The company's advantages are (1) the leading professional online trading service provider in China's mobile phone charging service industry; (2) the large and fast-growing user base; (3) the largest and pioneer supplier of mobile phone recharging service through the domestic banking electronic banking system; (4) a reliable, secure and scalable proprietary operating platform supported by strong R & D capabilities. (5) responsible and experienced management team.
According to the Sadie report, the total exchange value of China's mobile phone recharge market increased from about 613.5 billion yuan in 2010 to about 849.4 billion yuan in 2014, with a compound annual growth rate of 8.5 percent, and is expected to reach 1.1528 trillion yuan by 2019. The compound annual growth rate has been 6.3% since 2014.
China Telecom Corporation operators mainly provide online recharge services through their Internet and mobile Internet portals. When recharging a mobile phone account, mobile users can enter their mobile phone number and recharge amount through the website operated by China Telecom Corporation operators, and use bank cards to make online payments. Although the relevant online channels provide convenience for mobile phone users, online payment transactions through the China Telecom Corporation operator portal involve security issues. According to Sadie's report, revenue from online mobile phone recharging channels from China Telecom Corporation operators reached about 132.5 billion yuan in 2014, accounting for about 15.6 percent of the total revenue from all mobile phone recharging channels, and is expected to reach about 251.9 billion yuan in 2019. It accounts for about 21.9% of the total revenue from all mobile phone recharge channels.
The offline recharge channels operated by China Telecom Corporation operators include automatic payment arrangements with banks, payments at the branches of China Telecom Corporation operators and self-service terminal payments at China Telecom Corporation operators. According to the Sadie report, in 2014, the revenue from offline mobile phone recharge channels operated by China Telecom Corporation operators reached 251.4 billion yuan, accounting for about 29.6% of the total revenue from all mobile phone charging channels. It is expected to reach about 297.1 billion yuan in 2019, accounting for about 25.7% of the total revenue from all mobile phone recharge channels.
Profitability and financial figures based on the track record of the past three years, the group's revenue regressed from 87.4 million yuan in fiscal year 2012 to 223.6 million yuan in fiscal year 2014, with a compound annual growth rate of 59.9%. Net profit increased from 24.6 million yuan in 2012 to 54.5 million yuan in 2014, representing a compound annual growth rate of 48.8 percent.
The increase in earnings during the track record period was mainly due to the increase in mobile phone recharge requests received by the Group through the electronic banking system operated by banks in China and the expansion of other banking networks of the Group.
HK $78.7 million (calculated at the median price of HK $1.38 per share) from this fund-raising will be used for the following purposes: about 20% will be used to strengthen Internet marketing activities and online advertising, expand the group's bank coverage in China and launch end-user-oriented smart phone applications. Thus enhance the recognition of the group's brand by channel partners (including Chinese banks, offline channels and third-party online platforms). About 20 per cent will be used for upgrading the group's hardware and network infrastructure, including data center facilities and data processing servers, network security solutions, bandwidth expansion and disaster data recovery systems to optimize the network operating environment; about 15 per cent will be spent on software and research and development, including upgrading and improving the 007ka telephone charging platform, purchasing specialized software and recruiting more experienced R & D personnel About 20% will be spent on purchasing mobile phone charges to meet the growing demand for the Group's top-up services; about 15% will be used for potential acquisitions of businesses and assets that can complement the Group's business and operations (such as online services and other Internet-related businesses) or strategic alliances with value chain partners. As of the final practicable date, the Group has not identified any specific acquisition or strategic alliance targets; about 10% will be used for general working capital and other general corporate purposes.