Amuse Group Holding Limited 佰悅集團控股有限公司 (incorporated in the Cayman Islands with limited liability) (Stock code: 8545) SHARE OFFER Sponsor Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers IMPORTANT Ifyouareinanydoubtaboutanyofthecontentsofthisprospectus,youshouldobtainindependentprofessionaladvice. Amuse Group Holding Limited 佰悅集團控股有限公司 (incorporatedintheCaymanIslandswithlimitedliability) LISTING ON GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED BY WAY OF SHARE OFFER Number of Offer Shares : 250,000,000 Shares Number of Placing Shares : 225,000,000 Shares (subject to reallocation) Number of Public Offer Shares : 25,000,000 Shares (subject to reallocation) Offer Price : Not more than HK$0.35 per Offer Share and expected to be not less than HK$0.25 per Offer Share (plus brokerage fee of 1%, SFC transaction levy of 0.0027% and Stock Exchange trading fee of 0.005%) (payable in full on application in Hong Kong dollar and subject to refund) Nominal value : HK$0.01 per Share Stock code : 8545 Sponsor JointGlobalCoordinators, JointBookrunnersandJointLeadManagers Co-LeadManagers HongKongExchangesandClearingLimited,TheStockExchangeofHongKongLimitedandHongKongSecuritiesClearingCompanyLimitedtake noresponsibilityforthecontentsofthisprospectus,makenorepresentationastoitsaccuracyorcompletenessandexpresslydisclaimanyliability whatsoeverforanylosshowsoeverarisingfromorinrelianceuponthewholeoranypartofthecontentsofthisprospectus. Acopyofthisprospectus,havingattachedtheretothedocumentsspecifiedinthesectionheaded“DocumentsDeliveredtotheRegistrarofCompanies andAvailableforInspection”inAppendixVIItothisprospectus,hasbeenregisteredbytheRegistrarofCompaniesinHongKongasrequiredunder section342CoftheCompanies(WindingUpandMiscellaneousProvisions)Ordinance.TheSecuritiesandFuturesCommissionandtheRegistrarof CompaniesinHongKongtakenoresponsibilityastothecontentsofthisprospectusoranyotherdocumentsreferredtoabove. TheOfferPriceisexpectedtobefixedbythePriceDeterminationAgreementbetweenourCompanyandtheJointGlobalCoordinators(forthemselves andonbehalfoftheUnderwriters)onthePriceDeterminationDate,whichisexpectedtobeonoraroundThursday,24May2018andinanyevent,no laterthan12:00noononSaturday,26May2018,orsuchlaterdateortimeasmaybeagreedbytheJointGlobalCoordinators(forthemselvesandon behalfoftheUnderwriters)andourCompany.TheOfferPricewillnotbemorethanHK$0.35perOfferShareandisexpectedtobenotlessthan HK$0.25perOfferShare.IfourCompanyandtheJointGlobalCoordinators(forthemselvesandonbehalfoftheUnderwriters)areunabletoreachan agreementontheOfferPricebythatdateortimeorsuchlaterdateortimeasagreedbyourCompanyandtheJointGlobalCoordinators(for themselvesandonbehalfoftheUnderwriters),theShareOfferwillnotbecomeunconditionalandwillnotproceed.TheJointGlobalCoordinators(for themselvesandonbehalfoftheUnderwriters)may,withtheconsentofourCompany,reducetheaboveindicativeOfferPricerangeatanytimeprior tothePriceDeterminationDate.Insuchacase,noticeofthereductionintheindicativeOfferPricerangewillbeavailableonthewebsiteoftheStock Exchangeatwww.hkexnews.hkandthewebsiteofourCompanyatamusegroupholding.com. Pursuant to the termination provisions contained in the Underwriting Agreements, the Joint Global Coordinator have the right in certain circumstances,attheirabsolutediscretion,toterminatetheobligationsoftheUnderwritersundertheUnderwritingAgreementsatanytimepriorto 8:00a.m.(HongKongtime)onthedatewhendealingsintheSharesfirstcommenceontheStockExchange(suchfirstdealingdateiscurrently expectedtobeonThursday,31May2018).Detailsofthetermsoftheterminationprovisionsaresetoutintheparagraphheaded“Underwriting— Underwritingarrangementsandexpenses—PublicOfferUnderwritingAgreement—Groundsfortermination”inthisprospectus.Itisimportant thatyourefertothatsectionforfurtherdetails. Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, includingtheriskfactorssetoutinthesectionheaded“Riskfactors”inthisprospectus. 18 May 2018 CHARACTERISTICS OF GEM GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on theStockExchange.Prospectiveinvestorsshouldbeawareofthepotentialrisksofinvestingin such companies and should make the decision to invest only after due and careful consideration. Given that the companies listed on GEM are generally small and mid-sized companies, thereisariskthatsecuritiestradedonGEMmaybemoresusceptibletohighmarketvolatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM. – i – EXPECTED TIMETABLE (Note 1) Public Offer commences and WHITE and YELLOW Application Forms available from . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Friday, 18 May 2018 Application lists for Public Offer open (Note 2) . . . . . . . . . . . . . . . 11:45 a.m. on Thursday, 24 May 2018 Latest time for lodging WHITE and YELLOW Application Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Thursday, 24 May 2018 Latest time to give electronic application instructionstoHKSCC(Note3) . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Thursday, 24 May 2018 Application lists for Public Offer close (Note 2) . . . . . . . . . . . . . . 12:00 noon on Thursday, 24 May 2018 ExpectedPriceDeterminationDateonorbefore(Note4) . . . . . . . . . Thursday, 24 May 2018 Announcement of the final Offer Price, the level of indication of interest in the Placing, the level of applications of the Public Offer, the basis of allotment and the results of applications in the Public Offer to be published in our Company’s website at amusegroupholding.com and the website of the Stock Exchange at www.hkexnews.hk on or before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 30 May 2018 Announcement of results of allocations in the Public Offer (with successful applicants’ identification document numbers, where appropriate) to be available through a variety of channels including our Company’s website at amusegroupholding.com and the website of the Stock Exchange at www.hkexnews.hk (for further details, please refer to the section headed “How to apply for Public Offer Shares — 10. Publication of results” of this prospectus) on or before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 30 May 2018 Results of allocations in the Public Offer will be available at www.tricor.com.hk/ipo/result with a “search by ID” function on . . . . . . . . . . . . . . . . . . . . . Wednesday, 30 May 2018 Despatch/collection of refund cheques in respect of wholly or partially unsuccessful applications and wholly or partially successful applications in case the final Offer Price is less than the maximum Offer Price paid for the applications pursuant tothePublicOfferonorbefore(Notes6to9) . . . . . . . . . . . . . . . . . Wednesday,30May2018 Despatch/collection of Share certificates in respect of wholly or partially successful applications pursuant to thePublicOfferonorbefore(Notes5to8and10) . . . . . . . . . . . . . . Wednesday,30May2018 Dealings in Shares on GEM expected to commence at 9:00 a.m. on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 31 May 2018 – ii – EXPECTED TIMETABLE The application for the Share Offer will commence on Friday, 18 May 2018 through Thursday, 24 May 2018, being slightly longer than normal market practice of four days. The application monies (including the brokerages, SFC transaction levies and Stock Exchange trading fees) will be held by the receiving bank on behalf of the Company and the refund monies, if any, will be returned to the applicants without interest on Wednesday, 30 May 2018. Investors should be aware that the dealings in the Shares on the Stock Exchange are expected to commence on Thursday, 31 May 2018. Notes: 1. AlltimesanddatesrefertoHongKonglocaltime,exceptasotherwisestated.Detailsofthestructureof theShareOffer,includingitsconditions,aresetoutinthesectionheaded“Structureandconditionsofthe ShareOffer”ofthisprospectus. 2. If there is a “black” rainstorm warning or a tropical cyclone warning signal number eight or above in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, 24 May 2018, the applicationlistswillnotopenonthatday.Forfurtherdetails,pleaserefertothesectionheaded“Howto applyforPublicOfferShares—9.Effectofbadweatherontheopeningoftheapplicationlists”ofthis prospectus. 3. ApplicantswhoapplyforPublicOfferSharesbygivingelectronicapplicationinstructionstoHKSCC should refer to the paragraph headed “How to apply for Public Offer Shares — 5.Applying by giving electronicapplicationinstructionstoHKSCCviaCCASS”ofthisprospectus. 4. ThePriceDeterminationDateisexpectedtobeonoraroundThursday,24May2018,andinanyevent,no laterthan12:00noononSaturday,26May2018,orsuchlaterdateortimeasmaybeagreedbytheJoint Global Coordinators (for themselves and on behalf of the Underwriters) and our Company. If, for any reason,theOfferPriceisnotagreedonorbeforeSaturday,26May2018betweenourCompanyandthe Joint Global Coordinators (for themselves and on behalf of the Underwriters), the Share Offer will not proceedandwilllapseaccordingly. 5. SharecertificatesforthePublicOfferSharesareexpectedtobeissuedonorbeforeWednesday,30May 2018butwillonlybecomevalidcertificatesoftitleat8:00a.m.onThursday,31May2018providedthat (a) the Share Offer has become unconditional in all respects; and (b) none of the Underwriting Agreementshasbeenterminatedinaccordancewithitsterms. 6. Applicants for 1,000,000 Public Offer Shares or more on WHITE Application Form(s) may collect their refund cheques (where relevant) and/or Share certificates (where relevant) personally from our Hong KongBranchShareRegistrar,TricorInvestorServicesLimited,atLevel22,HopewellCentre,183Queen’s Road East, Hong Kong from 9:00 a.m. to 1:00 p.m. on Wednesday, 30 May 2018 or any other day as announcedbyusasthedateofdespatchofSharecertificates/refundcheques. Individuals who are eligible for personal collection must not authorise any other person(s) to make collection on their behalf. Corporate applicants which opt for personal collection must attend by their authorisedrepresentative(s)bearingaletterofauthorisationfromsuchcorporation(s)stampedwiththe corporation’schop.Bothindividualsandauthorizedrepresentatives(ifapplicable)mustproduce,atthe timeofcollection,evidenceofidentityacceptabletoourHongKongBranchShareRegistrar. 7. Applicants for 1,000,000 Public Offer Shares or more on YELLOW Application Forms may collect their refund cheques, if any, in person but may not collect their Share certificates personally which will be deposited into CCASS for the credit of their designated CCASS Participants’ stock accounts or CCASS InvestorParticipants’stockaccounts,asappropriated.Theproceduresforcollectionofrefundcheques for YELLOW Application Form applicants are the same as those for WHITE Application Form applicants. – iii – EXPECTED TIMETABLE 8. Uncollected Share certificates and refund cheques (if any) will be despatched by ordinary post at the applicant’sownrisktotheaddressspecifiedintherelevantApplicationForm.Forfurtherinformation, applicants should refer to the section headed “How to apply for Public Offer Shares — 13. Despatch/collectionofsharecertificatesandrefundmonies”ofthisprospectus. 9. Refund cheques will be despatched in respect of wholly or partially unsuccessful applications and in respectofsuccessfulapplicationsifthefinalOfferPriceislessthanthemaximumOfferPriceofHK$0.35 perOfferShare. 10. Share certificates will only become valid certificates of title provided that the Share Offer has become unconditional in all respects and neither of the Underwriting Agreements has been terminated in accordancewithitsterms.InvestorswhotradeSharesonthebasisofpubliclyavailableallocationdetails priortothereceiptoftheirSharecertificatesorpriortotheSharecertificatesbecomingvalidcertificates oftitledosoentirelyattheirownrisk. In the event of any change to the above expected timetable after the date of this prospectus, an announcement will be made on the Stock Exchange’s website at www.hkexnews.hkandourCompany’swebsiteatamusegroupholding.comaccordingly. AllSharecertificateswillonlybecomevalidcertificatesoftitleoftheSharesprovidedthat the Share Offer has become unconditional in all respects and the Underwriting Agreements have not been terminated in accordance with its terms at or before 8:00 a.m. (Hong Kong time) on the Listing Date. For further details of the structure and conditions of the Share Offer, you should refer to the section headed “Structure and conditions of the Share Offer” of this prospectus. – iv – CONTENTS You should rely only on the information contained in this prospectus to make your investment decision. Our Company has not authorised anyone to provide you with information that is different from what is contained in this prospectus. Any information or representationnotcontainedormadeinthisprospectusmustnotbereliedonbyyouashaving been authorised by our Company, the Sponsor, the Joint Global Coordinators, the Joint Bookrunners,theJointLeadManagers,theCo-LeadManagers,theUnderwriters,anyoftheir respective directors, affiliates, employees or representatives or any other person or party involved in the Share Offer. Page CHARACTERISTICS OF GEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 DEFINITIONS AND GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 WAIVER FROM STRICT COMPLIANCE WITH THE GEM LISTING RULES AND EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE . . . . . 41 INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER . . . . . 44 DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER . . . . . . . . . . . . 49 CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 REGULATORY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 HISTORY, REORGANISATION AND CORPORATE STRUCTURE . . . . . . . . . . . 89 BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 DIRECTORS AND SENIOR MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS . . . . . . . . . . . . 221 – v – CONTENTS Page SUBSTANTIAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 FUTURE PLANS AND USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289 UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 STRUCTURE AND CONDITIONS OF THE SHARE OFFER . . . . . . . . . . . . . . . . . 305 HOW TO APPLY FOR PUBLIC OFFER SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 314 APPENDIX I – ACCOUNTANTS’REPORT . . . . . . . . . . . . . . . . . . . . . . . . I-1 APPENDIX II – UNAUDITED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1 APPENDIX III – PROFIT ESTIMATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1 APPENDIX IV – PROPERTY VALUATION REPORT . . . . . . . . . . . . . . . . . . IV-1 APPENDIX V – SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1 APPENDIX VI – STATUTORY AND GENERAL INFORMATION . . . . . . . VI-1 APPENDIX VII – DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION . . . . . . . . . . . . . . VII-1 – vi – SUMMARY This summary aims to give you an overview of the information contained in this prospectus. As this is a summary, it does not contain all the information that may be importanttoyou.Youshouldreadthisprospectusinitsentiretybeforeyoudecidetoinvestin the Offer Shares. Therearerisksassociatedwithanyinvestment.Someoftheparticularrisksininvesting in the Offer Shares are set out in the section headed “Risk factors” in this prospectus. You should read that section carefully before you decide to invest in the Offer Shares. Various expressions used in this summary are defined in the section headed “Definitions and glossary” in this prospectus. BUSINESS OVERVIEW We are a Hong Kong-based toy company which carries out design, marketing, distributionandretailsalesoftoysandrelatedproducts.Ourproductportfolioduringthe Track Record Period included (i) a variety of premium and general class figures based on popular third party owned ACG characters; and (ii) other related products such as pens and hair ties. Our Group’s revenue is derived from sales of (i) ODM toys produced according to our customers’ specifications and requirements; (ii) imported toys which were sourced from overseas licensees; and (iii) our own licensed toys developed by us based on license rights obtained from various licensors of US entertainment and toy brands. OurACG figures, primarily targeted at adult consumers, could generally pose in various positions and gestures with movable joints and accessories. Founded in September 2004 by our co-founder and Chairman, Mr. Li, our Group commenced to design and manufacture toys for Wing Co., Ltd. (being a member of our largest customer group, namely Customer Group A, during the Track Record Period) on ODM basis since 2005. Our online store, “D4TOYS.COM”, was set up in 2012. In the same year, we started to engage in distribution of imported toys mainly by sourcing quality ACG figures from overseas toy licensees for resale. In October 2013, we started to cooperate with licensor of a renowned US entertainment brand company (namely Licensor A) and developed our own licensed figures based on a popular US superhero ACG character. We distributed our imported toys and own licensed toys mainly through our local and overseas distributorsinthePRC,theUS,Japan,HongKong,TaiwanandSingapore.Wealsoestablished ourflagshipstore“千值殿/SEN-TI-DEN”,in Hong Kong in 2015. Sales of ODM toys Our Group provides ODM services to customers ranging from preparation of product design, mould design and development, production management for prototype, product sample and final product, and provision of fine-tuning advice on product features. As the preliminary specifications provided to us by customers are generally elementary product ideas or basic descriptions of the expected project features, our in-house and development team would assist our customers in evaluating the feasibility of such ideas and product features. Our Directors believe that our product design and development services are crucial in transforming our customers’ product concepts or ideasintodesignlayoutandprototype.Inviewof(i)themarketshareofourGroupinthe ACG figure toy ODM service market in Hong Kong; and (ii) our established relationship with Customer Group A since 2005, our Directors believe that this kind of one-stop solutions could not be easily replicated by our competitors. Distribution of imported toys During the Track Record Period, we have purchased imported toys from overseas licensees mainly based in Japan and the US. Our in-house design and development team identifiessuitabletargetofimportedtoysfromoverseaslicenseesandevaluatethemarket response in our intended territories for distribution. Based on our selection, we may discuss with licensees of the imported toys on potential distributorship arrangement. For further details, please refer to the paragraph headed “Business — Suppliers — Principal terms of engagement” in this prospectus. – 1 – SUMMARY In some cases, if so required by the licensee of toys, we would obtain license rights in respect of certain additional territories in which we intended to distribute the relevant imported toys. For further details, please refer to the paragraph headed “Business — Descriptionofbusinessoperations—II.Distributionofimportedtoys”inthisprospectus. Sales of own licensed toys Since 2013, our Group started to develop our own licensed toys based on license rightsobtainedfromvariouslicensorofUSentertainmentandtoybrands.AsattheLatest Practicable Date, we had the following licensing arrangements with our licensors: • Licensor A: the license rights to develop (i) figures based on over 100 ACG charactersfeaturinginaclassicsuperherocomicseries;and(ii)mini-toysand polygon figures (多邊形公仔) based on ACG characters featuring in various animation movie series. • Licensor B: the license rights to develop figures and other products such as pens, toy cars and key rings based on ACG characters featuring in (i) an animated television series; and (ii) a superhero-themed comic book series. • Licensor C: the license rights to develop figures based on ACG characters featuring in a robot-themed comic series. For further information of our licensors and our licensing arrangements with them, please refer to the paragraph headed “Business — Description of business operations — III. Sale of own licensed toys” in this prospectus. Brands of our own licensed toys During the Track Record Period, we have applied the “SENTINEL/千值練”, “TOPI” and “FLAME TOYS” brands in developing our own licensed toys. Our Directors are aware that Sentinel Japan has applied the “SENTINEL/千值練” brand for the development, marketing and distribution of its licensed toys in Japan. Our Directors consider that our business model is sustainable despite the common use of the “SENTINEL/千值練” brand by our Group and Sentinel Japan in development and sales of licensed products, as discussed in the paragraph headed “Business — Description of business operations — III. Sale of own licensed toys — The brands of our own licensed toys” in this prospectus. Our product category Typically, we classify both our ODM toys and imported toys into two main categories, namely (i) premium toys; and (ii) general class toys. Our premium toys principally consist of ACG figures with articular designs and largenumberofmovablejointsandcomponents,andthereforetheynormallycommanda relatively higher market selling price. Our general class toys generally comprise (i) ACG figures with limited number of moveable joints and components; and (ii) other related miscellaneousproductsassuchpensandhairties.OurDirectorsconsiderthatourgeneral class toys are targeted at mass market consumers, and therefore they normally command a more affordable market selling price. During the Track Record Period, our own licensed toys developed under the “SENTINEL/千值練” brand included (i) a figures series based on a US superhero ACG character under a previous license agreement with Licensor A ended on 31 December 2016,whichwasrenewedforatermcommencedfrom1January2017to31December2018; and (ii) a polygon figures (多邊形公仔) series based on a range of classic animation characters developed under a license agreement with Licensor A ended on 30 June 2017, which was renewed for a term commenced from 1 July 2017 to 30 June 2018. – 2 –