Highlights

• Thesecond largest leisure food retailer in Hong Kong* which operates chain retailstores under the brand "Best Mart 360˚" since the inception of business in 2013,with a market share of approximately 21.6%
• Offerswide collection of imported prepackaged leisure foods and other groceryproducts, principally from overseas
• Asat 19 December 2018, the Group operates 85 retail stores that are strategicallylocated in 18 districts in Hong Kong
• TheGroup sources products of around 495 brands and 1,960 stock keeping unit ("SKU")from different overseas suppliers mainly from Europe, US, Japan, Korea andSouth East Asia and importers in Hong Kong
• TheGroup had the highest retail revenue per store with approximately HK$15.4million per store for the year ended 31 March 2018 amongst the top sevenleisure food retailers*
• Samestore sales growth of approximately 1.3%, 8.8% and 14.4% for each of the year ended31 March 2017 and 2018 and the four months ended 31 July 2018 against previousyear or period
• Establishedmembership scheme with over 1 million members as at 19 December 2018
• Plansto open 76 additional stores for the four years ending 31 March 2019, 2020,2021 and 2022

FinancialHighlights

*Source:Frost and Sullivan

HONG KONG, CHINA- Media OutReach - 27 December 2018 - BestMart 360 Holdings Limited ("BestMart 360", together with its subsidiaries, the "Group"; stock code: 2360.HK), thesecond largest leisure food retailer in Hong Kong in 2017, announces thedetails of its plan to list on the Main Board of The Stock Exchange for HongKong Limited ("SEHK")today.

A total of 250,000,000shares will be offered under the Share Offer, of which 225,000,000 Shares,or 90% (subject to re-allocation), will be offered by way of Placing;while the remaining 10%, or 25,000,000 Shares (subject to re-allocation), willbe offered under the Public Offer. The Offer Price per Offer Share is expected to be notless than HK$1.0 and not more than HK$1.2. The Public Offer will commence on 28December 2018 (Friday) and close at 12:00 noon on 4 January 2019 (Friday). The allotmentresult is expected to be announced on 10 January 2019 (Thursday). Dealings in Best Mart 360's shareson the Main Board of the SEHK are expected to commence on 11 January 2019 (Friday).

Assuming an Offer Price of HK$1.1 per OfferShare (being themidpoint of the Offer Price range), the aggregated net proceeds from the ShareOffer, after deducting underwriting fees and estimated expenses payable inconnection with the Share Offer, will be approximately HK$232.7 million. BestMart 360 intendsto use these net proceeds for the following purposes: 1) approximately 66.5% for the opening of additionalretail stores; 2) approximately 13.5% for intensifying and broadening marketingefforts; 3) approximately 10.1%for upgrading information technology systems; and 4) approximately 9.9% forgeneral working capital purposes.

Lego CorporateFinance Limited is the Sole Sponsor, while Lego Securities Limited is the Sole Bookrunner.

Business Overview

The Group operates chain retail stores under the brand "Best Mart 360˚"since the inception of business in 2013, The business objective of the Group isto offer "Best Quality" and "Best Prices" products to customers throughcontinuous efforts on global procurement with a mission to provide comfortableshopping environment and pleasurable shopping experience to customers.

Majorcustomers of the Group are walk-in customers from the general public. The Groupoffers wide collection of imported prepackaged leisure foods and other groceryproducts, principally from overseas, which can be broadly categorised into 1)confectioneries; 2) packaged bakery products and snacks; 3) nuts and driedfruits; 4) grains and other miscellaneous food products; 5) beverages and wine;6) personal care products; and 7) other products, such as baby food andproducts, health food and supplements and miscellaneous household items, suchas cleaning agents, table ware and rain gear.

As at 19December 2018, the Group operates 85 retail stores that are strategicallylocated in 18 districts in Hong Kong. The Group sourced products of around 495brands and 1,960 SKUs from different overseas suppliers mainly from Europe, US,Japan, Korea and South East Asia and importers in Hong Kong.

According tothe Frost & Sullivan Report, the Group had the highest retail revenue perstore with approximately HK$15.4 million per store for the year ended 31 March2018 amongst the top seven leisure food retailers, whichoperated over 20 retail stores in Hong Kong. Besides, the Group ranked as thesecond largest leisure food retailers amongst such top seven leisure foodretailers in Hong Kong in terms of revenue of approximately HK$1,075.9 millionfor the year ended 31 March 2018, translating to a market share ofapproximately 21.6%.

The Grouprecorded revenue of approximately HK$472.8 million, HK$689.9 million and HK$1,075.9million for the three year ended 31 March 2016, 2017 and 2018, representing aCAGR of approximately 50.8%.

The Grouprecorded adjusted net profit (excluding listing expenses) of approximately HK$12.5million, HK$25.1 million and HK$58.2 million for the three year ended 31 March 2016,2017 and 2018, representing a CAGR of approximately 116.3%.

Competitive Strengths

1)    Strong Brand Recognition

Since theinception of business in 2013, the Group is characterised by its strong brandpositioning in providing overseas prepackaged leisure foods under the brand"Best Mart 360˚" which is well-recognised in the leisure food market of HongKong.

"Best Mart360˚" has obtained various awards and recognitions during the past years.Together with its marketing strategies in local television commercials,newspapers, magazines, digital marketing activities through electronic media,direct mailing promotion, members' communications and other ad hoc promotionaland sponsorship activities for television dramas, premieres and joint marketingand promotion campaigns with banks, credit card issuing institution andamusement park and shopping arcades, the Group has established, popularised andelevated its brand positioning and brand recognition in the market.

Further, theGroup's established membership scheme that keep members and potential customerspromptly informed of new products launches, thematic or special featuredproduct's promotion and other promotional offers also raises market visibilityand brand awareness of the Group. The Group believes that its well-establishedbrand positioning and strong brand recognition are valuable assets of the Group.

2)    Quality,trendy and broad appeal product mix

The Group believes that one of the key contributors to its success isthe popularity and marketability of products that successfully attract theattention of consumers and stimulate their desirability of purchase. Throughcontinuous efforts on global procurement from international groceries markets, theGroup has increased the SKUs of products from 1,764 as at 31 March 2016 to 1,960as at 19 December 2018.

In addition, the Group has successfully maintained the quality ofproducts by adopting stringent quality assurance procedures that ensurecompliance of food safety standards and regulations and thereby gainingconsumers' confidence. As the Group managed to continuously expanding and optimisingproducts portfolio to cover quality, trendy and broad appeal product mixavailable from international groceries markets at competitive prices, the Groupbelieves that it is eligible to arouse, meet and satisfy consumers' needs and expectationsin pursuing freshness and distinctiveness in groceries products at affordableprices which will in turn increase its leverage in the market and enhanceconsumer trust, confidence and loyalty that enhance long term competitiveness.

3)   Pricingpolicy and effective cost control measures which optimise and escalate the levelof profitability

The Group's management closely and regularly monitors its financialperformance and implements measures to provide well balance between profitmargins and the target sales growth. The Group implements measures with aim toimprove profit margins and sales including 1) tactical determination of retailprices for products with differentiated nature and distinctiveness that wetrust represents value-for-money and remains competitive to that of competitorsof the Group; 2) constant price adjustments on products in accordance withmarket trends and customers' responses and evolving preferences to products; 3)prices adjustments by seasonality; 4) regular launches of thematic or specialfeatured product's promotion that effectively boost up sales volume; and 5)timely promotion of slow moving inventories imperatively. Such measures workingtogether essentially maximise sales performance and operating margins of theGroup.

The Group has taken steps to effectively control operating costs such as1) tight control of rental expenses; 2) maintaining relatively low capitalexpenditure for opening new stores; 3) broadening networks to source directlyfrom overseas brand owners and manufacturers to effectively reduce procurementcosts; 4) achieving gradual realisation of the benefit of economy of scale byenlarging the scale of procurement following the increasing numbers of retailstores; and 5) continuously optimising information technology systems toincrease efficiency in inventory control and management that substantiallyminimise waste of inventories.

The Group believes that the effective pricing policy and cost controlmeasures have been key contributors to the growth in financial performance ofthe Group during the Track Record Period.

4)   Capabilityin maintaining stable collaborative relationships with existing suppliers and proactivelyand constantly identifying new suppliers

Suppliers of the Group mainly consist of brand owners, manufacturers,distributors and trading companies from Europe, the United States, Japan,Korea, South East Asia and importers in Hong Kong. In order to enrich productrange and product portfolio seamlessly, the Group has maintained stablecollaborative relationships with existing suppliers and has proactively andconstantly identified new suppliers by regularly attending internationaltradeshows, exhibitions and business missions.

Given that the Group has developed and maintained diverse suppliers'base and has thereby possessed with affluent latest products information in theinternational groceries markets, it is able to comprehend the ever-changingproduct trends swiftly and to capture the pre-emptive opportunities to source awide variety of quality, popular, trendy and distinctive leisure food productsoriginated from various overseas countries swiftly and on a continual basis.

5)   Strategicplanning in expanding the structure of target customers

In anticipation of the strong purchasing power and purchasingdesirability of tourists, especially from the PRC, the Group opened its first retailstore in July 2013 in Sheung Shui, New Territories, a district in Hong Kongthat have relatively high traffic of daily or short stay round trip PRCtourists for shopping in Hong Kong. Since then, the Group put substantialefforts in promoting sales to tourists at the initial stage of businessestablishment by opening retail stores in various populous tourists shoppinghotspots.

As the Group believes that local consumption force would enable theGroup to broaden market share in the leisure food retail market of Hong Kongand is an essential gear to diversify customer base and procuring businessgrowth, it commenced to strengthen sales to the local population from the localcommunity by opening first retail store in a shopping arcade of a communitydistrict, i.e. Tseung Kwan O in August 2014, with a view to intensify influenceover the supply chain of necessities to the local population in the local community.Since then, the Group further develop and reinforce customer base covering bothtourists and population from the local community parallelly.

6)     Strategically located retail stores and stringentmanagement of sales performance of retail stores

As at 19 December 2018, the Group operates 85 retail stores in HongKong, consisting of 31 retail stores situated at street-level, 48 retail storessituated at the shopping arcades of community districts and 6 retail storessituated at various traffic hubs.

The Group generally chooses street-level stores that are convenientlylocated in popular shopping districts and popular tourists shopping malls withhigh pedestrian flow and high visibility. For retail stores that mainly targeton sales to local population, the Group generally selects store location withreference to the population density in the community districts or residentialareas and the level of their accessibility by target customers.

In addition, the Group cautiously controls rate of returns from capitalexpenditure on opening new stores by various measures to substantiallyalleviate the risks and losses of underperforming retail stores. Besides,management of Group closely monitors the sales performance of each of retail storesand promptly takes necessary steps to improve the sales performance forindividual underperforming stores.

BUSINESSSTRATEGIES

1)    To expand business by opening additional retailstores

The Group believes that there will be promising growth potentials for itsbusiness and the Group plans to expand its retail network and intensify marketpenetration by opening additional retail stores in the forthcoming years progressively.

The Group targets to open 2, 28, 28 and 14 additional retail stores byapplying the net proceeds from the Share Offer for each of the year ending 31March 2019, 2020, 2021 and 2022 respectively. 4 additional stores are plannedto be opened with its own resources, making up a total of 76 additional retailstores.

2)    To improve procurement capabilities andcontinuously to enlarge collection of products with competitive price.

To continuously maintain the popularity and attractiveness of products, theGroup will improve its procurement capability by recruiting additionalmotivated and skilled members of purchasing team, continuously increasing exposuresto new products and new suppliers by attending additional overseas trade showsand business missions, continuously optimise pricing policy and controllingprocurement costs.

3)    Further enhance overall brand awareness bymarketing strategies and campaigns

Parallel to the proposed expansion of scale of operation, the Group willimplement marketing strategies to further enhance the overall brand awarenessof "Best Mart 360˚". The Group will continue to carry out advertising andpromotional activities and other corporate image enhancement programs tofurther strengthen brand image through various types of media. The Group willtake continuous proactive marketing approaches and efforts to utilise bothtraditional media, such as newspaper, magazines, and televisions commercials,and digital media, such as social media platforms, websites and internetplatforms, to promote its brand and products.

The Group will also continue to selectively participate in ad hocpromotional and/or sponsorship activities such as those for television dramas,premieres and joint marketing and promotion campaigns with financialinstitutions and other entertainment businesses so as to reinforce and promotebrand awareness, which will in turn increase its market shares and customers'awareness.

4)   Continueto expand member base

Given that the Group's business is to a substantial extent of customerdriven nature, and maintained membership scheme since April 2015 for promotingconsumer loyalty, stimulating sales at retail stores and further expandingcustomer base.

Directors of the Group believe that the provision of incentives andspecial promotional offers on designated products exclusively to members suchas reward points earning, various exclusive member offers and selected productredemption, also boost sales and cultivate bonding with members. The membershipscheme also allow the Group to collate purchasing information and data offrequent customers for surveying and analysing customers' purchasingpreferences, needs and habits that are significant for enriching productportfolio, determining pricing strategy for individual products and procuringbetter customer services.

The Group intends to further expand member base by offering additionalmembers' benefits in the near future and further increase communicationchannels with members.

5)    Increase warehousing and logistics capacities

In line with the Group's expansion plan on retail network, it willevaluate and monitor  warehouse utilisationand logistic arrangement from time to time and consider to expand warehousingand logistics system as and when appropriate.

6)    Further upgrade information technology systems toconstantly improve operation efficiency

While the Group is preparing to expand operation progressively, it plansto further upgrade its information technology systems to support foreseeablegrowth in business scale. For instance, the Group will optimise and/or extendthe functions of its existing POS system and WMS system for improving theaccuracy of operation data for internal analysis purpose and enhancingsystematic control and loading of documentations for facilitating efficientwarehousing and logistics. It also intends to adopt an enterprise resourceplanning system, so as to allow direct interface among various informationtechnology systems of the Group to streamline the operation process and reducehuman errors so as to cope with progressive expansion in business.

About Best Mart 360 Holdings Limited

Best Mart 360 Holdings Limited, the second largest leisure food retailerin Hong Kong, mainly operates chain retail stores under the brand "Best Mart360˚". It offers wide collection of imported prepackaged leisure foods andother grocery products, principally from overseas. The Group's businessobjective is to offer "Best Quality" and "Best Prices" products to customersthrough continuous efforts on global procurement with a mission to providecomfortable shopping environment and pleasurable shopping experience tocustomers.

As at 19 December 2018, the Group operates 85 retail stores that arestrategically located at 18 districts in Hong Kong. The Group sourced theirproducts of around 495 brands and 1,960 SKUs from different overseas suppliersmainly from Europe, US, Japan, Korea and South East Asia and importers in HongKong.