Offering DetailsThe Group intends to offer a total of 285,000,000 shares (subject to the over-allotment option), of which 256,500,000 shares are for International Placing (subject to adjustment and the over-allotment option) and the remaining 28,500,000 shares are for the Hong Kong Offer (including 2,850,000 employee reserved shares, subject to adjustment). Assuming the over-allotment option is not exercised and the offer price is HK$0.88 per share (being the mid-point of the indicative offer price range between HK$0.71 and HK$1.05), net proceeds from the Global Offering are expected to be approximately HK$203.4 million.

The Hong Kong Public Offer will commence on 22 June 2018 (Friday), and end at 12:00 noon on 27 June 2018 (Wednesday). The final offer price and the allocation results are expected to be announced on or before 4 July 2018 (Wednesday). Trading of the shares of SLD Group is expected to commence on SEHK on 5 July 2018 (Thursday) under the stock code 2262. The shares will be traded in board lots each of 3,000 shares.

Dongxing Securities (Hong Kong) Company Limited ("Dongxing Securities") is the sole sponsor, while Dongxing Securities, China Securities (International) Corporate Finance Company Limited, China Merchants Securities (HK) Co., Limited and Guotai Junan Securities (Hong Kong) Limited are the joint global coordinators, joint bookrunners and joint lead managers of the proposed listing.

Investment Highlights

An internationally renowned and award-winning interior design services and interior decorating & furnishing services provider Established in 1997, the Group has gained widespread recognition in the industry with its solid design experience and reputation while garnering many awards and honours. It was recognised as the number one interior design firm in the residential category and the top second and 21st interior design firm in the Asia and global rankings, respectively, by the 2018 Top 100 Giants Research issued by the Interior Design magazine of the United States. In addition, according to Frost & Sullivan Report, the Group ranked second in the PRC and Hong Kong based on revenue for FY2017, among companies within the interior design and decorating services industry that did not offer any fitting out services.

Award-winning projects include Yuan at Atlantis The Palm, Dubai; The Eight at Grand Lisboa Hotel, Macau; and The Orchard Residence in Singapore; yoo Residence II, MX, and Novotel Citygate Hong Kong Hotel in Hong Kong; and One Park Shanghai, Nanjing Mandarin Palace, Tang Island, and One Shenzhen Bay in Mainland China.

Stable client base in the PRC and Hong KongDuring the track record period (i.e. FY2015 to FY2017), the Group served over 390 clients including well-known hotel operators and developers such as Shangri-la Hotels Pte Ltd. and listed property developers in the PRC and Hong Kong such as K.Wah Real Estates Co., Ltd., Yanlord Land Group Limited, China SCE Property Holdings Limited and Agile Group Holdings Limited. Over 70% of the Groups total revenue can be attributed to recurring clients , with property developers being its key clients . Other clients include individual private clients, restaurant operators, hotel developers and operators, well-known furniture and lifestyle product brands and private corporations. In FY2017, the Group has maintained business relations that range from three to 11 years with its five largest clients. As a member of Jangho Group Co., Ltd. ("Jangho Group"), a company listed on the Shanghai Stock Exchange (stock code: 601886), the Group enjoys synergies derived from its own established brand and the extensive business network of its parent company, enabling it to further strengthen its client base. By leveraging Jangho Group's business network in architecture and construction, healthcare and medical services, the Group can also develop its own specialisation to enhance its competitiveness and broaden its client base in the PRC.

Outstanding and experienced management, design and decorating teamsThe Group's founder, Mr. Steve Leung, is a renowned architect and interior and product designer with more than 30 years of experience in the interior design and decorating services and architecture industries. He is mainly responsible for the brand building, market development and strategic planning activities of the Group, as well as creative design of key projects. Between 2000 and 2017, the awards and honours that Mr. Steve Leung received include being elected as one of the 50 Most Influential Persons of the Year by INTERNI and named as one of the 20 most influential interior designers in the PRC by Hurun Interior Designers List 2017, published by the Hurun Research Institute of the PRC. He was honoured as the winner of the Andrew Martin International Interior Designer of the Year Award in 2015, selected as one of the 30 Most Influential Designers by FORBES China, and has been named one of the world's top interior designers by the Andrew Martin International Interior Design Awards on 14 occasions since 2000. Mr. Steve Leung also holds several prominent industry positions, including the President of the International Federation of Interior Architects/Designers from 2017 to 2019 - becoming the first Chinese president ever.

Apart from the founder, many of the senior management members also have over 20 years of experience in the architecture and interior design and decorating services industries. The Group has more than 20 design and decoration teams with over 380 interior designers and decorators stationed in both the PRC and Hong Kong as at the latest practicable date. The teams are led by over 25 interior designers and decorators with Design Directors and Senior Decorator or more senior titles who have from five to over 17 years of experience in the interior design and decorating services industry. Moreover, talented graduates from design schools and experienced interior designers and decorators are also identified and recruited through a scholarship programme and referrals from employees. Orientation and on-the-job training are provided to these employees to ensure that they are familiar with the Group's internal design standards and specifications. The Group also provides training opportunities to make sure its designers are kept abreast of new market trends and technologies.

Well-established internal control systems for maintaining design quality and efficient execution capabilityThe Group's founder and chief creative officer have formulated in-house design references and guidelines that cover various areas. They have also formulated and implemented a set of standards and specifications to manage such deliverables as layout plans and image boards. To monitor in-house standards and specifications, the Group has also adopted an internal control system. The Group's chief creative officer, director of design, and design management and support team are responsible for overseeing the deliverables produced by each design and decoration team for each project. The Group has obtained ISO9001:2008 certification for its operations in the PRC and Hong Kong in recognition of its quality management system.

Stable Financial PerformanceThe Group has maintained a solid financial position during the track record period. Its revenue for FY2016 and FY2017 rose 27.5% and 36.5% yoy respectively, from HK$249.9 million for FY2015 to HK$318.6 million for FY2016, and it recorded HK$434.8 million in FY2017. At the same time, the Group's gross profit and net profit have continued to rise, which can mainly be attributed to the growth of the real estate market in the PRC, leading to a substantial increase in service demand. Furthermore, the Group officially introduced interior decorating and furnishing services in 2015 that contributed to the overall revenue rise. In addition, the contract sum of new contracts awarded to the Group during the record period has continued to rise, climbing from HK$354 million in FY2015 to HK$523 million in FY2017 - achieving a CAGR of 21.6%.

Future Development PlansAccording to Frost & Sullivan Report, the PRC real estate market will steadily grow going forward. Real estate development investment is projected to achieve a CAGR of 5.5% from 2018 and reach RMB1,500 billion in 2022. Total private residential project expenses in Hong Kong are projected to increase at a CAGR of 16.7% from 2017 and reach HK$230.2 billion in 2021. These trends, coupled with the increasing demand for interior design and decorating services which focus on the elderly, improved medical care, advanced technologies and protecting the environment will create a stable operating environment for the interior design and decorating services market. To capture these opportunities and maintain growth momentum, the Group intends to use approximately 50% of the proceeds from the listing on strengthening its interior design services and developing specialisation services, as well as bolstering its interior decorating & furnishing services. Such efforts include expanding existing design and decoration teams, developing their specialisations, expanding and diversifying the FF&A catalogue, expanding headquarters and offices and stepping up marketing efforts. As product design services are considered complementary to interior design and interior decorating & furnishing services, the Group will recruit more product designers and direct greater resources towards researching and developing the latest skills, technologies and processes in product design so as to capture cross-selling opportunities.

The Frost & Sullivan Report also found that the interior design and decorating services markets where the Group operates are highly fragmented and competitive, with the largest market player accounting for less than 0.5% of the total market share in the PRC and Hong Kong in terms of revenue in FY2017. Taking this into consideration, the Group plans to use about HK$30 million of the proceeds from the listing on acquiring one or two small-scale interior design and decorating services companies in the PRC to expand and strengthen its business, as well as seize opportunities in the PRC market. As the Group's businesses continue to grow, it needs to enhance operational efficiency to achieve effective cost control. Therefore, other than maintaining existing systems and processes, the Group also plans to invest more (approximately HK$23.3 million of the proceeds from the listing) on improving its information technology systems.

Use of ProceedsAssuming an offer price of HK$0.88 per Share, being the mid-point of the indicative offer price range, the net proceeds from the offering are estimated to be HK$203.4 million and the Group intends to use such net proceeds as follows:

Items / %Strengthen interior design services and develop specialisation: 34.7%Further develop interior decorating & furnishing services: 16.1%Pursue growth through selective mergers and acquisitions: 14.8%Improve information technology systems: 11.5%Repay existing bank borrowings: 9.8%As working capital and other general corporate purposes: 5.8%Enhance brand recognition: 5.7%Further develop product design services: 1.6%

About Steve Leung Design Group LimitedSteve Leung Design Group Limited is an internationally renowned and award-winning interior design and interior decorating & furnishing company founded in 1997 by Mr. Steve Leung. Headquartered in Hong Kong, the Group has branch offices in Beijing, Shanghai, Guangzhou, Chengdu and Shenzhen, and with over 500 staff. The Group is second largest interior design services providers which did not provide any fitting-out services in the PRC and Hong Kong in terms of revenue for FY2017.

The Group has a wide spectrum of design projects that have been accredited with design awards in Asia Pacific region and worldwide. Overseas award-winning projects include Yuan at Atlantis The Palm, The Eight at Grand Lisboa Hotel in Macau; PRC projects include: One Park Shanghai, One Shenzhen Bay, Nanjing Mandarin Palace and Tang Island; and Hong Kong projects include: MX, yoo Residence II and more. The Group has become part of Jangho Group since 2014.

Media Enquires:Strategic Financial Relations LimitedVicky Lee Tel: (852) 2864 4834 Email: [email protected]^[1] Rita Fong Tel: (852) 2114 4939 Email: [email protected]^[2] Yoko Li Tel: (852) 2864 4813 Email: [email protected]^[3] Fax: (852) 2527 1196

Topic: Press release summarySectors: Daily Finance, Daily News^[4][5] http://www.acnnewswire.com From the Asia Corporate News Network

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