On March 4, 2024, Quzhi Group Qunabox Group Limited (hereinafter referred to as “Quzhi Group”) from Shanghai submitted a prospectus on the Hong Kong Stock Exchange to be listed on the Hong Kong Main Board. This is another application after its submission expired on September 4, 2023. On January 18, 2024, Quzhi Group received an overseas issuance listing filing notice from the International Cooperation Department of the China Securities Regulatory Commission. It intends to issue no more than 69.8648 million overseas listed common shares and list them on the Hong Kong Stock Exchange.

Links to Fun Group's prospectus:

https://www1.hkexnews.hk/app/sehk/2024/106276/documents/sehk24030402250_c.pdf

Main business

Quzhi Group, founded in 2013, is a marketing service provider focusing on outdoor marketing of FMCG products. It uses a widely distributed vending machine network with interactive marketing functions, combined with an online platform with technical support, so that target consumers can have a convenient and fun experience when testing and obtaining FMCG products, and at the same time solicit necessary interaction and feedback.

The vending machine developed by Quzhi Group is equipped with various modules, including smell emission, motion recognition and voice interaction, to achieve efficient and interactive machine marketing services. According to the consulting data, the company is the only company in China that provides such services.

According to Insight Consulting, in terms of revenue in 2022, Quzhi Group was the fifth largest FMCG outdoor marketing solution provider in China, with a market share of about 0.9%.

As of December 31, 2023, Quzhi Group operated 7,543 vending machines in 22 cities across the country, most of which were located in commercial properties. By attracting consumers to visit and interact and turning them into users of the company's online platform Quina, it integrates offline and online channels. Quizhi Group had approximately 15.9 million annual active users in 2023. According to Insight Consulting, during the track record period, Quzhi Group provided about 1,400 SKUs of FMCG marketing services to 472 brand customers, including products from 74 emerging brands in China's top 100 emerging brands in the beverage, food, and daily necessities industries.

Quzhi Group's revenue mainly comes from marketing services (standardized marketing services, value-added marketing services), product sales, and other services.

• Marketing services. Among them, standardized marketing services aim to help brands in the FMCG industry increase brand awareness. The company charges service fees for brand customers according to the scale, duration and complexity of the project, scope of work, labor costs, space and media resources, number of vending machines used, and any special requirements of brand customers. Value-added marketing services aim to meet the diverse needs of brand customers, optimize marketing strategies and improve product competitiveness, and charge different service fees according to the quantity and complexity of the information to be processed, the scope of work, and the cost of human and technical resources.

• The revenue from product sales mainly comes from retailing products through the company's vending machines and online platforms, including beverages, food, daily necessities and cosmetics.

• Other services include developing IT systems and customized software for customers, covering IoT technology applications, information sharing and analysis, and IT platform development. The company generally charges customers per project, taking into account the complexity of the project and the human resource costs generated by the R&D team. The customers in this line of business are enterprise customers, which usually do not overlap with brand customers of AIoT marketing solutions.

Shareholder structure

According to the prospectus, in the pre-listing shareholder structure of Quzhi Group,

Ms. Yin Juehui holds 29.75% of the shares through Trust Control Beyond Sectors;

Ms. Yin Juelian (sister of Ms. Yin Juehui) holds 3.63% of the shares in Q-robot, which is controlled by a trust;

Mr. Cao Liwen, KioskJoy, which is controlled through a trust, holds 3.63% of the shares;

Mr. Wu Wenhong, through INSIGMA, holds 1.81% of the shares;

Mr. Huang Aihua, through NeoBox, holds 1.81% of the shares;

Mr. Qian Jun holds 1.81% of the shares through the Q-robot shop.

The shareholders mentioned above are concerted actors. They acted in concert according to Ms. Yin's instructions and held a total of about 42.45% of the shares.

Mr. Yeung Man, the contact person of Ms. Zhou Li, a non-executive director, holds 9.3% and 3.16% of the shares through Banyan Pacific and BPC, respectively;

Junlian Capital, through Shanghai Junna, holds 9.05% of the shares;

Mr. Zhang Fan, through QFUN, holds 1.07% of the shares;

Xiamen C&D, holding 7.41% of the shares;

Mr. Wang Qing, through QFUN Tech, holds 1.18% of the shares;

Mr. Liu Xiaoying, founder of Eagle Fund, holds 3.21% of the shares;

Shanghai Eagle Speed, holding 0.33% of the shares;

Shanghai Xiang Yi Qui, holding 0.25% of the shares;

Shanghai Yingmaisheng, holding 1.39% of the shares;

Mr. Qi Zhenlin, through Beyond Marketing, holds 0.25% of the shares;

Shanghai Yuanyizhi, holding 1.65% of the shares;

Shanghai Yuanyuqu, holding 8.77% of the shares;

Yuanqu Phase III holds 2.88% of the shares;

Mr. Hu Minglie, through foresight, holds 0.58% of the shares;

Mr. Chen Haohua, through Sinoace, holds 1.05% of the shares;

Shanghai Hongjiuqu, holding 3.49% of the shares;

The Anji County Finance Bureau, through Ai Liang Shan, holds 2.54% of the shares.

Directors and Executives

The board of directors of Quzhi Group consists of 9 directors, including 3 executive directors (Ms. Yin Juehui, Mr. Cao Liwen, and Mr. Huang Aihua), 3 non-executive directors (Mr. Dai Jianchun, Mr. Chen Rui, and Ms. Zhou Li), and 3 independent non-executive directors (Dr. Che Lufeng, Mr. Zhu Lin, and Dr. Yang Bo).

In addition to the executive director, executives include Chief Financial Officer Yin Juelian.

Company performance

According to the prospectus, in the past three fiscal years of 2021, 2022 and 2023, Quzhi Group's operating income was RMB 502 million, 554 million yuan and RMB 1,007 million, respectively. The corresponding net profit was RMB -139 million, -116 million and 137 million yuan respectively. The corresponding adjusted net profit was RMB 52 million, 78 million yuan and 201 million yuan respectively.

Intermediary team

Quzhi Group's intermediary team for this IPO mainly consists of Haitong International as its sole sponsor; Ernst & Young as its auditor; Zhide and Mimax are the company's Chinese lawyers and the company's Hong Kong and US lawyers respectively; Jingtian Gongcheng and Ke Lu are their respective lawyers; and Insight Consulting is their industry adviser.