FUTURE PLANS AND [REDACTED]

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1 FUTURE PLANS AND FUTURE PLANS Business Objectives and Strategies Our objectives are to enhance and promote our integrated securities trading platform services and further expand our customer base by improving our existing service offerings and developing new service offerings, obtaining more market data vendor licences, spending more sales and marketing efforts and to establishing our marketing centre in Hong Kong, with an aim to consolidate and further promote our market position. To achieve such objectives, we intended to implement various business strategies. Please refer to the section headed Business Business strategies in this document for details of our business strategies. The implementation plans set forth below are based on certain bases and assumptions as set out in paragraph headed Bases and Assumptions in this section. These bases and assumptions are inherently subject to many uncertainties and unpredictable factors, in particular the risk factors as set out in the section headed Risk Factors in this document. There is no assurance that our business objectives will be achieved or our business plans will be implemented according to the estimated time frame or at all. 254

2 FUTURE PLANS AND We will endeavour to complete the following main tasks and achieve the milestone events during the period from the Latest Practicable Date to 31 March 2020 by using the as planned: From the Latest Practicable Date to 30 September 2018 Develop innovative product offerings and enhance research and development capabilities New products launch the WeChat mini programme version of the TradeGo Pro; Existing products complete the development of the English version of TradeGo Pro; complete the integration of over 40 brokerage firms onto the ios/android version of TradeGo Pro; complete the upgrade of TradeGo to version 6.0 for all brokerage firms; optimise the iteration and transaction access of newly developed Mac OS versions of TradeGo Pro; improve and optimise the online account opening appointment service to cater to the changing needs of market and to comply with regulatory requirements; propel the iteration of Microsoft Windows and Mac OS versions of our software. recruit R&D staff to enhance our R&D capabilities. 255

3 FUTURE PLANS AND Apply for additional market data vendor licences and conduct further marketing activities assist our customers in promoting ibroker to the end users; promote the Two-Factor Authentication function via advertisements and propaganda campaigns; promote the CMS Plus trading system to more brokerage firms for resource interchange; hold online and offline activities to promote TradeGo Pro; stimulate the sales of market data feeds and increase the number of registered user of TradeGo Pro; obtain relevant data licence for markets out of Hong Kong. Expand our hardware infrastructure capacities and software portfolio purchase computers and test mobile phones to enhance R&D ability and improve quality control; purchase and upgrade software for R&D and office use; enhance the conversion efficiency and transition stability from physical servers to virtual servers. Recruit non-r&d staff and conduct staff trainings recruit staff for operation, and sales and finance purpose; 256

4 FUTURE PLANS AND For the six months ending 31 March 2019 Develop innovative product offerings and enhance research and development capabilities Apply for additional market data vendor licences and conduct further marketing activities Existing products complete the integration of over 40 brokerage firms onto the ios/android version of TradeGo Pro; propel the deployment and iteration of new version of web browser securities trading platform software among the existing users of brokerage firms. obtain relevant data licence for markets out of Hong Kong; stimulate the sales of market data feeds and increase the number of registered user of TradeGo Pro. Expand our hardware infrastructure capacities and software portfolio purchase computers and test mobile phones to enhance R&D ability and improve quality control; optimise the deployment of the cross-border DDN leased lines in Hong Kong and Shenzhen; optimise the deployment and management of cloud infrastructure to improve the efficiency and stability. Recruit non-r&d staff and conduct staff trainings Establish a marketing centre in Hong Kong carry out professional and business skills trainings for all staff as well as exclusive trainings for product managers and backbone staff on yearly basis; lease an office in Central district of Hong Kong for the establishment of a Hong Kong sales and customer service centre; recruit staff for managing and operating the Hong Kong sales and customer service centre; 257

5 FUTURE PLANS AND For the six months ending 30 September 2019 Develop innovative product offerings and enhance research and development capabilities New products launch China-Hong Kong Stock Connect Data Analyst; launch the OTC transaction platform for transaction during non-trading hours; launch Trading Counter Product Existing products complete the integration of over 80 brokerage firms onto the ios/android version of TradeGo Pro; replace with new version of web browser securities trading platform software for the existing end users of brokerage firms and deploy the same to new end users of brokerage firms. recruit R&D staff to enhance our R&D capabilities Apply for additional market data vendor licences and conduct further marketing activities promote China-Hong Kong Stock Connect Data Analyst via advertisements and propaganda campaigns; promote Trading Counter Product via advertisements and propaganda campaign; promote various types of market data feeds; obtain relevant data licence for markets out of Hong Kong. Expand our hardware infrastructure capacities and software portfolio purchase computers and test mobile phones to enhance R&D ability and improve quality control; purchase and upgrade software for R&D and office use; enhance the conversion efficiency and transition stability from physical serves to virtual servers. Recruit non-r&d staff and conduct staff trainings 258

6 FUTURE PLANS AND Establish a marketing centre in Hong Kong recruit staff for managing and operating the Hong Kong sales and customer service centre; lease an office in Central district of Hong Kong for the establishment of a Hong Kong sales and customer service centre; Establish an R&D centre in the PRC purchase office premises of approximate 700- square-metre in Shenzhen for the establishment of an R&D centre. With reference to the rental of Tele-Trend Konson SZ and Shenzhen Rongyi, the estimated rental expenses for the office premises with gross floor area of 700 square metres in Nanshan District, Shenzhen City, will be approximately per year. Purchase of self-owned office premises in the same area would save us rental expenses of per year and allow us to renovate with less restriction. It is expected that the costs incurred by owning such office premises will be approximately per year. As such costs are at similar level with the expected expenses incurred by renting such property, our Directors are of the view that purchase of the office premises would not only satisfy our Company s expansion plan, but also would (i) mitigate the risks associated with the leased property in the long run, such as the expected increasing leasing fees in this area and early termination or non-renewal of the tenancy by the landlord; (ii) eliminate the costs, time and efforts associated with the possible relocation and renovation of our R&D centre; (iii) enhance our Company s ability to secure bank borrowings which generally require immovable assets, such as property, as collaterals; and (iv) secure a stable working environment for our employees so as to enhance their working efficiency and sense of belonging. As at the Latest Practicable Date, no specific property has been identified. 259

7 FUTURE PLANS AND For the six months ending 31 March 2020 Develop innovative product offerings and enhance research and development capabilities Apply for additional market data vendor licences and conduct further marketing activities Expand our hardware infrastructure capacities and software portfolio Recruit non-r&d staff and conduct staff trainings Establish a R&D centre in the PRC Establish a marketing centre in Hong Kong Existing products upgrade ibroker into its third phase; complete the integration of over 80 brokerage firms onto the ios/android version of TradeGo Pro; complete the iteration of TradeGo for brokerage firms. obtain relevant data licence for markets out of Hong Kong; promote services to private equity funds, other institutions and high-net-value individual customers; purchase computers and test mobile phones to enhance R&D ability and improve quality control; purchase and upgrade software for R&D and office use. recruit staff for operation, sales, customer service and management purpose; carry out professional and business skills trainings for all staff as well as exclusive trainings for product managers and backbone staff on yearly basis; payment for R&D centre property management fee. recruit staff for managing and operating the Hong Kong sales and customer service centre; lease an office in Central district of Hong Kong for the establishment of a Hong Kong sales and customer service centre; 260

8 FUTURE PLANS AND Bases and Assumptions Potential investors should note that our attainability of our Group s business objectives as well as our market and growth potential depends on a number of bases assumptions, in particular: there will be sufficient financial resources for us to meet the planned capital expenditure and business development requirements during the period to which our business objectives relate; there will be no material changes in the perspective of integrated securities trading platform service market in Hong Kong and China; there will be no material changes in industry trends and customer preferences due to technology advancement or otherwise that we are unable to accurately predict or address; there will be no material changes in the funding required for each of the scheduled achievements as outlined under the paragraph headed in this section; we will be able to retain our key staff in our management team as well as our professional staff and recruit suitable staff for our expansion when and if necessary; there will be no material changes in the existing laws or regulations, policies or industry or regulatory treatment relating to us, or in the political, fiscal, social, economic or market conditions in the places in which we operate or will operate; there will be no changes in the effectiveness of the licences, permits and qualifications obtained by us; there will be no material changes in the bases or rates of taxation in Hong Kong, the PRC or in any other places in which we operate or will operate; there will be no significant changes in our business relationship with our existing business partners and major customers; we will not be materially affected by the risk factors as set out in the section headed Risk Factors in this document; we will not be subject to any material or adverse effects arising from any changes to the prevailing inflation rates, interest rates or exchange rates; 261

9 FUTURE PLANS AND we will not be subject to any material or adverse effects arising from any changes to the bases or rates of taxes or customs duties of Hong Kong or any other places where our Group operates or is incorporated; and the is completed according to and as that described in the section headed Structure and Conditions of the. Reasons for the Our Directors believe that the will improve our Group s financial condition and provide our Group with additional capital to implement the future plans set out in the paragraph headed in this section. In addition, our Directors expect that the will bring the following benefits to our Group and our Shareholders: pave the way for future development by accessing the capital market; consolidate and expand the market share of our Group as a financial trading software solution supplier in Hong Kong; and raise the sense of belonging and morale of our Group s employees. Assuming an of per (being the mid-point of the stated range), we estimate that we will receive of approximately from the after deducting the (excluding any discretionary incentive fee) and other estimated expenses, if the is not exercised. We intend to use the, after deducting the (excluding any discretionary incentive fee) and other estimated expenses, for the purposes and in the amounts set out below: approximately of the, or approximately, will be used to develop innovative product offerings and enhance research and development capabilities; approximately of the, or approximately, will be used to apply for additional market data vendor licences and conduct further marketing activities; 262

10 FUTURE PLANS AND approximately of the, or approximately, will be used to expand our hardware infrastructure capacities and software portfolio; approximately of the, or approximately, will be used to recruit non-r&d staff and conduct staff trainings; approximately of the, or approximately, will be used to establish a R&D centre in the PRC, among which (i) (tax inclusive) will be used for purchase of office premises of approximately 700-square-metre to accommodate the relocated and newly recruited staff, (ii) will be used for renovation of the office premises, and (iii) will be used to pay for the property management fee (as at the Latest Practicable Date, no specific property has been identified); approximately of the, or approximately, will be used to establish a marketing centre in Hong Kong; and approximately of the, or approximately, will be used as general working capital of our Group. Assuming the is not exercised, if the is fixed at per, being the high end of the stated range, the, after deducting the (excluding any discretionary incentive fee) and other estimated expenses, will increase to approximately. In such case, our Directors intend to apply the additional in the same proportions as set out above. If the is fixed at per, being the low end of the stated range, the will decrease to approximately. In such case, our Directors intend to apply the reduced inthe same proportions as set out above. In the event that the is exercised in full, the, after deducting the (excluding any discretionary incentive fee) and other estimated expenses, will increase to approximately (assuming the is determined at the mid-point of the stated range), approximately (assuming the is determined at the high end of the stated range) or approximately (assuming the is determined at the low end of the stated range). 263

11 FUTURE PLANS AND The implementation of business strategies to achieve our business objectives from the Latest Practicable Date up to the year ending 31 March 2020 will be funded by the and we intend to allocate the as follows: From the Latest Practicable Date to 30 September March 2019 For the six months ending 30 September March 2020 Total (HK$ 000 except percentages) Develop innovative product offerings and enhance research and development capabilities Apply for additional market data vendor licences and conduct further marketing activities Expand our hardware infrastructure capacities and software portfolio Recruit non-r&d staff and conduct staff trainings Establish a R&D centre in the PRC Establish a marketing centre in Hong Kong Working capital and other general corporate purposes Total To the extent that the are not immediately used for the above purposes, we intend to deposit the into short-term demand deposits, interest-bearing bank accounts with licensed banks or financial institutions as permitted by the relevant laws and regulations, until the relevant business plans are implemented. 264