HONG KONG, Oct 31, 2019 - (ACN Newswire) - Lever Style Corporation ("Lever Style" or the "Group"), the apparel engine behind digitally native and conventional premium fashion brands, which provides end-to-end supply chain solutions for notable brands across the U.S., Europe and APAC, today announced the details of its proposed Global Offering and listing of Shares (the "Listing") on the Main Board of The Stock Exchange of Hong Kong Limited ("SEHK"). Unless otherwise defined herein, capitalised terms used shall have the same meanings as those defined in the prospectus dated 31 October 2019 issued by Lever Style.

Highlights- Lever Style is the apparel engine behind digitally native and conventional premium fashion brands. It provides end-to-end supply chain solutions for notable brands including "AllSaints", "Boden", "Theory", "Vince" and "Vineyard Vines", digitally native brands such as "Everlane" and private labels of digitally native platforms such as "Stitch Fix"- The Group transformed from a traditional, self-operated manufacturing model to an asset-light business model, thereby solving the conventional challenges such as steep overheads and underutilised capacity, and produced 50.2% adjusted return on equity in 2018 - Digitally native customers were the Group's strongest revenue driver, which brought in revenue that grew at a CAGR of approximately 55.3% between 2016 and 2018, and accounted for approximately 46.3% of the Group's total revenue in 2018- Lever Style has developed a multi-jurisdiction manufacturing network comprising 60 contract manufacturers in China, Vietnam and the rest of the APAC Region- The Group entered into agreements with 3 cornerstone investors, namely Poolside Ventures Limited (investment fund invested by a select group of founders of Alibaba Group Holding Limited), Mr. Victor Herrero (board member of Global Fashion Group) and Mr. Soegianto (chairman and director of P.T. Metro Garmin) - The Group intends to expand its apparel category portfolio through acquisitions that can enhance its versatility and profitability by achieving synergies such as cross-selling and development of hybrid products with higher growth potential

Offering Details

Lever Style intends to offer a total of 172,800,000 Offer Shares, of which 90% are International Placing Shares (subject to the Over-Allotment Option and reallocation) and 10% are Hong Kong Offer Shares (subject to reallocation). The indicative Offer Price range is between HK$0.85 and HK$1.05 per Offer Share. After deduction of relevant expenses and assuming an Offer Price of HK$0.95 per Offer Share, being the mid-point of the indicative Offer Price range, and assuming the Over-Allotment Option is not exercised, the net proceeds are estimated at approximately HK$122.7 million.

The Hong Kong Public Offering commenced today (31 October 2019 (Thursday)) and will end at noon on 6 November 2019 (Wednesday). The final Offer Price and allotment results are expected to be announced on 12 November 2019 (Tuesday). Dealing of Lever Style's Shares is expected to commence on the Main Board of SEHK on 13 November 2019 (Wednesday) under the stock code 1346, and will be traded in board lots of 4,000 Shares each.

Altus Capital Limited is the Sponsor of the Global Offering. Crosby Securities Limited is the Sole Global Coordinator, and together with China Tonghai Securities Limited, Shanxi Securities International Limited and CMBC Securities Company Limited, the Joint Bookrunners and Joint Lead Managers of the Global Offering.

Cornerstone Investors

The Group has entered into cornerstone investment agreements with three investors, namely Poolside Ventures Limited, Mr. Victor Herrero and Mr. Soegianto (together, the "Cornerstone Investors"), pursuant to which the Cornerstone Investors have agreed to, subject to certain conditions, subscribe at the Offer Price for such number of Offer Shares (rounded down to the nearest whole board lot of 4,000 Shares) that may be subscribed for an aggregate amount of US$4,455,100.

Poolside Ventures Limited is an investment fund established in the Cayman Islands and managed by Blue Pool Capital Limited, a multi-strategy investment firm based in Hong Kong ("Blue Pool"). Blue Pool invests in all major asset classes including public and private equity and real estate globally. The firm is owned by the management and manages the assets of the management and a group of close-knit long term investors including a select group of founders of Alibaba Group Holding Limited, a company listed on the New York Stock Exchange (stock code: BABA: US).

Mr. Victor Herrero is currently a board member and chair of the sustainability committee of Global Fashion Group ("GFG"), a listed company on the Frankfurt Stock Exchange in Germany (stock code: GFG:GR). GFG owns various fashion e-commerce platforms including "ZALORA", and "THE ICONIC". Mr. Herrero is also currently a board member of Clarks (a British footwear company) and a board member of G-III Apparel Group Ltd, a company listed on NASDAQ. Mr. Herrero was the chief executive officer and director of Guess, Inc. from 2014 to 2019.

Mr. Soegianto is the chairman and director of P.T. Metro Garmin, a garment company based in Indonesia, which is also a supplier to Lever Style.

Investment Highlights

Multifaceted versatility in terms of manufacturing location, order volume and production lead time catering to individualised/distinctive production needs of customersAccording to Frost & Sullivan, the global apparel retail industry is expected to reach an expected retail sales of approximately US$1,753.3 billion in 2023, and among all apparel retail markets, digitally native brands and platforms are seeing faster growth at a CAGR of approximately 6.3% between 2019 and 2023. Despite their strong growth potential, digitally native customers tend to lack in-depth understanding of the apparel supply chain solutions industry and would reach out to end-to-end supply chain solutions providers like Lever Style.

Lever Style, having transformed from a traditional, self-operated manufacturing model to an asset-light business model, achieved a 50.2% adjusted return on equity in 2018. By engaging contract manufacturers, it has greater flexibility and adaptability to accommodate customers' supply chain needs. Backed by established business relationships with contract manufacturers, the Group is able to accept orders ranging from a single made-to-measure piece to over 200,000 pieces for brands with large distribution. With the multifaceted versatility in terms of order quantity and production lead time, it allows the Group to satisfy small order volumes of emerging brands at their initial stage of development and support their evolving need for higher speed-to-market. The Group's clientele includes digitally native customers such as "Everlane" and "Stitch Fix" and the revenue contribution from digitally native customers rose to approximately 46.3% of the Group's total revenue in 2018.

The Group has a well-developed multi-jurisdiction contract manufacturing network with 60 independent contract manufacturers throughout the APAC region such as China, Vietnam, Indonesia and Cambodia. The multi-location production platform allows Lever Style to make use of lower import tariffs, international trading policy benefits and lower manufacturing costs, thus mitigate geopolitical risks and ease the transition of geographic relocation. This can also enable it to better support customers' expansion efforts and growth strategies in various regions.

Ability to develop and deliver high value-added product development to accurately realise customers' design visionsWith a 60 plus-year history in garment manufacturing and a strong team making up of over 100 employees specialising in (i) pattern making; and (ii) technical package and prototype development, the Group has valuable technical know-how to satisfy stringent aesthetic standards of premium brands. The Group has collaborated with premium brands such as "AllSaints", "Boden", "Theory", "Vince" and "Vineyard Vines". Such advanced product development capabilities, honed over decades of collaboration with top designer brands, have enabled the Group to accurately translate customers' concepts into prototype samples and then into bulk production friendly instructions.

Diversified product portfolio with multiple apparel categoriesLever Style offers an efficient and convenient all-inclusive platform for customers to realise their brand vision across multiple apparel categories such as shirts to bottoms, suit, outerwear, athleisure, cut-and-sewn knit, soft wovens and denim. Its growing apparel category portfolio underpins its business sustainability as the Group does not over-rely on a certain critical product and/or customer. The Group is also less susceptible to fashion cycles in respect of brands and/or type of apparel items. By offering multiple apparel categories, Lever Style is able to help customers improve the efficiency of their supply chains, as they can capitalise on the Group's thorough understanding of their unique brand positioning and mode of operations by partnering with the Group on multiple apparel categories, resulting in stronger business relationship. The wide offerings of apparel categories also provide cross selling opportunities for Lever Style to enhance customer penetration and enlarge customer base to drive sustainable growth.

Established and growing reputation and business relationship with customers and contract manufacturers The Group has extensive experience and strong technical know-how in garment manufacturing. Lever Style has been collaborating with its top five customers on average for almost a decade. Together with its established relationships with contract manufacturers and material suppliers, the Group has wide-ranging and reliable access to a seamless supply chain network, fortifying its multifaceted versatility while allowing it to maintain cost efficiency.

Future Development Strategies

In view of the increasing demand of the global apparel retail industry, Lever Style will expand its apparel category portfolio by adding new apparel categories through acquiring apparel suppliers with strong technical know-how in their respective specialties. The Group targets to acquire private, particularly family-owned businesses in Developing Asia , such as Vietnam, Indonesia, Philippines and China, ones that can be integrated with and complement Lever Style's business model, thus help enhance its versatility and profitability. The expansion is also expected to create incremental profitability for the Group by achieving synergies such as cross-selling and development of hybrid products with reference to the latest fashion trend, and allow it to grasp opportunities with high growth potential apparel products.

The Group will also create an online B2B platform that can allow customers to customise their designs in real time and place orders directly using a centralised, built-in online design system. The platform can help the Group enhance customer penetration and strategically enlarge its digitally native customer base. To support the apparel category expansion and broadening of customer base, Lever Style intends to keep expanding its contract manufacturer network in terms of capacity, capability and geographically to developing countries such as India. All these strategies can enable the Group to strengthen its market position and drive future business growth, and become the partner of choice for fashion brands that seek quality products.

Use of Proceeds

Assuming the Offer Price is fixed at HK$0.95 per share (being the mid-point of the indicative Offer Price range), the Group intends to use the net proceeds of approximately HK$122.7 million on the following:

Items Percentage (%)Expansion into the additional apparel categories by acquisition(s): 68.3%Capital investment in relation to B2B online platform: 16.3%Capital investment in relation to digitalisation: 5.9%Repayment of existing debts: 5.3%General working capital: 4.2%

Financial Performance

For the years ended 31 December Four months ended 30 April 2016 2017 2018 2018 2019Revenue (US$'000) 100,596 100,795 115,886 34,985 37,203Gross profit for the year/period (US$'000) 18,419 24,697 30,260 8,860 10,465Gross profit margin (%) 18.3 24.5 26.1 25.3 28.1Adjusted profit for the year/period* (US$'000) 1,905 4,496 6,751 1,742 2,188Adjusted net profit margin* (%) 1.9 4.5 5.8 5.0 5.9

*Note: The adjusted net profit margin was calculated based on the adjusted profit (deducting the one-off gain on disposal of subsidiaries in 2016 and adding the non-recurring Listing expenses in 2018 and four months ended 30 April 2019 to the profit for the year/period) divided by revenue. The adjusted figures are for illustration purpose only to assess the Group's performance excluding the impacts of items that the Group does not consider indicative of the performance of its business, and are not required under the HKFRSs and are non-HKFRS measures.

About Lever Style CorporationLever Style Corporation is the apparel engine behind digitally native and conventional premium fashion brands, which provide end-to-end supply chain solutions for notable brands across the U.S., Europe and APAC. The Group has a clientele including widely recognised premium brands such as "AllSaints", "Boden", "Theory", "Vince" and "Vineyard Vines", digitally native brands such as "Everlane" and private labels of digitally native platforms such as "Stitch Fix". It currently possesses a well-developed multi-jurisdiction contract manufacturing network with 60 independent contract manufacturers spanning China, Vietnam, Indonesia and Cambodia. For more details about Lever Style, please visit their website: www.leverstyle.com

Media Enquiries:Strategic Financial Relations LimitedVicky Lee +852 2864 4834 vicky.lee@sprg.com.hkAngela Wong +852 2114 4953 angela.wong@sprg.com.hk Rachel Lau +852 2864 4824 rachel.lau@sprg.com.hk www.sprg.com.hk

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