Indicative Offer Price Range of HK$1.71 to HK$2.34 Per Share

HONG KONG, CHINA - Media OutReach^[1] - 31 December 2019 - A leading and fast growing integrated marketing solutions provider, Activation Group Holdings Limited ("Activation Group" or the "Company", which together with its subsidiaries, is referred to as the "Group", stock code: 09919) announced on 30 December 2019 the details of the global offering (the "Global Offering") and the proposed listing of its shares (the "Shares") on the Main Board of The Stock Exchange of Hong Kong Limited (the "HKSE").

Ms. Carina Lau Kar-ling (middle), Mr. Steve Lau (4th from the left), Co-chairman and Chief Executive Officer of Activation Group, Mr. Johnny Ng (4th from the right), Co-chairman and Chief Operating Officer and Activation Group's management.

A 360° virtual reality photo is taken of Ms. Carina Lau Kar-ling with Hong Kong's harbour view as the backdrop. The technology is developed by Activation.

The Global Offering of a total of 200,000,000 Shares (the "Offer Shares") is comprised of 180,000,000 Shares for an international placing (the "International Placing") and of 20,000,000 Shares for a Hong Kong public offering (the "Hong Kong Public Offering"), which respectively represent 90% and 10% of the total number of the Offer Shares. The offer price (the "Offer Price") is in the range of HK$1.71 to HK$2.34 per share. The over-allotment option allows the issue of up to 30,000,000 additional shares, or equivalent to 15% of the Offer Shares.

The net proceeds from the Global Offering are estimated to be approximately HK$355.1 million after deducting the underwriting commissions and other estimated expenses in connection with the Global Offering, assuming an Offer Price of HK$2.025 per Offer Share being the mid-point of the indicative offer price range, and assuming that the Over-allotment Option is not exercised. The Group intends to use the net proceeds for the following purposes:

• Approximately 55.9%, or HK$198.5 million is expected to be used to develop and expand the Group's existing business of integrated marketing solutions and intellectual property ("IP") development;
• Approximately 34.2%, or HK$121.6 million is expected to be used as cash reserve for strategic investment funds for seeking suitable cooperation or investment opportunities which are of strategic benefit to the Group; and
• Approximately 9.9%, or HK$35.0 million will be used for general replenishment of working capital and other general corporate purposes.

Activation Group is a leading and fast-growing integrated marketing solutions provider that provides experiential marketing, digital marketing and brand promotion. It also provides public relations services in Greater China through its operations in Shanghai and Beijing. According to a report by China Insights Industry Consultancy Limited, which is an independent market research and consulting company, Activation Group ranked first in experiential marketing services for premium and luxury brands in Greater China in 2018 with an approximately 6.3% share of the market. The Group's international clientele includes Louis Vuitton, Chanel, Tiffany & CO. and Mercedes-Benz. The Group also taps into the market for sports and entertainment IP development. The Group has been operating its business of IP development, mainly for the sports sector, in 2016, when it entered into IP cooperation agreements with Amaury Sport Organization (A.S.O.) and LaLiga and was granted exclusive rights to organise authorised events and other rights for marketing, sponsorship, merchandising and other uses in China. In 2017, the Group and jointly established Stufish Asia to begin the business of entertainment IP development.  

As Greater China's leading experiential marketing services provider for international premium and luxury brands, Activation offers a comprehensive range of marketing solutions to its clients, including creative design services for event concept, event planning and management, event venue set-up and event execution. The Group formulates marketing solutions based on its clients' requirements and works with them to implement tailored design and execute the plans for the events. The Group also directly engages various suppliers as required for the event and ensure that the event is well set up to fit its clients' needs while ensuring compliance with applicable laws and regulations.

Apart from providing experiential marketing services for clients, Activation Group also provide digital marketing services. Its services include launching marketing campaigns for its clients on social media platforms such as Weibo, WeChat, Douyin, Redbook, Facebook and Instagram. The Group also promotes clients' products on online platforms such as Tmall. The Group also assists clients in engaging with key opinion leaders and in digital media advertising. In addition, the Group provides public relations strategic consultancy services, day-to-day client communications, media relationship management, liaison and celebrity coordination services.

In its business of sports IP development, the Group has been granted exclusive rights by ASO through agreements about cooperation to use the brand of "Le Tour de France". The Group held the Tour de France Škoda Shanghai Critérium cycling races in Shanghai in 2017 and 2018 and it held L'Étape du Tour de France races in Changsha in 2017 and Beijing in 2018. A L'Étape du Tour de France race was also held in Zhuji, Zhejiang Province in May 2019.

In its business of entertainment IP development, the Group has entered into a joint venture agreement with Stufish Productions to expand and develop the live entertainment services of Stufish Asia, and to produce and manage live events in mainland China, Hong Kong, Macao, Taiwan and Singapore. Stufish Asia produced and operated its first live stunt show "ELĒKRŎN" at Studio City, Macau in 2019.

Of the Group's prospect, Mr. Steve Lau Kam Yiu, Co-chairman and Chief Executive Officer of Activation Group, said, "Premium and luxury brands' expenditure on marketing solution services in Greater China was growing at a CAGR of 11.6% from 2014 to 2018. Such expenditure is expected to continue to grow. For many years, Activation Group has been a one-stop integrated marketing solutions provider for international premium and luxury brands. The Group's visionary and seasoned management has been steering it to business expansion. The Group has also significantly expanded its businesses of digital marketing and public relations services through mergers and acquisitions. At the same time, the Group pioneered the business of sports and entertainment IP development and obtained exclusive rights to develop the international sporting IP of LaLiga Club and Le Tour de France, thus laying a solid foundation for the Group's further development of China's market for sporting events. Activation Group's revenue CAGR from 2016 to 2018 was 37.5%, while its adjusted net profit CAGR from the first half of 2018 to the first half of 2019 reached 70%."

Looking to the future, Mr. Steve Lau Kam Yiu said, "Activation Group plans to further increase its market share and enhance its overall competitiveness as a leading integrated marketing solutions provider and to further expand its business of IP development. The Group will scale up its integrated marketing solutions business, recruit high-caliber talent and improve operational efficiency, especially for our digital marketing. At the same time, the Group will expand both its geographical market coverage and its clientele. It will establish an office in Paris to expand its client base in the European market. It will also seek to capture business opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area."

The Hong Kong Public Offer is expected to commence at 9:00 am on 31 December 2019 (Tuesday) and is expected to close at 12:00 noon on 9 January 2020 (Thursday). Dealings in the Shares on the Stock Exchange are expected to commence on 16 January 2020 (Thursday) under the stock code of 09919.

References

1. ^{^} Media OutReach (www.media-outreach.com)