REG - Gamfook Jewellery - Admission on NEX and First Day of Dealings

KKR & CoAnnouncement

24/12/2018 08:05

RNS Number : 1668L
Gamfook Jewellery PLC
24 December 2018
 


24 December 2018
 
Gamfook Jewellery Plc
 
(The "Company" or "Gamfook")
 
Admission on NEX Exchange Growth Market and First Day of Dealings
 
Gamfook, a custom jewellery designer and retailer in China offering a range of personalised goods and gifts under the brand name of "Gamfook" or "金太福", is pleased to announce that admission of its shares to trading on NEX Exchange Growth Market ("Admission") will take place and dealings will commence at 8:00 a.m. today under the ticker GAMF and the ISIN JE00BG20S946.
 
Mr. Jindian Lin, Executive Chairman, commented:
 
"Gamfook's mission is to become China's leading bespoke jewellery service provider for retail and corporate customers. We are confident that NEX will be the right platform to support us in rapidly scaling the business. Admission to the exchange will bolster our brand and provide the capital necessary to pursue further, sustainable growth."
 
Company Information
 
The Company is a Jersey registered company incorporated on 22 September 2017 and has one Hong Kong subsidiary, Sino Gems (China) Limited and three subsidiaries in the People's Republic of China (together the "Group").
 
Headquartered in Shenzhen, the hub of China's gem and jewellery industry, the Group is a recognised brand name in the personalised jewellery sector with an established multi-channel sales network. The Group currently has two experience stores, one in Shenzhen and the second in Shishi, Fujian Province, and an e-commerce website at www.gamfook.com.
 
The Company's registered office is 44 Esplanade, St. Helier, Jersey JE4 9WG.
 
Strategy
 
The Group's strategy is to enhance brand recognition by promoting its "Gamfook" or "金太福" products to customers through multi-channel. New physical stores and showrooms are planned to be launched in the future to penetrate new markets in China.
 
The Group will adopt a growth strategy by focusing primarily on:
 
(a) Market penetration: For example, in 2017 the Group contracted two new authorised resellers, in Urumqi of Xinjiang Province and in Shanghai. While during the first six months of 2018, a new authorised reseller from Shenzhen has joined the rank. This method of entering into new business will help fulfil the Group's intended strategy of expansion, as sales through distributors have been a key driver of historical growth.
 
(b) Product development: For example, in late 2017, the Group introduced new products such as designer Buddhist beads made from hard gold and wood products; and
 
(c) Brand building activities: New product experience centres, advertisement campaigns and R&D (to develop new products and design). 
 
Key Strengths
 
The Directors believe that the Group has the following key strengths:
 
Established market position in personalised jewellery
The Company is a custom jewellery designer, manufacturer and retailer offering a range of goods and corporate gifts in China. In 2016, the Group had a 4.6 per cent. market share of the custom jewellery market in China.
 
History of growth in revenue and profitability
Since 2015, the Group's revenue has grown significantly, from RMB 65.48 million in 2015 to RMB 224.50 million in 2017, a compound annual growth rate of 85.2 per cent. Over the same period, net profit has risen from RMB 10.87 million to RMB 40.48 million, a compound annual growth rate of 95.2 per cent.
 
Efficient business model
The Group's business model envisages receiving up front revenues, from customers, of between 40 and 100 per cent., when they place their order and prior to purchasing any materials from suppliers. This significantly reduces the amount of inventory the Group needs to hold and its working capital requirement.
 
Intellectual property
The Group holds a number of copyrights, patents and trademarks. The intellectual properties include one unpublished software copyright of a jewellery management system, many design patents such as crystal badge pedestals, rings and baby hair brushes, several trademarks such as "Gamfook" and "金太福", and a few domain names including www.gamfook.com.
 
Barrier to entry
In addition to relatively high initial capital outlay for inventory build-up, the other main barrier to entry to the customer jewellery market is industry know-how, particularly in the grading of gemstones and diamonds. The Company retains a number of certified emerald gemologists and certified diamond graders authorised by the China National Gemological Training Centre.
 
Long standing trading relationships
The Group has long standing relationships with customers, distributors and suppliers which the Directors believe a new market entrant would find difficult to establish. For example, Shishi Lufook Ya Jewellery Co., Ltd, a leading jewellery distributor in Fujian Province, has a trading relationship with the Group spanning more than five years.
 
Experienced management team
The Group's management has extensive combined experience of the custom jewellery industry and the Chinese business environment.
 
Directors
 
The Directors of the Company, their age and positions are as follows:
 
Jindian Lin, Aged 45, Executive Chairman and Chief Executive Officer
Mr. Lin is the founder, Chairman and Chief Executive of the Group. As CEO, Mr. Lin is primarily responsible for the Group's overall strategies and planning. Mr. Lin graduated with a Diploma from Jimei University in Fujian, China in 1994 majoring in Foreign Economic Studies and a Bachelor degree from Xiamen University, China in 1999 majoring in Finance and Taxation. Before founding the Group in 2009, he was in the civil service between 1994 and 2009 and has more than 20 years of experience in management and public affairs. He is a China National Gemological Training Centre's Certified Emerald Gemologist. He is presently a visiting professor of Taiwan Chung Chou University of Science and Technology, Gemology Instructors Committee member of China's Liming Vocational University and Invited Entrepreneurship Mentor of Minnan University of Science and Technology. Mr. Lin is fluent in Mandarin, Cantonese and Minnan Dialects.
 
Zhongwei Lin, Aged 50, Executive Director and Head of Sales & Marketing 
Mr. Lin joined the Group in January 2015 as Head of Sales and Marketing. Reporting to the Group CEO, Mr. Lin is responsible for providing leadership to the Group's sales and marketing division, planning and implementing short-term and long-term sales and marketing plans targeted towards existing and emerging markets and mentoring the Group's marketing team to achieve planned sales targets. Mr. Lin graduated with a Diploma from Liming Vocational University majoring in Financial Accounting. He has more than 20 years of experience in the area of sales and marketing. Prior to joining the Group, he was the Assistant Manager (Sales & HR Management) in Kerry EAS Logistic Ltd, Quanzhou Branch, China. Mr. Lin speaks Mandarin and Minnan Dialects.
 
Wenxian Hong, Aged 41, Executive Director and Head of Purchasing
Mr. Hong joined the Group in November 2013 as Head of Procurement. Reporting to the Group CEO, Mr. Hong is responsible for providing leadership to the Group's procurement division, devising the Group procurement and sourcing strategy, identifying quality OEM suppliers and negotiating agreements with vendors. He has more than 15 years of experience in the jewellery industry. Prior to joining the Group, he was the Procurement Manager of Shenzhen Family Ring Jewellery Co., Ltd. Mr. Hong also acts as the legal representative of Shenzhen Zhongbao. Mr. Hong speaks Mandarin and Minnan Dialects.
Dennis Kian Jing Ow, Aged 52, Independent Non-Executive Director
Mr. Ow has been an experienced corporate finance practitioner in the Asia market since 2001. Mr. Ow is currently the Head of Corporate Finance of South China Securities and is responsible for developing its Asian business, identifying new deals, assisting companies raising funds in Asia and executing IPOs. He was formerly a director of Blue Oar Securities Limited (based in Asia). Prior to joining Blue Oar Securities, Mr. Ow worked as the Senior Business Manager of Asia Pacific for the London Stock Exchange for over 2 years, during this time he successfully brought eight companies from Southeast Asia to AIM and two Main Market listings from Indonesia and the Philippines. Before joining the London Stock Exchange, Mr. Ow worked for over 5 years at a public listed American company called First Data Corporation specialising in global credit cards processing and money transfer here he was responsible for their training and business development for Greater China. Mr. Ow holds an Associate Diploma in marketing and a Postgraduate Certificate in management. Dennis is fluent in Mandarin, Cantonese, Minnan Dialects and English.
 
Ivor Colin Shrago, Aged 76, Independent Non-Executive Director
Mr. Shrago was admitted as solicitor to the Supreme Court of England and Wales in 1966 and to the Supreme Court of Hong Kong in 1996. He has more than 50 years' experience practising law. In 1996 he left private practice in London to accept an offer to join Peregrine Direct Investments Limited, the investment arm of the Peregrine Banking Group in Hong Kong, as General Counsel, which was primarily involved in fund management. In 1998, he was approached to join the asset management arm of Vigers International, Asset Management Limited, Vigers Asset Management Ltd as managing director, while at the same time acting as general counsel for the group.  In 2002 he returned to private practice and is presently a Consultant with Mackrell Turner Garrett, a firm of solicitors in Central London Senior Management. Ivor speaks English.
 
Dividend Policy
 
The Board proposes to pay dividends out of cash generated from the Group's operations after setting aside necessary funding for capital expenditure and working capital requirements. As part of this policy, the Company intends to target a dividend pay-out ratio of 28% of the consolidated profit attributable to the owners of the Company under IFRS, from financial year ending 31 December 2018 onwards.
 
The payment and amount of any dividends or distributions to Shareholders will be at the discretion of the Board and will depend on the factors stated above. There is no assurance as to whether the dividend distribution will occur as intended, the amount of dividend payment or timing of such payment.
 
Reasons for Admission
 
The Directors believe that Admission is an important step in the development of the Group and that it will:
 
·     enable the Company to broaden its customer base and assist it in raising funds to expand the Group's operation and market share in China;
·      create a tradeable currency in the Company's shares; and
·      raise the Group's corporate profile as a company whose shares are traded on the NEX Exchange Growth Market.
 
Additional Information
 
The Company will be classified as an operating company in the sector of general retailers on NEX.
 
Substantial Shareholdings
 




Shareholder Name


Number of Ordinary Shares at Admission


Percentage Holding %




Jindian Lin*


72,666,670


72.67%




United Talent Investments Ltd


4,666,700


4.67%




China Bloom Investments Ltd


3,200,000


3.20%




*Nga Fan Chong, the wife of Jindian Lin, owns 133,330 shares at Admission. Together, Jindian Lin and Nga Fan Chong own 72,800,000 shares, representing 72.8% of the total shares in issue.
 
Total Voting Rights and Shares in Public Hands
 
The total number of Ordinary Shares with voting rights in the Company with effect from Admission is 100,000,000. This figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change of their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.
 
Of the total issued share capital of nil par value, there are 27,200,000 shares in total in the public hands or 27.2% of the issued share capital.
 
Document Available for Inspection
 
Copies of the Admission Document will be available free of charge during usual business hours on any weekday (Saturdays and public holidays excepted) at the offices of Irwin Mitchell LLP at 40 Holborn Viaduct, London EC1N 2PZ.
 
The Company's Admission Document can be viewed at www.gamfook.net.
 
ENDS
 
FOR FURTHER INFORMATION PLEASE CONTACT:
 




COMPANY CONTACT DETAILS:
 


 




Gamfook Jewellery Plc


www.gamfook.net




 


 




Jindian Lin, Executive Chairman
Liang Huei Lee, Chief Finance Officer
Ivor Shrago, Non-Executive Director
Dennis Ow, Non-Executive Director


+44 1534 753943




 


 




CORPORATE ADVISER AND BROKER CONTACT DETAILS:
 


 




Daniel Stewart & Company Plc


 




Daphne Zhang / Peter Shea (Corporate Adviser)


+44 (0) 207 776 6550




David Lawman (Broker)


 




 




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