Incorporated in the Cayman Islands with limited liability
HKEX Stock code: 6822
December 2014
Sole Sponsor
DisclaimerDisclaimer
This document has been prepared by King’s Flair International (Holdings) Limited (the “Company”) solely for use in the presentation(s) toinvestors held in connection with the proposed initial public offering on the Main Board of The Stock Exchange of Hong Kong Limited by theCompany.
The information contained in this document has not been independently verified. No representation or warranty expressly or impliedly is madeas to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein.The information contained in this document is subject to change without notice and will not be updated to reflect material developmentswhich may occur after the date of the presentation. None of the Company and Baron Global Financial Services Limited (the “Sole Sponsor andBookrunner”), nor any of their respective affiliates, employees, advisers or representatives shall have any liability whatsoever (in negligence orotherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.
This document contains forward-looking statements. These forward-looking statements express the Company’s current views, projections,beliefs and expectations with respect to future events as of the respective dates indicated herein, involve predictions and are not a guaranteeof future performance. The Company gives no assurance that those views, projections, beliefs and expectations will prove to be correct and theanticipated results will be achieved. These forward-looking statements are based on a number of assumptions about the Company’s operations
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anticipated results will be achieved. These forward-looking statements are based on a number of assumptions about the Company’s operationsand factors beyond the Company’s control and are subject to significant risks and uncertainties, and, accordingly, actual events or results maydiffer materially from these forward-looking statements and the forward-looking events discussed in this document might not occur.Prospective investors are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation toupdate or revise these forward-looking statements for events, information or circumstances that occur subsequent to such dates. Moreover, anystatements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.
By accepting this document, you are agreeing to maintain absolute confidentiality regarding the information contained in this document. Thesematerials are given to you solely for your own use and information and no part of this document may be copied or reproduced, or redistributedor passed on, directly or indirectly, to any other person (whether within or outside your organization/firm) in any manner or published, inwhole or in part, for any purpose. Unauthorized copying or reproduction, or redistribution of this document or any information contained hereinto any person, could result in material delay to, or otherwise prejudice the success of, the Global Offering of the Company. No part of thisdocument may be distributed, reproduced, taken or transmitted into the United States, Canada, Japan or the People’s Republic of China. Youare aware that monetary damages shall not be a sufficient remedy for any breach of the confidential obligation undertaken by you, or by any ofyour directors, officers, employees, legal counsel, accountants or tax advisers, agents, consultants and other representatives. You also agreethat, in addition to all other remedies, the Company shall be entitled to specific performance and injunctive relief, or other equitable relief, asa remedy for any such breach.
This document does not constitute an offer or invitation to subscribe for any shares and, save as expressly mentioned herein, no part of it shallform the basis of or be relied upon in connection with any contract or commitment whatsoever.
Roadshow TeamRoadshow Team
Mr. Wong Siu Wah
Chairman and Executive Director
Ms. Wong Fook Chi
Executive Director
22
Mr. Dennis Wong
Executive Director
Mr. Ronnie Po
Financial Controller &Company Secretary
AgendaAgenda
Company Overview22
Industry Overview33
Issue Statistics and Timetable 11
33
Investment Highlights44
Financial Highlights55
Development Strategies66
Open Forum77
Issue Statistics and TimetableIssue Statistics and Timetable
IssuerKing’s Flair International (Holdings) Limited (“King’s Flair” or the “Company”)
Stock code: 6822.HK
Share Offers
175,000,000 Offer Shares , 25% of the enlarged issued share capital (before Over-allotment Option)
— Placing: 157,500,000 Shares, or 90% of the share offer(subject to reallocation and the Over-allotment Option)
— Public Offer: 17,500,000 Shares, 10% (subject to reallocation)
Over-allotment Option 26,250,000 Shares (representing 15% of the initial no. of Offer Shares)
Board Lot 4,000
Price Range HK$1.08 to HK$1.48 per Offer Share
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Price Range HK$1.08 to HK$1.48 per Offer Share
Offering Size HK$189 million - HK$259 million
Listing Exchange Main Board of The Stock Exchange of Hong Kong Limited
Expected Timetable
Roadshow and bookbuilding: 24 Dec 2014 – 7 Jan 2015
Hong Kong Public Offer: 31 Dec 2014 – 7 Jan 2015 (12 noon, HKT)
Pricing: 8 Jan 2015
Allotment results: 15 Jan 2015
Listing: 16 Jan 2015
Sole Sponsor
Joint Bookrunners and Joint Lead Manager
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Established a distribution network covering over 80 point-of-sales in major cities in the PRC(As at 28 October 2014)
Commenced retail business of kitchenware products in the PRC
Established product design and development team
Established business relationship with Ignite USA
Became a strategic partner of Lifetime with the formation of a joint venture through
Major Milestones Major Milestones
2014
2003
1999
2011
2007
66
Became a strategic partner of Lifetime with the formation of a joint venture throughWorld Alliance
Chairman Wong began kitchenware business
Established business relationship with William Levene Ltd.(acquired by Diethelm Keller Brands AG)
Established business relationship with Lifetime, a North American based corporation,and Kai Corporation, a Japan based corporation
Founded by Chairman Wong
1999
1984
1989
1990
1992
King’s Flair at a Glance King’s Flair at a Glance
Strategic relationshipsStrategic relationshipswith internationalwith international
brandownersbrandowners
Well established long-standing relationship of 10 to over 20 years with international kitchenware brandowner customers who possess recognised brand names
Strong productStrong product designdesignand engineeringand engineering
capabilities capabilities
Unique business model that competes on superior product design,development and engineering capabilities
A diverse range of modern, stylish products that appeal to high-end customers
Established reputation for quality, consistency and reliability
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EstablishedEstablishedreputationreputation
Established reputation for quality, consistency and reliability
Strict compliance to standards in relation to food contact substance
Rapidly expandingRapidly expandingdistribution network distribution network
in Chinain China
A distribution network via retailers for retailing authorised kitchenware products in over 80 sales points in major cities in China (as at 28 October 2014)
Online sales channels via major e-Commerce platforms
VisionaryVisionarymanagementmanagement teamteam
Experienced and professional management team with an entrepreneurial spirit and a proven track record
A Diverse Range of Products A Diverse Range of Products
Drinkwares Tools and gadgets
88
Storage and accessories Food preparation products Bakewares and accessories
Our Business Model Our Business Model
Marketing Product design OrderingProduct
Massproduction
Design briefingDesign
developmentDesign
evaluationCommercialisation
Multiple evaluations and alterations throughout the process
99
Marketingand
trend capturing
Product designand
development
Orderingand
sourcing
Productengineering
productionby Production
Factories
Sales
Outsourced to manufacturers
Tests to ensure product quality and safety, include
1. Testing during product development
2. Testing of raw materials
3. Production line sample testing
Product quality further ensured by independent professional quality assurance firm
Strong control of intellectual property
10101010
The Global Kitchenware Market Overview The Global Kitchenware Market Overview
A highly fragmented market with a diverse range of brands and products
New sales in the global kitchenware market from 2009–2018: US$20.3 billion
China is expected to contributed 53.4% of these new sales
The Global Kitchenware Market
100,000
11,677 11,812 80,767
83,768 85,041 86,642 88,545 90,702 93,031
(US$ million)
1111
0
20,000
40,000
60,000
80,000
2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E
27,154 28,951 30,170 31,569 33,366 33,978 34,699 35,452 36,247 37,062
6,622 7,617 8,884 10,063
11,318 12,374 13,499 14,707 16,020 17,450 28,681
28,486 28,348
28,142 27,937 27,428 27,058 26,856 26,758
26,707 10,288 10,523
10,974 10,993
11,147 11,261 11,386 11,531 11,677 11,812
72,74475,577 78,375
80,76783,768
US China Western Europe Others
Source: Euromonitor Report
Global Market Trends Global Market Trends
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As the urbanization rate of a region increases, the expenditure per household on kitchenware products also increases
Multigenerational households are becoming less common in urban areas
More single and two person households lead to increased demand for kichenware products
Growth of disposable income is correlated with the growth of the kitchenware market
Kitchenware market growth forecast(2014-2018 CAGR)
— US: +1.2%
— W. Europe: –0.9%
— China: +9.0%
Individuals living in urban areas increasingly view kitchenware as lifestyle accessories
Celebrity endorsed products fuel growth
Increasingly influenced by the younger generation: consumers are often willing o buya new product simply because its unique style
China Market — the Growth Driver China Market — the Growth Driver
China’s share in the global market increased from 9.1% in 2009 to 13.5% in 2013, and is expected to grow to 18.8% by 2018
� Grow at a CAGR of 9.0% from 2014-2018 on the back of 10.7% household disposable income growth
China market value forecasted to increase by US$1,056 million from 2013-2014, accounting for 85.3% of all new global growth that year
The China Kitchenware Market
20,000
(US$ million)
1313
0
5,000
10,000
15,000
20,000
2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E
6,622 7,617
8,884 10,063
11,318 12,374
13,499 14,707
16,020
17,450
Source: Euromonitor Report
14141414
Investment HighlightsInvestment Highlights
Strong product design and engineering capabilities22
Reputation for quality, consistency and reliability33
Long-standing strategic relationships with international kitchenware brandowners
11
1515
Reputation for quality, consistency and reliability33
Strict compliance with standards for food contact substances44
Fast-growing retail business in China55
Experienced and professional management team66
1. Long-standing Strategic Relationships with International Kitchenware Brandowners
1. Long-standing Strategic Relationships with International Kitchenware Brandowners
Well-known customers base
Established long-standing relationships with several international kitchenware brandowner customers
Business relationships with top
Comprehensive service
Product design and development
Production engineering solutions
Stringent quality control and production control
Stable delivery of high quality
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Business relationships with top five largest customers ranged from 10 to over 20 years
Stable delivery of high quality products, and
Timely completion of customers’ orders
2. Strong Product Design and EngineeringCapabilities
2. Strong Product Design and EngineeringCapabilities
In order to keep abreast of the trends in kitchenware products, we analyse and monitor market trends, new materials, colour trends and design updates on products
Design briefingDesign
developmentDesign
evaluationCommercialisation
• Decision of basic design requirements
• Ideas and conceptsgeneration
• 2-dimentional
• Prototype creation
• Mechanical designand testing, and
• Packaging design
• Samples tocustomers
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Multiple evaluations and alterations throughout the process
• 2-dimentionalappearance design
• 3-dimentional design
• Mechanical design
and testing, andengineering evaluation
• Marketing evaluation
customers
Raw material sourcing
3. Reputation for Quality, Consistency andReliability
3. Reputation for Quality, Consistency andReliability
Stringent quality control procedures have been established throughout the entire production process so as to ensure that the kitchenware products are manufactured with consistent, reliable and high quality standard
Quality control and production control
Selecting qualifiedproduction factories
• Selecting criteria:
— factory scale
— factory facilities and
• Imported from overseas markets such as the U.S., South Korea, Germany, Australia, Taiwan and Japan
• Under supervision by quality assurance team together with a quality assurance firm
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— factory facilities and equipment quality
— standard management skills
— financial stability,
— production capacity and location
South Korea, Germany, Australia, Taiwan and Japan
• Procured from over 15 suppliers
• Established business relations of over 5 to 10 years
a quality assurance firm
• Provide training to the quality assurance personnel on the quality assurance guidelines, methods and procedures
4. Strict Compliance with Standards forFood Contact Substances
4. Strict Compliance with Standards forFood Contact Substances
We assist the Production Factories to set up in-house component and product testing facilities to perform product testings during the production process
Prior to confirming orders placed by customers, our sales and marketing team communicates with the customer to understand and define their needs, expectations and specifications for products and to adopt or tailor-make a specific quality assurance plan (“QAP”)
Testing during
Quality Assurance Plan (“QAP”)
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Testing duringproduct
development
• Carry out tests on product samples before trial production
Raw material testing
• Production Factories or raw material suppliers to provide a material safety data sheet for the raw material used
Production line sample testing
• Randomly inspect and perform sample testing in the production lines
Final product testing
• Inspect and test the final products for defects before shipping
• Appoint international third party laboratories to perform food safety tests
Extra testing
• Conduct extra testing in addition to that set out in the QAP
Operated a flagship store in Beijing
Agreements with over 20 retailers for retailing our kitchenware products in over 80 sales points in Beijing, Shanghai, Tianjin, Xi’an and other PRC cities
Online sales channels : www.taobao.com, www.amazon.cn, www.jd.com and www.tmall.com and was awarded by Amazon China as one of the top five partners within the kitchenware categories
5. Fast-growing retail business in China5. Fast-growing retail business in China
2020
as one of the top five partners within the kitchenware categories
A retail website (www.gourmetkitchen.hk) as an online sales platform to offer our kitchenware products in Hong Kong
Most of our Executive Directors and senior management have more than 15 years
of experience in the kitchenware industry
6. Experienced and ProfessionalManagement Team
6. Experienced and ProfessionalManagement Team
� Founder of the Group
� Approx. 30 years of management and operation experience
� Primarily responsible for the overall corporate strategic planning and corporate management of the Group
Mr. Wong Siu WahChairman, Executive Director and Chief Executive Officer
Ms. Wong Fook ChiExecutive Director
Mr. Wong Ying Wai, DennisExecutive Director
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Executive Director
� Over 8 years of experience in the managementand operation of kitchenware business
� Oversees the business operation and corporate strategy implementations of the Group
Executive Director
� Over 13 years of experience in the kitchenware industry
� Primarily responsible for the business operation and corporate management of the Group
Mr. Wong Chi ManSupply Chain and Logistic Manager
� Approx. 17 years experience in quality control and production coordination
� Primarily responsible for the overall supplier management and oversees the supplies network and production capacity
Mr. Chow Chi Wai, KevinRegional Manager, Sales and Marketing
� Approx. 10 years experience in marketing andmerchandising field
� Primarily responsible for the businessdevelopment and customer relationships of the worldwide (excluding China) business of our Group
Mr. Wong Lok HeyR&D Development Manager
� Approximately 6 years of kitchenware design and development experience
� Primarily responsible for product design andproduct development of the Group
Ms. Lam Hau FungRegional Manager, Sales and Marketing
� Over 9 years experience in marketing andmerchandising field
� Primarily responsible for the business and customer relationships of the worldwide (excluding China) business of our Group
Mr. Po Tien Chu, RonnieFinancial Controller & Company Secretary
� Over 10 years of experience in auditing and accounting field
� Responsible for financial and accountingmanagement, taxation and compliance of the Group
Mr. Chan Chi Man, ArthurQuality Assurance Manager
� Over 5 years experience in marketing and merchandising field
� Primarily responsible for the management of the quality control of the Group
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Financial StatementFinancial Statement
(HKD ’000)
For the year ended 31 Dec For the six months ended 30 Jun
2011 2012 20132013
(unaudited)2014
Revenue 968,505 1,077,351 1,236,284 505,466 624,715
Cost of Sales (844,675) (917,307) (1,048,295) (428,842) (520,228)
2323
Gross Profit 123,830 160,044 187,989 76,624 104,487
Distribution Expenses (14,758) (18,418) (23,403) (10,903) (11,001)
Administrative Expenses (47,321) (62,402) (84,900) (39,205) (48,249)
Operating Profit 66,289 84,545 90,651 35,211 50,450
Profit before Income Tax 65,308 83,725 96,483 34,996 50,278
Profit for the Year/Period 45,448 68,208 78,333 27,087 41,869
Growing Revenue and Net ProfitGrowing Revenue and Net Profit
Total Revenue
1,000,000
1,200,000
1,400,000
968,505
1,077,351
1,236,284
(HKD ’000)
Profit for the Year / Period
80,000
100,000
68,208
78,333
(HKD ’000)
2424
0
200,000
400,000
600,000
800,000
2011 2012 2013 2013 2014
505,466
624,715
Year ended 31 Dec 6 months ended 30 Jun
0
20,000
40,000
60,000
2011 2012 2013 2013 2014
45,448
27,087
41,869
Year ended 31 Dec 6 months ended 30 Jun
Effective Cost Control ImprovesGross Profit MarginsEffective Cost Control ImprovesGross Profit Margins
Gross Profit
150,000
200,000
123,830
160,044
187,989
Gross Profit Margin
14.9%
15.2%
15.2%
16.7%
16%
18%(HKD ’000)
2525
0
50,000
100,000
2011 2012 2013 2013 2014
123,830
76,624
104,487
Year ended 31 Dec 6 months ended 30 Jun
12.8%
15.2%
10%
12%
14%
2011 2012 2013 2013 2014
Year ended 31 Dec 6 months ended 30 Jun
For the financial year ended 31 Dec For the six months ended
30 Jun 20142011 2012 2013
Trade and Bills Receivables Turnover Days
45.7 39.7 47.3 54.9
Trade and Bills Payable Turnover Days
27.8 33.2 41.6 40.9
Return on Equity 29.7% 37.1% 39.6% 45.2%
Key Financial RatiosKey Financial Ratios
2626
Return on Equity 29.7% 37.1% 39.6% 45.2%
Return on Assets 12.5% 18.3% 17.1% 17.4%
As at 31 DecAs at
30 Jun 20142011 2012 2013
Gearing Ratio 28% 23% 18% 16%
Net-debt-to-equity Ratio N/A N/A N/A N/A
Current Ratio 1.58x 1.82x 1.66x 1.55x
Quick Ratio 1.57x 1.77x 1.62x 1.51x
Use of ProceedsUse of Proceeds
Purchase and renovate office premises
Enhance product design, development and engineering capabilities
Establish flagship stores,with one flagship store in Shanghai by end of 2015,and expand retail sales
45%22%
photo
2727
Shanghai by end of 2015,and expand retail sales network and e-commerce business in the PRC
15%
10%
Working capital and general corporate purposes
Broaden customer base, expand penetration in existing markets and penetrate into new markets
3%
Enhance information technology infrastructure
5%
photo
28282828
Development StrategiesDevelopment Strategies
Broaden existingcustomer base and
expand into new markets
Enhance design,development and
engineering capabilities
2929
Expand retail networksand e-commerce in China
Selectively pursueacquisition and strategic
alliance opportunities
Broaden Existing Customer Base and Expand into New MarketsBroaden Existing Customer Base and Expand into New Markets
Leverage on our market presence and quality customer services to attract new international kitchenware brandowners in order to diversify our revenue sources
Further collaborate with existing customers to deepen penetration into existing markets
� Collaborate with existing customers to develop new series of kitchenware products in order to expand existing target markets
Enter into new markets(excluding Sanctioned Countries)
3030
(excluding Sanctioned Countries)with good potential such asEastern Europe, Africa andSouth America, by workingwith local importers andtrade agents when appropriate
3030
Eastern Europe
Hong Kong
South America
Africa
Enhance Design, Development andEngineering CapabilitiesEnhance Design, Development andEngineering Capabilities
Continue to collaborate with major customers in product design and developmentprocess and further collaborate with existing customers
Enhance the variety of the designs and also to re-designkitchenware products that suit the preference and cookinghabits of our target markets, such as the PRC and South Africa
Continue improving production engineering quality by providing advancedengineering software and hardware and providing training, exposure andexperience to production engineers
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experience to production engineers
Design, develop and build toolings for approximately 10 categoriesof products such as storage, tools and gadgets andfood preparation by 2017 and apply for mechanicalpatents and design patents of such productscovering U.S., China, Europe and Japan.
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Expand Retail Networks and e-commerce in ChinaExpand Retail Networks and e-commerce in China
Introduce various brands and selection of kitchenware products to the Chinese consumers in our flagship store in up-scaled shopping malls
Enhance our shop image and publicity by adopting marketing strategies
Establish one flagship store in Shanghai by end of 2015 to expose the brands and kitchenware products we supply in the Yangtze River region, and to establishmore flagship stores in the PRC after 2015
Expand our retail networks as to accelerate our PRC retail business and have our
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Expand our retail networks as to accelerate our PRC retail business and have our products sold in 120 and 250 sales points of our retailers by the end of 2014 and 2015 respectively
Enhance our e-commerce operations and sales by offering our productson more online shopping websites and building our own online shopping platform
Selectively Pursue Acquisition and Strategic Alliance OpportunitiesSelectively Pursue Acquisition and Strategic Alliance Opportunities
Consider opportunities to acquire distribution platforms that complement our existing business and enter into strategic alliances with international brandowners
Criteria of selection of potential targets:
� Reputable management
� Solid track record
33333333
Enhance our competitiveness and further solidifyour market position
� Solid track record
� Good operating platform
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