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Fenbo Holdings Limited (“FHL”), incorporated on September 30, 2022, under the laws of the Cayman Islands, is the holding company of our Operating Subsidiaries, Able Industries Limited (“AIL”), Fenbo Industries Limited (“FIL”) and Fenbo Plastic Products Factory (Shenzhen) Ltd. (“FPPF”). Through our Operating Subsidiaries, we represent over 30 years of experience producing premium personal care electric appliances (principally electrical hair styling products such as straighteners, curlers, trimmers, etc.) and toys products to overseas markets.

Our operating history began in 1993 when FIL was founded in Hong Kong by Mr. Li Kin Shing as a toy manufacturer and distributor. As the toy market deteriorated, he founded AIL in 2005 in Hong Kong and shifted our operations to the manufacturing and sales of personal care electric appliances. Our manufacturing subsidiary, FPPF, located in Guangdong, PRC, was formed in the PRC in 2010 and is capable of producing over three million units per year. We currently act as both an original equipment manufacturer (“OEM”) and historically have also served as an original design manufacturer (“ODM”).

The following chart sets forth our corporate structure as of the date of this prospectus.

Our Operating Subsidiaries’ Services

AIL – As the marketing arm for the Group, AIL is responsible for all sales and marketing efforts. As of December 31, 2022, AIL employed one employee.

FIL – Is responsible for the overall management of the Operating Subsidiaries. As of December 31, 2022, FIL employed a total of 6 employees.

FPPF – Is responsible for the production of all of the Company’s products, and its engineering and design department conducts in-house design and research functions for the development of new products and product lines. As of December 31, 2022, FPPF employed a total of 277 employees.

Products – Personal Care Beauty Appliances / Hair Styling Tools

The Group’s electrical hair styling products can be divided into three sub-categories, namely,

  • (i) Curling Wands and Irons;
  • (ii) Flat Irons and Hair Straighteners; and
  • (iii) others (which mainly includes Trimmer, nail polisher, pet shampoo brush, eyebrow pliers etc.).

As an OEM electrical hair styling product manufacturer for a renowned multinational client, the Group has been focusing on the high-end segment of the personal care electrical appliance market. To this end, the Group has launched high-end professional electrical hair styling products which were once more commonly used in salons for the mass household markets (particularly in Europe and United States).

The Group offers a wide array of fashionable electrical hair styling products with different styles, features, functionalities, colors, textures, materials. It is the Group’s emphasis on the innovation of the design and styling of electrical hair styling products that appeals to the demands of different customers.

The basic components of hair styling products are casings, motors, heating elements, thermostats, power cords, and switches.

Since 2006, the Company has served as an OEM for Spectrum Brands, a global home essential company, and its sole customer, producing electrical hair styling products, under the “Remington” brand which Spectrum Brands has the right of the use of, and which are currently sold to mainly Europe, United States and Latin America.

Product type:

  • Model No.PS-200 Straightener
  • Model No.PS-100 Straightener
  • Model No.SI-001 Series Curling Iron
  • Model No.S-802 Mini Straightener
  • Model No.CI-801 Curling Iron

Research and Development
The engineering and design department of the Group has been conducting in-house design and research for the purposes of developing new product lines for the Group. From time to time, the engineering and design department of the Group innovates new product design and features around the core parameters of creativity, reliability, safety, and commercial viability. Our research and development activities also include (i) development and standardizations of production techniques and procedures; (ii) working with customer to resolve specific problems on customer’s designs and requirements; and (iii) experiment on project bases for calibration and optimization of production processes in order to achieve higher yield on production. We believe that successful research process improvement and refinement is critical to our ability to stay competitive in the industry in which we operate.

The Group’s production facilities (“SZ Factory”) are located in Bao’an District, Shenzhen City, Guangdong Province, the PRC. The SZ Factory comprises one block of four-story building consisting of approximately 11,000 sq. meters.  

Raw materials  

The principal raw materials sourced by the Group in its production which constitute the basic core components of its products include plastics, motors, power cords, switches, heating elements and thermostats.  

The Group sources plastics, motors, power cords, switches, heating elements and thermostats mainly from Hong Kong and PRC. The Group does not have long term purchase contracts with its suppliers but only purchase via orders. Management bargains purchase price by taking into account price trends of commodity and quantity volume discount.  

During the Track Record Period, certain major raw materials experienced a general upward price trend. The prices of raw materials were, to a certain extent, volatile over the period. Factors affecting the supply and prices of raw materials include fluctuation of oil price and commodity price (including metals and plastics) and the variation in global economy as a whole. The Company has business relationships with its major suppliers for over 17 years. Some of them are public companies or subsidiaries of public companies listed on Shanghai, Shenzhen or Hong Kong Stock Exchanges and the supplies and availabilities of our raw materials have never been an issue in the past. Also, all of our primary raw materials are general commercial commodities. Management believes that the Group has maintained good business relationships with its suppliers and has a stable material supply chain. Other than the Group’s existing suppliers, there are alternative sources of supply available for the raw materials which the Group requires. Therefore, even our existing suppliers may be temporarily short in inventory, alternative purchase order to other suppliers can be placed without difficulty or price premium.  

In order to ensure a stable supply of raw materials which can meet the ongoing requirements of sales and distribution, the quantity of each procurement order for raw materials is determined by the Group with reference to (i) the customers’ indicative orders prevailing from time to time; (ii) the inventory levels prevailing from time to time; and (iii) the price trend and fluctuation of raw materials as predicted by the Group. The Group also implements stock control procedures including up-to-date recording of all incoming and outgoing items into and out of warehouse and production lines. During the Track Record Period, the Group did not have any material obsolete inventory written off.  

Production Facility  

Our manufacturing facilities is operated under our WFOE named FPPF, which is equipped with different types of machines and is able to produce about three million pieces of electrical hair styling products per annum. The principal production components of the Group are injection molding machines, EDM machines, milling machines, grinding machines, lathe, spraying chambers and ovens, pad printing machines, hot stamping machines, production lines with oven, heater winding machines, bristle insertion machines, wire forming machines, wire stripping machines, lead cutting machines, spot welding machines, hot plate welding machines, crimping machines, and ultrasonic welding machines. The majority of the plant and machinery now situated in SZ Factory are owned by the Group. Safeguarding policies have been set up and maintained by the Group. There are security guards and gates at the entrance, a 24-hour surveillance system, security scanners for entrance and exit, periodic count of assets, in and out register and insurance coverage.

Marketing, Promotions and Advertising
The Group carries out its sales and distribution activities through its sales and marketing team. The Group’s sales and marketing strategy secures its overseas orders by establishing confidence and reputation in the Group’s products, assurance of quality, reasonable and competitive pricing and maintaining long-term relationship with overseas customers. In addition, the Group has participated in various exhibitions in Hong Kong, PRC and overseas to promote the Group’s products to overseas customers. Furthermore, business visit, new product presentation and briefing and video conference have been carried out by the Group to potential overseas customers.

In order to keep abreast of the market trends of electrical appliances in terms of styles, features, functionalities, colors, textures, materials and pricing, the Group’s sales and marketing department collects market data through participating in local and overseas trade exhibitions and fairs and market data and surveys provided and/or conducted by customers. In particular, Mr. Gary Chiu, the Group’s marketing consultant, has vast experience in marketing matters and strives to maintain a stable business relationship with its largest customer, Spectrum Brands, a leading global branded consumer product for more than 15 years.

The Group negotiates with its customer to determine the price each year. The prices of the Group’s products are primary determined with reference to (i) a cost-plus basis approach and (ii) the demand elasticity of a given product (which in turn is affected by (a) the product features and functionality, (b) the product life cycle and (c) consumer preferences). Our sales and marketing department is responsible to provide the quotation after considering the requirements from our customer. The actual selling prices of our products are determined by our senior management by taking into account the estimated costs of each order. In arriving at the final price, the Group also takes into account other ancillary factors such as the actual size and time frame of the order, the industry standing of the customer and the relationship with the customer. Our pricing policy is reviewed quarterly by our senior management.

With the exception of lower sales in February of each calendar year correlated with the closure of factories in the PRC during the Chinese New Year holidays, our Operating Subsidiaries’ sales are not subject to any material seasonal fluctuations and remained steady throughout the year.

Our sole customer is Spectrum Brands for whom we manufacture hair care electric appliance styling products under the Remington brand which is owned by Spectrum Brands. The Company has provided OEM services to Spectrum Brands since 2006, it does not have a formal written contract and relies on its long-term relationship to continue to provide such services in the future. For each individual transaction, the Group generally negotiates and confirms the terms of sales with its customer based on the quantity and quality of the products being ordered and enters into a purchase order with the customer. Although the Group has not entered into any long-term sales contract with Spectrum Brands, the Directors consider that the Group has good business relationship with Spectrum Brands. The Group has maintained business relationships with Spectrum Brands since 2006.

With respect to products distributed to overseas customers, the Group exports its finished products on a Free Carrier (“FCA”) basis, which means the Group is responsible for the delivery of products to a destination specified by the customers. The customer is responsible for all costs after the goods are delivered to the container terminal warehouse designated by the customer. Management estimates that the lead time from placing a purchase order by an overseas customer to the delivery of the first batch of finished product by the Group takes approximately 55 to 65 days (subject to the size and the type of the order, the location of the customer and the availability of raw materials).

The Group generally allows a credit period of 120 days for the trade receivables with terms that are common within the industry. Credit terms offered to the customer by the Group vary depending on the Group’s assessment of the reputation of the customer, the length of business relationship established with the Group and the actual size of order placed by the customer.

The industry is highly fragmented and competitive. In 2021, there were approximately 1,000 market participants principally engaged as hair styling tool OEM service providers in the PRC. However, the Group considers that Zheijang Jindelie Electrical Appliance Co. Ltd. and Hang Shun Hing Co. Ltd. are two direct competitors to the Group.