RM Group Holdings Limited Recorded Encouraging Subscription Results

Placing moderately over-subscribed

Placing Price set at HK$1.07 per Placing Share

HONG KONG, Oct. 10, 2013 /PRNewswire/ -- RM Group Holdings Limited ("RM", and together with its subsidiaries, the "Group"; stock code: 8185), the third largest Proprietary Chinese Medicine ("PCM") health supplements provider in Hong Kong in 2012, announced encouraging subscription results and final placing price per Placing Share ("Placing Price").

A total of 129,600,000 shares ("Placing Shares") were offered by way of placing ("Placing") and was approximately 2 times over-subscribed. The final Placing Price has been set at the upper-end of the Placing Price range at HK$1.07. Dealing in RM's shares on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited is expected to commence on 11 October 2013 (Friday). Based on the Placing Price of HK$1.07 per Placing Share, the net proceeds from the Placing (after deduction of listing related expenses) is estimated to be approximately HK$119 million.

WAG Worldsec Corporate Finance Limited is the Sole Sponsor and Lead Manager of the Placing. Great Roc Capital Securities Limited, Luen Fat Securities Company Limited and WAG Worldsec Corporate Finance Limited are the Joint Lead Underwriters. Convoy Investment Services Limited, SBI E-2 Capital Financial Services Limited, Luk Fook Securities (HK) Limited, Roctec Securities Company Limited, and Wocom Securities Limited, together with the Joint Lead Underwriters, are the Underwriters.

Mr. Chan Yan Tak, Chairman and CEO of RM, said, "We are honored that investors have shown great support in the Group. We believe the remarkable response is the market's recognition of the Group's business and confidence in our future prospects. Looking forward, we strive to capitalize on the international financing platform in Hong Kong, tap into business opportunities laid ahead and strengthen our leading position in the industry. We hope to expand our portfolio through the cooperation with CUCAMed Company Limited, a wholly owned subsidiary of the Chinese University of Hong Kong Foundation Limited, and venture into the Taiwan market, thus promote Royal Medic's brand image."

Based on a Placing Price of HK$1.07 per Placing Share, the aggregated net proceeds from the Placing (after deduction of listing related expenses) will be HK$119 million. RM intends to apply approximately 40% to fund the Group's cooperation with a university; approximately 35% to promote the Group's "Royal Medic" brand in overseas market; approximately 11% in marketing activities to promote the Group's brands in Hong Kong; approximately 5% to increase the number of Special Designated Counters ("SDCs"); and approximately 9% for general working capital and general corporate purposes.

Business Overview

Established in 2002, RM is principally engaged in the business of formulation, marketing, sales and distribution of health supplements and beauty supplements and products mainly in Hong Kong. According to the industry report prepared by Ipsos Hong Kong Limited ("Ipsos Report"), the Group ranked third as a PCM health supplements provider in Hong Kong in 2012, with a market share of 10.4% in terms of retail sales value. Its best-selling product, Royal Medic No. 1 Chinese CS-4, ranked first in terms of sales value in the Cordyceps market in Hong Kong for five consecutive years ended Aug 2013. Revenue of the Group increased from HK$158,793,000 in the year ended 31 March 2012 to HK$163,767,000 in the year ended 31 March 2013.

The Group has two segments of products: (i) health supplements and (ii) beauty supplements and products. In each segment, products are sold and distributed under the Group's propriety brands, including the "Royal Medic" brand, and private label brands developed for a renowned retail chain of health and beauty products in Hong Kong and Macau ("Distribution Facilitator"). The Group currently has a product portfolio of 74 products. The Group outsources most of its production to its suppliers and subcontracting manufacturers.

The Group engaged the Distribution Facilitator to sell and distribute its products. Its products are sold through the shelves of the Distribution Facilitator's approximately 355 stores in Hong Kong and approximately 15 stores in Macau, as well as 27 SDCs locate at selected stores. The Group has employed a team of approximately 77 well-trained promoters to station at selected stores of Distribution Facilitator and all SDCs. The promoters promote the Group's products to customers directly and receive instant feedback from customers, which provides ideas to research for new products. The Group also sells its products directly to consumers through the Hong Kong Brands and Products Expo and Wisdom Club, the Group's membership club.

About RM Group Holdings Limited

RM Group Holdings Limited is principally engaged in the business of formulation, marketing, sales and distribution of health supplements and beauty supplements and products under its propriety brand (including "Royal Medic") and private label brands owned by the Distribution Facilitator. The Group outsources most of its production to its suppliers and subcontracting manufacturers and the Group distributes its products mainly through the Distribution Facilitator. According to the Ipsos report, the Group ranked third as a PCM health supplements providers in Hong Kong in 2012. Its best-selling product, Royal Medic CS-4, ranked first in terms of sales value in the Cordyceps market in Hong Kong for five consecutive years ended August 2013.

SOURCE RM Group Holdings Limited