in general meeting with such

Grantee and his close associates (or his associates if such Grantee is a connected person

(as defined in the Listing Rules)) abstaining from voting.

(d) Without prejudice to paragraph 3(b), where any grant of options to a Substantial

Shareholder or an independent non-executive Director or any of their respective

associates, would result in the Shares allotted and issued and to be allotted and issued

upon exercise of all options already granted and to be granted (including options

exercised, cancelled and outstanding) to such person in the 12-month period up to and

including the date of such grant:

(i) representing in aggregate over 0.1% of the Shares in issue; and

(ii) having an aggregate value, based on the closing price of the Shares at the offer

date of each offer, in excess of HK$5 million;

such further grant of options must be approved by our Shareholders in general meeting.

(e) For the purpose of seeking the approval of the shareholders of our Company under

paragraphs 7(b), 7(c) and 7(d), our Company must send a circular to the shareholders

containing the information required under the Listing Rules and where the Listing Rules

shall so require, the vote at the shareholders’ meeting convened to obtain the requisite

approval shall be taken on a poll with those persons required under the Listing Rules

abstaining from voting.

8. Adjustment to the Subscription Price

(a) In the event of any alteration in the capital structure of our Company whilst any option

remains exercisable or this Scheme remains in effect, and such event arises from a

capitalisation of profits or reserves, rights issue, consolidation or sub-division of the

Shares, or reduction of the share capital of our Company, then, in any such case our

Company shall instruct the Auditors or an independent financial adviser to certify in

writing the adjustment, if any, that ought in their opinion fairly and reasonably to be

made either generally or as regards any particular Grantee, to:

(i) the number or nominal amount of Shares to which the Share Option Scheme or

any option(s) relates (insofar as it is/they are unexercised); and/or

(ii) the Subscription Price of any option; and/or

(iii) (unless the relevant Grantee elects to waive such adjustment) the number of

Shares comprised in an option or which remain comprised in an option,


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and an adjustment as so certified by the Auditors or such independent financial adviser

shall be made, provided that:

(i) any such adjustment shall give the Grantee the same proportion of the issued share

capital of our Company for which such Grantee would have been entitled to

subscribe had he exercised all the options held by him immediately prior to such

adjustment;

(ii) no such adjustment shall be made the effect of which would be to enable a Share

to be allotted and issued at less than its nominal value;

(iii) the issue of Shares or other securities of our Group as consideration in a

transaction shall not be regarded as a circumstance requiring any such adjustment;

and

(iv) any such adjustment shall be made in compliance with such rules, codes and

guidance notes of the Stock Exchange from time to time.

In respect of any adjustment referred to in this paragraph 8(a), other than any

adjustment made on a [REDACTED], the Auditors or such independent financial

adviser must confirm to the Directors in writing that the adjustments satisfy the

requirements of the relevant provisions of the Listing Rules.

(b) If there has been any alteration in the capital structure of our Company as referred to in

paragraph 8(a), our Company shall, upon receipt of a notice from a Grantee in

accordance with paragraph 5(c), inform the Grantee of such alteration and shall either

inform the Grantee of the adjustment to be made in accordance with the certificate of

the auditors or the independent financial adviser obtained by our Company for such

purpose or, if no such certificate has yet been obtained, inform the Grantee of such fact

and instruct the Auditors or the independent financial adviser as soon as practicable

thereafter to issue a certificate in that regard in accordance with paragraph 8(a).

(c) In giving any certificate under this paragraph 8, the Auditors or the independent

financial adviser appointed under paragraph 8(a) shall be deemed to be acting as experts

and not as arbitrators and their certificate shall, in the absence of manifest error, be

final, conclusive and binding on our Company and all persons who may be affected

thereby.

9. Cancellation of options

(a) Subject to paragraph 5(a) and Chapter 17 of the Listing Rules, any option granted but

not exercised may not be cancelled except with the prior written consent of the relevant

grantee and the approval of the Directors.

(b) Where our Company cancels any option granted to a Grantee but not exercised and

issues new option(s) to the same Grantee, the issue of such new option(s) may only be

made with available unissued options (excluding, for this purpose, the options so

cancelled) within the General Scheme Limit or the limits approved by our Shareholders

pursuant to paragraph 7(b)(i) or 7(b)(ii).


– V-30 –


10. Share capital

The exercise of any option shall be subject to our Shareholders in general meeting approving

any necessary increase in the authorised share capital of our Company. Subject thereto, the

Directors shall make available sufficient authorised but unissued share capital of our Company to

allot and issue the Shares on the exercise of any option.

11. Disputes

Any dispute arising in connection with the number of Shares the subject of an option, or any

adjustment under paragraph 8(a) shall be referred to the decision of the Auditors who shall act as

experts and not as arbitrators and whose decision shall, in the absence of manifest error, be final,

conclusive and binding on all persons who may be affected thereby.

12. Alteration of the Share Option Scheme

(a) Subject to paragraphs 12(b) and 12(d), the Share Option Scheme may be altered in any

respect by a resolution of the Directors except that:

(i) the provisions of this Scheme as to the definitions of ‘‘Eligible Participants’’,

‘‘Grantee’’, ‘‘Option Period’’ and ‘‘Termination Date’’; and

(ii) the provisions of this Scheme relating to the matters governed by Rule 17.03 of

the Listing Rules;

shall not be altered to the advantage of Grantees or prospective Grantees except with

the prior sanction of a resolution of our Shareholders in general meeting, provided that

no such alteration shall operate to affect adversely the terms of issue of any option

granted or agreed to be granted prior to such alteration except with the consent or

sanction of such majority of the Grantees as would be required of the holders of the

Shares under the articles of association for the time being of our Company for a

variation of the rights attached to the Shares.

(b) Any alterations to the terms and conditions of the Share Option Scheme which are of a

material nature or any change to the terms of options granted shall be approved by our

Shareholders in general meeting except where the alterations take effect automatically

under the existing terms of the Share Option Scheme.

(c) Any change to the authority of the Directors or the administrators of the Share Option

Scheme in relation to any alteration to the terms of the Share Option Scheme must be

approved by our Shareholders in general meeting.

(d) The amended terms of the Share Option Scheme and/or the options must continue to

comply with the relevant rules, codes and guidance notes of the Stock Exchange from

time to time.

13. Termination

Our Company by resolution in general meeting may at any time terminate the operation of

the Share Option Scheme and in such event no further options will be offered but in all other

respects the provisions of the Share Option Scheme shall remain in force to the extent necessary to

give effect to the exercise of any options (to the extent not already exercised) granted prior thereto


– V-31 –


or otherwise as may be required in accordance with the provisions of the Share Option Scheme and

options (to the extent not already exercised) granted prior to such termination shall continue to be

valid and exercisable in accordance with the Share Option Scheme.

Application has been made to the [REDACTED] of the [REDACTED] of, and permission to

[REDACTED], the Shares which may be allotted and issued upon the exercise of the options

granted under the Share Option Scheme, being [REDACTED] Shares in total. As at the date of this

document, no option had been granted by our Company under the Share Option Scheme.

H. OTHER INFORMATION

1. Litigation

As at the Latest Practicable Date, save as disclosed in this document, no member of our

Group was engaged in any litigation, claim or arbitration of material importance and no litigation,

claim or arbitration of material importance was known to our Directors to be pending or threatened

against our Group, that would have a material adverse effect on its business, financial condition or

results of operations.

2. Sole Sponsor

The Sole Sponsor satisfies the independence criteria applicable to sponsors set out in Rule

3A.07 of the Listing Rules. The Sole Sponsor’s fees payable by us in respect of the Sole Sponsor’s

services as sponsor for the [REDACTED] is US$1,000,000.

The Sole Sponsor has made an application on behalf of our Company to the [REDACTED]

for the [REDACTED] of, and permission to [REDACTED], the Shares in issue and to be issued

pursuant to the [REDACTED] (including any Shares which may be issued pursuant to the exercise

of the [REDACTED] and any Shares to be issued upon the exercise of any options which may be

granted under the Share Option Scheme). All necessary arrangements have been made to enable

such Shares to be admitted into CCASS.

3. No Material Adverse Change

Our Directors confirm that there has been no material adverse change in the financial or

trading position or prospects of our Group since 30 September 2021 (being the date to which the

latest audited consolidated financial statements of our Group were prepared).

4. Tax and other indemnities

(a) Hong Kong

(i) Tax on Dividend

No tax is payable in Hong Kong in respect of dividend paid by us.

(ii) Profits Tax

No tax is imposed in Hong Kong in respect of capital gains from the sales of

property such as the Shares. Trading gains from the sales of property by persons

carrying on a trade, profession or business in Hong Kong where such gains are derived

from or arise in Hong Kong from such trade, profession or business will be chargeable

to Hong Kong profit tax, which is currently imposed at the rate of 16.5% on


– V-32 –


corporations and at a rate of 15.0% on unincorporated businesses. Gains from sales of

the Shares effected on the Stock Exchange will be considered to be derived from or

arise in Hong Kong. Liability for Hong Kong profits tax would thus arise in respect of

trading gains from sales of the Shares realised by persons carrying on a business of

trading or dealing in securities in Hong Kong.

(iii) Stamp Duty

Hong Kong stamp duty will be payable by the purchaser on every purchase and by

the seller on every sales of the Shares. The duty is charged at the current rate of 0.2%

of the consideration or, if higher, the fair value of the Shares being sold or transferred

(the buyer and seller each paying half of such stamp duty). In addition, a fixed duty of

HK$5 is currently payable on any instrument of transfer of shares.

(iv) Estate Duty

There is no estate duty in Hong Kong.

(b) The Cayman Islands

No stamp duty is payable in the Cayman Islands on transfer of shares of Cayman

Islands exempted companies except for those which hold interests in land in the Cayman

Islands.

(c) Deed of Indemnity

Our Controlling Shareholders (collectively the ‘‘Indemnifiers’’) have entered into Deed

of Indemnity with and in favour of our Company (for ourselves and for each of our

subsidiaries) being the material contact referred to in the paragraph headed ‘‘E. Further

Information about Our Business — 1. Summary of material contracts’’ in this Appendix.

Under the Deed of Indemnity, the indemnifiers will jointly and severally indemnify

each member of our Group against:

(i) all damages, losses, claims, penalties, charges, fees, costs, interests, expenses and

liabilities which our Group may suffer, incur, or be imposed by any regulatory

authorities or courts in Hong Kong or any applicable jurisdiction as a result of any

violation or non-compliance by any member of our Group with any applicable

laws, rules or regulations on all matters subsisting prior to the date on which the

conditions set out under the section headed ‘‘Structure of the [REDACTED] —

Conditions of the [REDACTED]’’ in this document being fulfilled (the ‘‘EffectiveDate’’);

(ii) taxation, together with all reasonable costs, expenses or other liabilities which any

member of our Group may incur in connection with (1) the investigation,

assessment, contesting or settlement of any taxation claim under the Deed of

Indemnity; (2) any legal proceeding in relation to taxation claim in which any

member of our Group claims under or in respect of the Deed of Indemnity and in

which judgment is given for any member of our Group; or (3) the enforcement of

any such settlement or judgment falling on any member of our Group resulting


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from or by reference to any income, profits or gains, transactions, events, acts,

omissions, matters or things earned, accrued or received, entered into or occurring

on or before the Effective Date;

(iii) any and all taxation including estate duty falling on any member of our Group

and/or its associated companies whether in Hong Kong, or in any other part of the

world resulting from or by reference to any income, profits or gains earned

accrued or received on or before the Effective Date whether alone or in

conjunction with other circumstances whether or not such taxation is chargeable

against or attributable to any other person;

(iv) all damages, losses, claims, penalties, charges, fees, costs, interests, expenses and

liabilities which our Group may sustain, suffer and incur as a result of directly or

indirectly or in connection with any litigation, proceeding, claim, investigation,

inquiry, enforcement proceeding or process by any governmental, administrative

or regulatory body which (1) any member of our Group, their respective directors

and/or representatives or any of them is/are involved; and (2) arises due to some

act or omission of, or transaction voluntarily effected by, any member of our

Group or any of them (whether alone or in conjunction with some other act,

omission or transaction) on or before the Effective Date; and

(v) all damages, losses, claims, penalties, charges, fees, costs, interests, expenses and

liabilities which our Group may sustain, suffer and incur arising from or in

connection with the title defects of the properties owned by any member of our

Group or any leases entered into by any member of our Group (either due to non-

registration of the lease agreements or any other reasons) in any jurisdiction which

were occurred on or before the Effective Date.

The Indemnifiers will, however, not be liable under the Deed of Indemnity to the extent

that:

(i) allowance, provision or reserve has been made for taxation in the audited accounts

of our Group for each of the three years ended 31 March 2021 and the six months

ended 30 September 2021;

(ii) a taxation claim arises as a result of the imposition of taxation as a consequence

of any introduction of new legislation or any retrospective change in law or the

interpretation or practice by the relevant tax authority coming into force after the

Effective Date or taxation claim arises or is increased by an increase in rates of

taxation after the Effective Date with retrospective effect;

(iii) any member of our Group is liable as a result of any event occurring or income,

profits earned, accrued or received or transactions entered into in the ordinary

course of business on or before the Effective Date;

(iv) the taxation or liability would not have arisen but for any act or omission by any

member of our Group (whether alone or in conjunction with some other act,

omission or transaction, whenever occurring) voluntarily effected without the

consent of the Indemnifiers and otherwise than in the ordinary course of business

on or before the Effective Date;


– V-34 –


(v) any allowance or provision or reserve made for taxation in the audited accounts ofour Group for each of the three years ended 31 March 2021 and the six monthsended 30 September 2021, which is finally established to be an over-allowance orover-provision or an excessive reserve provided that the amount of any suchallowance or provision or reserve applied to reduce the Indemnifiers’ liability inrespect of taxation shall not be available in respect of any such liability arisingthereafter;

(vi) such claim or taxation claim arises or is incurred as a consequence of a change inany accounting policy or practice adopted by any other members of our Groupafter the Effective Date; or

(vii) any member of our Group shall have admitted liability in respect of thecircumstances giving rise to the claim for taxation after the Effective Date.

(d) Consultation with professional advisors

Potential investors in the [REDACTED] are recommended to consult their professionaladvisors if they are doubt as to the tax implications of subscribing for, purchasing, holding ordisposing of or [REDACTED] the Shares. None of our Company, the Sole Sponsor, the[REDACTED], any of our/their respective directors, or any other person or party involved inthe [REDACTED] accepts responsibility for any tax effects on, or liabilities of, any personresulting from the subscription for, purchase, holding or disposal of, or [REDACTED], theShares.

5. Miscellaneous

(a) Save as disclosed in this document, within the two years immediately preceding thedate of this document:

(i) no share or loan capital of our Company or any of its subsidiaries has been issued,agreed to be issued or is proposed or intended to be issued fully or partly paideither for cash or for a consideration other than cash;

(ii) no share or loan capital of our Company or any of our subsidiaries is under optionor is agreed conditionally or unconditionally to be put under option;

(iii) no commissions, discounts, brokerages or other special terms have been granted inconnection with the issue or sales of any shares or loan capital of any member ofour Group;

(iv) no commission has been paid or payable (except to sub-[REDACTED]) forsubscribing or agreeing to subscribe, procuring or agreeing to procuresubscriptions, for any shares or debenture of our Company or any of itssubsidiaries; and

(v) no founders, management or deferred shares or any debentures of our Company orany of its subsidiaries have been issued or agreed to be issued;

(b) no equity or debt securities of our Company is listed or dealt with in any other stockexchange nor is any listing or permission to deal being or proposed to be sought;

(c) our Company has no outstanding convertible debt securities or debentures;


– V-35 –


(d) there has not been any interruption in the business of our Group which may have or hashad a significant effect on the financial position of our Group in the 12 monthspreceding the date of this document;

(e) our Directors have been advised that the use by the Company of its English name and/or Chinese name in abbreviated form for trading purposes on the Stock Exchange willnot contravene the provisions of the Cayman Islands law;

(f) there is no arrangement in existence under which future dividends are waived or agreedto be waived;

(g) no company within our Group is presently listed on any stock exchange or traded onany trading system;

(h) subject to the provisions of the Cayman Companies Act, our Cayman Islands principalshare register will be maintained by our [REDACTED] in the Cayman Islands and our[REDACTED] will be maintained by [REDACTED]. Unless our Directors otherwiseagree, all transfer and other documents of title of Shares must be lodged for registrationwith and registered by our Company’s [REDACTED] and may not be lodged in theCayman Islands.

6. Qualifications of experts

The following are the qualifications of experts who have opined or advised on informationcontained in this document:

Name Qualification

China International CapitalCorporation Hong KongSecurities Limited

A corporation licensed under the SFO to carry out Type 1 (dealingin securities), Type 2 (dealing in futures contracts), Type 4 (advisingon securities), Type 5 (advising on futures contracts) and Type 6(advising on corporate finance) regulated activities

Conyers Dill & Pearman Company’s Cayman Islands attorneys-at-law

Hectar Pun S.C. Barrister-at-law and senior counsel of Hong Kong

PricewaterhouseCoopers Certified Public Accountants under the Professional AccountantsOrdinance (Cap. 50) and Registered Public Interest Entity Auditorunder the Financial Reporting Council Ordinance (Cap. 588)

Frost & Sullivan Industry consultant

Knight Frank Petty Limited Property valuer

7. Consents of experts

Each of the experts named in the section headed ‘‘— H. Other Information — 6.Qualifications of Experts’’ above has given and has not withdrawn its written consent to the issueof this document, with the inclusion of its letters and/or reports and/or opinions and/or summarythereof (as the case may be) and/or references to its/his name included herein in the form andcontext in which they respectively appear.


– V-36 –


8. Promoters

Our Company has no promoter for purpose of the Listing Rules. Save as disclosed in this

document, within the two years immediately preceding the date of this document, no cash,

securities or other benefit has been paid, allotted or given, nor are any proposed to be paid,

allotted or given to any promoters in connection with the [REDACTED] and the related

transactions described in this document.

9. Preliminary expenses

The preliminary expenses relating to the incorporation of our Company are approximately

US$5,615 and are payable by our Company.

10. Binding effect

This document shall have the effect, if an application is made in pursuance hereof, of

rendering all persons concerned bound by all of the provisions (other than the penal provisions) of

sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance so

far as applicable.

11. Bilingual document

The English language and Chinese language versions of this document are being published

separately in reliance upon the exemption provided in section 4 of the Companies (Exemption of

Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws

of Hong Kong).


– V-37 –


1. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG

The documents attached to a copy of this document delivered to the Registrar of Companies in

Hong Kong for registration were:

(a) a copy of the [REDACTED];

(b) a copy of each of the material contracts referred to in the section headed ‘‘Statutory and

General Information — E. Further Information about Our Business — 1. Summary of

Material Contracts’’ in Appendix V to this document; and

(c) the written consents referred to in the section headed ‘‘ Statutory and General Information —

H. Other Information — 7. Consents of Experts’’ in Appendix V to this document.

2. DOCUMENTS AVAILABLE FOR INSPECTION IN HONG KONG

Copies of the following documents will be available for inspection at the office of Messrs. K. B.

Chau & Co. at Unit B, 31/F, United Centre, 95 Queensway, Admiralty, Hong Kong during normal

business hours from 9:30 a.m. to 5:00 p.m. up to and including the date which is 14 days from the date

of this document:

(a) the Memorandum of Association and the Articles of Association;

(b) the accountant’s report of our Group prepared by PricewaterhouseCoopers, the text of which

is set out in Appendix I to this document;

(c) the audited consolidated financial statements of our Group for each of the three years ended

31 March 2021 and the six months ended 30 September 2021;

(d) the report on the unaudited pro forma financial information of our Group prepared by

PricewaterhouseCoopers, the text of which is set out in Appendix II to this document;

(e) the property valuation report in respect of our Group’s property interests as at 30 September

2021 prepared by Knight Frank Petty Limited, the text of which is set out in Appendix III to

this document;

(f) the letter of advice prepared by Conyers Dill & Pearman summarising certain aspects of the

Cayman Islands company law referred to in Appendix IV to this document;

(g) the Cayman Companies Act;

(h) the industry report issued by Frost & Sullivan Limited, the text of which is summarised in

the section headed ‘‘Industry Overview’’;

(i) the written consents referred to in the section headed ‘‘Statutory and General Information —

H. Other Information — 7. Consents of Experts’’ in Appendix V to this document;

(j) the material contracts referred to in the section headed ‘‘Statutory and General Information —

E. Further Information about Our Business — 1. Summary of Material Contracts’’ in

Appendix V to this document;

APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OFCOMPANIES AND AVAILABLE FOR INSPECTION

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(k) the service contracts and letters of appointment referred to in the section headed ‘‘Statutory

and General Information — F. Further Information about Directors and Substantial

Shareholders — 2. Directors’ Service Contracts and Letters of Appointment’’ in Appendix V

to this document;

(l) the rules of the Share Option Scheme; and

(m) this document.

APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OFCOMPANIES AND AVAILABLE FOR INSPECTION

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HONG KONG MEDICAL CONSULTANTS HOLDINGS LIMITED

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Transcript of HONG KONG MEDICAL CONSULTANTS HOLDINGS LIMITED