OVERVIEW

We are the second largest provider of mechanical splicing services to the reinforced concrete construction industry in Hong Kong, in terms of overall sales revenue in 2016, occupying approximately 27% of total market share. BOSA HK, our sole operating subsidiary, was established in Hong Kong in early 2012. Our mechanical splicing services include two elements:

Processing reinforcing bars:

we provide services of cutting, crimping, chamfering ends of and threading of reinforcing bars of our customers either at our premises or at the premises of our customers by using our self-developed proprietary technology and methods; and

Connecting reinforcing bars by couplers:

we connect one end of the processed reinforcing bars with our self-designed couplers.

We provide two types of reinforcing bars processing services: one under our trademark ‘‘Servisplice’’ (‘‘Servisplice Services’’) and the other one under our trademark ‘‘Seisplice’’ (‘‘Seisplice Services’’). Servisplice Services do not add ductility to the mechanical splicing systems, unlike Seisplice Services which add seismic-resistance and ductility to the mechanical splicing systems.


PRODUCTION

We provide all our services either in our workshops or at our customers’ sites in Hong Kong. As at the Latest Practicable Date, we had two workshops located in Fanling and Ping Che, the New Territories, Hong Kong. To provide our splicing services, our main equipment includes reinforcing bar cutting machines, self-developed automated CNC crimping machines and CNC threading machines. We custom design, develop and assemble our main equipment. We use our equipment at our workshops or install and use our machines at our customers’ sites, depending on the needs of our customers.

PROJECTS AND CUSTOMERS

During the Track Record Period, we had undertaken 285 projects which correspond to our customers’ projects, of which 181 projects were completed. As at the Latest Practicable Date, we had 96 on going projects.

Our customers are primarily contractors and subcontractors of various types of reinforced concrete construction projects in Hong Kong. As of December 31, 2017, we had 104 ongoing projects. Construction projects that we service can generally be categorised into public sector projects and private sector projects. Public sector projects refer to public infrastructure projects and public housing projects which are directly or indirectly funded by the Government, which considers, decides and authorizes the use of our service by contractors and sub-contractors. Private sector projects refer to those that are not public sector projects. The majority of our revenue during the Track Record Period was derived from private sector projects.

For the years ended June 30, 2016 and 2017 and the six months ended December 31, 2017, the revenue derived from our top five customers amounted to approximately 62.8%, 49.2% and 58.7%, respectively, of our total revenue.

OUR COMPETITIVE STRENGTHS

Our core strengths are set out below:

  • We provide unique mechanical splicing services using our innovative technology and self- developed machines, such as, our patented method of controlled crimping using our self- developed CNC crimping machines, and dynamic rolled threading using our self-developed CNC threading machines.
  • We use automated machines in provision of our services, enabling high production efficiency and consistent quality of services as well as minimizing human error and reducing overhead expenses.
  • We place considerable emphasis on meeting safety standards and quality control in provision of our services, in particular, the couplers that we use in our mechanical splicing services satisfy applicable Hong Kong requirements (2013 Code, 2004 Code and AC133) and our couplers have been listed on the List of Building Material (Mechanical Couplers) of the Central Data Bank of the Buildings Department as couplers accepted by and meeting the safety standards required by the Government.
  • We have established a stable business relationship with our major customers and the OEM Factory.
  • We own and use our machines in the provision of our services and do not rely on providers of equipment rental, enabling us to efficiently and effectively schedule our work and deploy our manpower.
  • We have an experienced and professional management team.
OUR STRATEGIES

Our business strategies and development directions are set out below:

  • Purchase a parcel of land for opening a new workshop in New Territories to support our long-term growth and future success;
  • Purchase additional equipment to enhance production capacity in order to capitalize on the expected growth of construction work in the near future;
  • Recruit additional experienced and skilled employees, in particular, steel fabricators, to meet our production needs;
  • Conduct research and development activities to enhance quality and cost-effectiveness of our mechanical splicing services.
  • Strengthen our marketing efforts to capture more market share in the mechanical splicing service industry in Hong Kong.