Core Viewpoint - SU Group Holdings Limited has entered into a joint development memorandum of understanding with UrbanChain Group to collaborate on integrated AIoT car parking, security, and access control solutions in Hong Kong, Macao, and Southeast Asia [1][2]. Group 1: Collaboration Details - The collaboration will focus on integrated AIoT solutions for car parking, security, and access control, leveraging EV charging to enhance demand for automated systems [2]. - The companies will design a trial to evaluate the capabilities of their integrated platforms and explore monetization opportunities, including parking, EV charging, and security [2][3]. Group 2: Technology and Expertise - UrbanChain Group will provide advanced software and hardware solutions, including vehicle recognition technology and app-based payment systems, while SU Group will contribute its expertise in security and traffic management [3]. - SU Group will also explore funding opportunities in UrbanChain Group's growth through equity, debt, or convertible financial instruments [3]. Group 3: Strategic Importance - The collaboration aims to enhance customer offerings and expand market reach, which are key components of SU Group's business strategy focused on revenue growth and shareholder value [4]. - The partnership is expected to leverage UrbanChain's technology and SU Group's engineering capabilities to deliver innovative solutions [4].

Core Points - SU Group Holdings Limited, an integrated security-related engineering services company in Hong Kong, announced that its wholly owned unit, Shine Union Limited, received a prestigious workplace quality award from The Employees Retraining Board (ERB) [1] - The ERB's Manpower Developer Award recognizes organizations that excel in manpower training and development, with over 500 organizations from more than 30 industries accredited as Manpower Developers [2][3] - The program aims to promote the importance of manpower training and development and foster strategic partnerships with organizations to enhance the quality of human resources in Hong Kong [3] Company Insights - SU Group primarily provides security-related engineering services, security guarding and screening services, and related vocational training services in Hong Kong, with over two decades of experience [5] - The company emphasizes the importance of employee training and development as a strategic decision that contributes to overall growth, improved performance, productivity, and employee retention [4] - SU Group's services include the design, supply, installation, and maintenance of various security systems for both private and public sectors, including commercial properties and public facilities [5]

HONG KONG, July 25, 2024 /PRNewswire/ -- SU Group Holdings Limited (Nasdaq: SUGP) ("SU Group" or the "Company"), an integrated security-related engineering services company in Hong Kong, today announced it was awarded a material new order at the Hong Kong International Airport (HKIA), increasing market share and position as a leading one-stop security-related services provider. The Hong Kong International Airport is recognized as one of the world's busiest airports and one of the most popular Asian hubs for ...

- 11.7% YoY Increase in Security Guarding and Screening Services Segment Revenues - Cash and Cash Equivalents Increase Nearly 200% YoY SU Group's Chief Financial Officer, Calvin Kong, noted, "We continue to execute our financial model effectively, with increased revenue from higher-margin segments driving a 4.4% increase in gross profit for the six months ending March 31, 2024, compared to the same period last year. Importantly, our cash and cash equivalents increased nearly 200%, following the successful c ...

Dividends and Financial Management - For the fiscal years ended September 30, 2022 and 2023, Shine Union declared dividends of HK$25.3 million and nil, respectively, while Fortune Jet declared dividends of HK$0.4 million and nil, totaling HK$25.7 million and nil, respectively[44]. - The Company declared dividends of HK$8.0 million and nil for the years ended September 30, 2022 and 2023, respectively, with no dividends paid to U.S. investors as of the report date[44]. - The Company does not anticipate declaring or paying any dividends in the foreseeable future, intending to retain all available funds for business operations and expansion[43]. - The Company does not expect to pay dividends in the foreseeable future, requiring investors to rely on price appreciation for returns[60]. - The company's ability to pay dividends may be restricted by potential PRC regulations affecting its Hong Kong subsidiaries, which could impact liquidity and operations[77]. - The company declared dividends of HK$25.7 million in 2022, while no dividends were declared in 2023[180]. Corporate Structure and Governance - The corporate structure includes no Variable Interest Entity (VIE) and does not intend to establish any VIE arrangements with entities in the PRC[41]. - The directors and officers collectively own 72.9% of the total voting power of the outstanding ordinary shares, which may impact corporate governance[60]. - After the IPO, directors and officers collectively own 72.9% of the total voting power of the company's outstanding ordinary shares, which could significantly influence corporate decisions[194]. - The company’s status as a controlled company may exempt it from certain corporate governance requirements, potentially affecting shareholder protections[193]. - The company is incorporated under Cayman Islands law, which may limit shareholders' ability to protect their interests and enforce judgments in U.S. courts[208]. Regulatory Environment and Compliance - The Company is subject to PRC Enterprise Income Tax Law, which may classify it as a "resident enterprise" if certain conditions are met, potentially affecting its global income tax obligations[47]. - The PRC government has initiated regulatory actions that could significantly limit the ability of companies to offer securities to investors, potentially causing the value of such securities to decline or become worthless[64]. - The company believes it is not required to obtain approval from the CSRC for its IPO, as it does not have subsidiaries or business operations in the PRC, nor does it generate revenue from PRC-based subsidiaries[64]. - The company is not subject to cybersecurity review by the CAC, as it does not possess a large amount of personal information from mainland China[64]. - The PRC government's increased oversight may negatively impact the operations and value of U.S.-listed Chinese companies, including potential probes into data protection and securities regulations[71]. - The company may face uncertainties regarding the interpretation and enforcement of PRC laws, which could limit legal protections and adversely affect business operations[66]. - The implementation of the national security law in Hong Kong could trigger sanctions or penalties from foreign governments, potentially harming the company's business[68]. - The company is subject to data protection laws in Hong Kong, and any failure to comply could materially affect its business and financial condition[73]. - The evolving legal landscape in the PRC may lead to retroactive application of new laws, creating uncertainties for foreign investors and impacting business operations[66]. - The Basic Law limits the applicability of PRC national laws in Hong Kong, with data protection and cybersecurity laws not currently applicable[79]. - There is uncertainty regarding the future applicability of PRC laws to the company's Hong Kong subsidiaries, which could pose risks to its operations[80]. - The Holding Foreign Companies Accountable Act (HFCAA) could prohibit the company's ordinary shares from being traded on U.S. exchanges if its auditor is not inspected by the PCAOB for three consecutive years[82]. - The AHFCAA amends the HFCAA to require the SEC to prohibit trading if the auditor is not subject to PCAOB inspections for two consecutive years instead of three[84]. - The company’s auditor, Marcum Asia, is registered with the PCAOB and has been regularly inspected, with the last inspection occurring in 2020[85]. - The SEC is preparing additional rules that could impact the company if its auditor is not subject to PCAOB inspection, potentially leading to delisting[88]. - The company is currently not required to obtain permission from PRC regulatory authorities to list on a U.S. exchange, but future requirements could dramatically affect its share value[91]. - The company may face increased legal and financial compliance costs due to changing laws and regulations affecting public companies[218]. Business Operations and Market Conditions - The Company operates primarily in Hong Kong and is not regulated by any authority in mainland China, but future operations or expansions may subject it to PRC government influence[60]. - The company commenced its security-related business in 1998 through its subsidiary, Shine Union, in Hong Kong[226]. - The company underwent a reorganization in 2021, incorporating SU Group under Cayman Islands law and establishing subsidiaries in the BVI[227]. - The company has a principal executive office located in Hong Kong, with its agent for service of process in the U.S. based in Delaware[226]. - The company is on the approved lists of contractors for more than 13 Hong Kong government departments, which is critical for project opportunities[112]. - The company may face significant competition in the security-related engineering services industry, which could lead to downward pricing pressures[184]. - The business operations are sensitive to local conditions in Hong Kong, including economic and political changes, which could adversely affect revenues and profitability[161]. - The company may face challenges in attracting and retaining qualified personnel, which is critical for maintaining service quality and operational efficiency[148]. - Any outbreak of communicable diseases, such as COVID-19, could severely disrupt business operations and adversely affect results[163]. - The company may incur additional costs and damages if it fails to meet contractual obligations or quality standards[158]. - Negative publicity or complaints from customers could materially affect the company's reputation and business prospects[155]. Financial Performance - For the fiscal years ended September 30, 2022 and 2023, the company's revenues were HK$136.4 million and HK$163.7 million, respectively, representing a growth of approximately 20.1%[178]. - The net income for the same periods was HK$8.3 million and HK$9.8 million, indicating an increase of about 18.1%[178]. - Total revenues increased by 20.0% from HK$136.4 million (US$17.4 million) in the fiscal year ended September 30, 2022 to HK$163.7 million (US$20.9 million) in the fiscal year ended September 30, 2023[239]. - Net income increased by 18.8% from HK$8.3 million (US$1.1 million) in the fiscal year ended September 30, 2022 to HK$9.8 million (US$1.3 million) in the fiscal year ended September 30, 2023[239]. - The company received government grants of HK$3.5 million and HK$0.6 million for the fiscal years ended September 30, 2022 and 2023, respectively, which are non-recurring in nature[166]. - As of September 30, 2022 and 2023, the total unprotected cash held in banks amounted to HK$22.9 million and HK$14.3 million, respectively[170]. - The company recorded net exchange losses of HK$96,028 in 2022 and net exchange gains of HK$0.5 million in 2023 due to foreign exchange fluctuations[176]. - Insurance costs increased from approximately HK$0.9 million in 2022 to HK$1.2 million in 2023[172]. - The company has no outstanding bank borrowings as of the date of the annual report[178]. Customer and Revenue Dependence - For the fiscal years ended September 30, 2022 and 2023, the company had 319 and 351 recurring customers, representing approximately 72.7% and 79.8% of the total number of customers, respectively[97]. - Approximately 80.9% and 81.1% of revenues from security-related engineering services were contributed by recurring customers for the fiscal years ended September 30, 2022 and 2023[97]. - The company cannot assure that it will maintain or improve relationships with recurring customers, which may impact future revenues[99]. - The company’s business strategies heavily rely on recurring customers, and any loss of business from these customers may adversely affect financial condition[97]. - Approximately 81.9% and 68.6% of revenues generated from security-related engineering services were from quotations for the fiscal years ended September 30, 2022 and 2023[101]. - 86.8% and 82.3% of the company's revenue was generated from private sector projects, while 13.2% and 17.7% was from public sector projects[187]. Operational Risks - The company faces risks related to product liability claims, which could adversely affect financial performance and reputation[109]. - The company’s operations may be impacted by fluctuations in the price of parts and components, labor costs, and other unforeseen circumstances[105]. - The company’s ability to secure new contracts is dependent on meeting tendering requirements and maintaining a competitive success rate[102]. - Subcontracting costs increased from HK$15.6 million in FY2022 to HK$32.0 million in FY2023, representing 16.0% and 27.7% of total cost of revenues respectively[116]. - Employee turnover rate for full-time employees providing security services was 57.0% in FY2022 and increased to 61.3% in FY2023[119]. - The largest supplier accounted for approximately 20.2% of total purchases in FY2022 and 15.0% in FY2023, indicating reliance on major suppliers[129]. - Any labor shortages or increases in labor costs could adversely affect business operations and profitability[120]. - The company may face penalties for manpower shortages as some tender contracts include penalty provisions[125]. - Changes in licensing requirements may necessitate additional costs to comply with new standards[115]. - Any failure in the quality assurance system could lead to a decline in service quality, jeopardizing the company's reputation and potentially resulting in significant costs[142]. - The company faces inherent risks related to work safety and may incur significant liabilities from accidents during operations[143]. Future Plans and Funding - Future business plans may be hindered by the inability to obtain additional funding for expansion[174]. - The company plans to use a significant portion of the net proceeds from the IPO for strategic acquisitions, but management has discretion over the use of these funds[200]. - The company may require additional capital and could sell additional ordinary shares or incur debt, potentially leading to dilution for existing shareholders[221]. - The company must maintain a minimum shareholders' equity of US$2,500,000 and a minimum of 300 public holders to remain listed on Nasdaq[222].