F-1/A: Grande Group Limited Files for IPO on Nasdaq Capital Market

Grande Group Limited, a Hong Kong-based financial firm, has filed for an initial public offering of 1,875,000 Class A ordinary shares on the Nasdaq Capital Market, aiming for a price between $4.00 and $6.00 per share.

Summary

• Grande Group Limited, a holding company with operations in Hong Kong through its subsidiary Grande Capital, is planning an IPO.
• The company intends to offer 1,875,000 Class A ordinary shares, representing approximately 9.55% of the Class A Ordinary Shares following completion of the Offering.
• The expected IPO price is between US$4.00 and US$6.00 per share.
• Grande has applied to list its Class A Ordinary Shares on the Nasdaq Capital Market under the symbol GRAN.
• The company has a dual-class share structure, with Class B shares having 20 votes each, concentrating voting control with Mr. Tak Kai Raymond, TAM and Ms. Yujie, CHEN.
• Grande Holding will hold 15,194,000 Class A Ordinary Shares and 5,000,000 Class B Ordinary Shares, equivalent to approximately 96.30% of the aggregate voting power after the offering.
• Grande Capital is a boutique financial firm providing corporate finance advisory services, including IPO sponsorship and related services, corporate financial advisory services, and referral services.
• For the year ended March 31, 2024, Grande had 16 clients from Hong Kong, 6 from Mainland China, and 4 from Singapore.
• The company's revenue increased from approximately US$3.9 million for the year ended March 31, 2023, to approximately US$4.5 million for the year ended March 31, 2024.
• The profit before tax increased from approximately US$1.5 million to approximately US$2.1 million in the corresponding years.
• The company intends to use the net proceeds of this Offering primarily for strengthening our corporate finance advisory business, developing our asset management business, increasing our liquid capital and general working capital and corporate purposes.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook with increasing revenue and profit, but also highlights significant risks associated with the company's structure, operations, and the regulatory environment.

Positives

• Grande Capital has a strong track record of successful IPO sponsorships.
• The company has an established client base and a strong business network across different industry sectors and geographic locations.
• Revenue and profitability have increased in recent years.
• The company intends to develop its asset management business.

Negatives

• The dual-class share structure concentrates voting control with the Controlling Shareholder.
• The company relies on dividends from its subsidiaries for cash and financing requirements.
• The company's operations are concentrated in Hong Kong, making it susceptible to market conditions there.
• The corporate finance services industry in Hong Kong is fiercely competitive.

Risks

• The PRC government may exercise significant direct oversight and discretion over the conduct of the business of our subsidiaries and may intervene or influence their operations.
• There remain some uncertainties as to whether we will be required to obtain approvals from the PRC authorities to list on a U.S. exchange and offer securities in the future, and if required, we cannot assure you that we will be able to obtain such approval.
• The Hong Kong regulatory requirement of prior approval for the transfer of shares in excess of a certain threshold may restrict future takeovers and other transactions.
• Our revenue and profitability are highly unpredictable.
• Our management team lacks experience in managing a U.S. public company.
• Our Class A Ordinary Shares may be prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors.

Future Outlook

The company intends to continue developing its corporate finance advisory business, further develop ECM services, develop its asset management business, and promote and enhance its brand locally and overseas.

Industry Context

The Hong Kong corporate finance market is expected to continue to grow, driven by well-established financial and legal systems, a high level of openness to capital flow, the adoption of financial technology, and the HKSE opening up new capital sources.

Comparison to Industry Standards

• Grande Capital ranked 10th out of 301 licensed corporations in Hong Kong for financial advisory deals from March 31, 2023 to March 31, 2024, with a market share of 3.6%.
• Comparible companies are China International Capital Corporation Hong Kong Securities, Morgan Stanley Asia, Huatai Financial Holdings (Hong Kong), China Securities (International) Corporate Finance Company, Goldman Sachs (Asia) L.L.C., J.P. Morgan Securities (Far East), Citigroup Global Markets Asia, Haitong International Capital, UBS Securities Hong Kong.

Related Party Transactions

• On June 25, 2024, Grande Capital Limited declared a cash dividend of HK$6 million (approximately US$769,231) to our Controlling Shareholder, Grande Holding Limited, for the purpose of distribution of profits obtained during the year.

Stakeholder Impact

• Shareholders may face difficulties in protecting their interests due to the company's incorporation in the BVI and the dual-class share structure.
• Employees may benefit from the company's growth strategies and potential expansion of operations.
• Customers may benefit from the company's plans to offer more comprehensive financial services.

Next Steps

• Listing of Class A Ordinary Shares on the Nasdaq Capital Market.
• Strengthening the corporate finance advisory business.
• Developing the asset management business.
• Increasing liquid capital.
• General working capital and corporate purposes.

Key Dates