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IMPORTANT

If you are in any doubt about any contents of this prospectus, you should obtain independent professional advice.

you should obtain independent professional advice. Tsun Yip Holdings Limited 進業控股有限公司

Tsun Yip Holdings Limited 進業控股有限公司

(Incorporated in the Cayman Islands with limited liability)

App1A(1)

LISTING ON THE GROWTH ENTERPRISE MARKET OF THE STOCK EXCHANGE OF HONG KONG LIMITED

BY WAY OF PLACING OF SHARES

Number of Placing Shares : 24,800,000 Shares Placing Price : HK$1.28 per Placing Share (payable in full on application plus brokerage of 1%, Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%) Nominal value : HK$0.01 per Share Stock code : 8356

Sponsor

Nominal value : HK$0.01 per Share Stock code : 8356 Sponsor Sole Bookrunner and Lead Manager
Nominal value : HK$0.01 per Share Stock code : 8356 Sponsor Sole Bookrunner and Lead Manager

Sole Bookrunner and Lead Manager

Stock code : 8356 Sponsor Sole Bookrunner and Lead Manager App1A(15)(3)(c) Third Schedule 9 App1A(15)(3)(c) Hong
Stock code : 8356 Sponsor Sole Bookrunner and Lead Manager App1A(15)(3)(c) Third Schedule 9 App1A(15)(3)(c) Hong

App1A(15)(3)(c)

Third

Schedule 9

App1A(15)(3)(c)

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities

Clearing Company Limited take no responsibility for the contents of this prospectus, make no representation as to

its

in

A copy of this prospectus, having attached thereto the documents specified in the section headed “Documents

delivered to the Registrar of Companies and available for inspection” in Appendix VI to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies Ordinance. The Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus or any other documents referred to above.

Prior to making an investment decision, prospective investors should carefully consider all the information set out

in this prospectus, including the risk factors set out in the section headed “Risk factors” in this prospectus.

Prospective investors of the Placing Shares should note that the Sponsor and the Lead Manager (for itself and on behalf of the Underwriters), acting jointly, are entitled to terminate the obligations of the Underwriters under the Underwriting Agreement, by notice in writing to the Company given by the Sponsor and the Lead Manager (for itself and on behalf of the Underwriters), upon the occurrence of any of the events set forth under the sub-paragraph headed “Grounds for termination” under the paragraph headed “Underwriting arrangements” in the section headed “Underwriting” in this prospectus at any time prior to 8:00 a.m. (Hong Kong time) on the Listing Date.

20 August 2010

accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or

reliance upon the whole or any part of the contents of this prospectus.

R14.04

S342C

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

R14.05

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

—i—

EXPECTED TIMETABLE

The Company will make an announcement on the Exchange Website if there is any change to the following expected timetable.

Commencement of Placing

2010

(Note 1)

Friday, 20 August

Announcement of the level of indication of interest in the Placing to be published on the Exchange Website on or about

Friday, 27 August

App1A(15)(3)(k)

Allotment of Placing Shares to placees on or about

Friday, 27 August

Third

 

Schedule 8

Deposit of certificates for the Placing Shares into CCASS (Note 2)

Friday, 27 August

Dealings in the Shares on GEM to commence on (Note 3)

Monday, 30 August

App1A(22)

Notes:

1.

In this prospectus, all times and dates refer to Hong Kong local times and dates.

2.

The Share certificates are expected to be issued in the name of HKSCC Nominees Limited or in the name of the placee(s) or their agent(s) as designated by the Underwriters. Share certificates for the Placing Shares to be distributed via CCASS will be deposited into CCASS on or about 27 August 2010 for credit to the respective CCASS participant’s stock accounts designated by the Underwriters, the placees or their agents, as the case may be. The Company will not issue any temporary documents of title.

App1A(15)(3)(g)

3.

All Share certificates will only become valid certificates of title when the Placing has become unconditional in all respects and the Underwriting Agreement has not been terminated in accordance with its term prior to 8:00 a.m. on the Listing Date.

Details of the structure of the Placing, including the conditions thereto, are set out in the section headed “Structure and conditions of the Placing” in this prospectus.

— ii —

CONTENTS

You should rely only on the information contained in this prospectus to make your investment decision.

The Company, the Sponsor, the Lead Manager and the Underwriters have not authorised anyone to provide you with information that is different from what is contained in this prospectus.

Any information or representation not made in this prospectus must not be relied on by you as having been authorised by the Company, the Sponsor, the Lead Manager, the Underwriters, any of their respective directors or affiliates of any of them or any other person or parties involved in the Placing.

The contents on the website at http://www.tsunyip.hk, which is the website of the Company, do not form part of this prospectus.

Page

CHARACTERISTICS OF GEM

 

i

EXPECTED TIMETABLE

 

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ii

SUMMARY

1

DEFINITIONS

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18

RISK FACTORS

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25

INFORMATION ABOUT THIS PROSPECTUS AND THE PLACING

 

34

DIRECTORS

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37

PARTIES INVOLVED

IN THE PLACING

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38

CORPORATE INFORMATION

 

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40

INDUSTRY OVERVIEW

 

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41

LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS

 

54

ENVIRONMENTAL PROTECTION LAWS AND REGULATIONS

 

68

HISTORY AND DEVELOPMENT

 

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70

— iii —

CONTENTS

BUSINESS

Page

Business overview

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76

Competitive strengths

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77

Licences/registration held by

the

Group

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80

Awards and accreditation

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81

Contracts completed and contracts in progress

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82

Operations

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89

Inventory control

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98

Quality assurance

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98

Safety policy

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99

Competition

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106

Property interests

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106

. Relationship with MHCC/MHWE

Insurance

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107

107

. Environmental matters

Litigation and claim

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112

112

Intellectual property rights

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113

CONNECTED TRANSACTIONS

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114

FUTURE PLANS AND USE OF PROCEEDS

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118

DIRECTORS, SENIOR MANAGEMENT, BOARD COMMITTEES AND STAFF

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127

CONTROLLING SHAREHOLDERS AND SUBSTANTIAL SHAREHOLDERS

 

135

SHARE CAPITAL

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144

FINANCIAL INFORMATION

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147

UNDERWRITING

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174

STRUCTURE AND CONDITIONS OF THE PLACING

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180

— iv —

CONTENTS

 

Page

APPENDICES

I Accountants’ Report

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I-1

II Unaudited pro forma financial information

 

II-1

III Property valuation

III-1

IV Summary of the constitution of the Company

 

and Cayman Islands company law

 

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IV-1

V Statutory and general information

 

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V-1

VI Documents delivered to the Registrar of Companies and available for inspection

 

VI-1

—v—

SUMMARY

This summary aims to give you an overview of the information contained in this prospectus. As it is a summary, it does not contain all the information that may be important to you. You should read the whole document before you decide to invest in the Placing Shares.

There are risks associated with any investment. Some of the particular risks in investing in the Placing Shares are set out in the section headed “Risk factors” of this prospectus. You should read that section carefully before you decide to invest in the Placing Shares.

BUSINESS OVERVIEW

The Group is principally engaged in the provision of waterworks engineering services, road works and drainage services and site formation works for the public sector in Hong Kong. Waterworks, roads and drainage works and site formation works fall within a broader engineering discipline known as civil engineering.

roads and drainage works and site formation works fall within a broader engineering discipline known as

Third

Schedule 3

During the Track Record Period, the Group generated a substantial part of its revenue from carrying out waterworks engineering services and road works and drainage services in the capacity of a subcontractor. For each of the two years ended 31 March 2009 and 2010, revenue generated from contracts in which the Group acted as a subcontractor represented approximately 73.9% and approximately 88.5% of the Group’s total revenue respectively. Revenue generated from the Group providing services in the capacity of a main contractor accounted for a lesser part of the Group’s total revenue, representing approximately 26.1% and approximately 11.5% of the Group’s total revenue during the Track Record Period.

The Group as a subcontractor

The Group, as a subcontractor, has provided waterworks engineering services and road works and drainage services to certain main contractors during the Track Record Period. In the capacity of a subcontractor, the Group had completed six contracts during the Track Record Period and had three contracts in progress as at the Latest Practicable Date.

The main contractors to which the Group provided services during the Track Record Period included MHCC/MHWE (who has been the Group’s largest customer since the year ended 31 March 2008), Kwan On Construction Company Limited, Penta-Ocean-Peako Joint Venture, Victory Trenchless Engineering Company Limited and Chit Cheung Construction Company Limited (formerly known as Ching Chit Cheung Construction Company Limited). MHCC/MHWE was the largest customer of the Group during the Track Record Period. For the year ended 31 March 2009, revenue derived from MHWE amounted to HK$2.5 million, representing approximately 2.9% of the Group’s total revenue. No revenue was derived from MHWE for the year ended 31 March 2010. For each of the years ended 31 March 2009 and 2010, revenue derived from MHCC amounted to approximately HK$57.8 million and approximately HK$131.4 million respectively, representing approximately 65.9% and approximately 88.3% of the Group’s total revenue in the respective year.

Details of the Group’s completed contracts and contracts in progress are set out in the paragraph headed “Contracts completed and contracts in progress” under the section headed “Business” in this prospectus.

—1—

SUMMARY

The Group as a main contractor

The Group, as a main contractor, has provided waterworks engineering services to WSD during the Track Record Period. In the capacity of a main contractor, the Group had completed two waterworks contracts during the Track Record Period and had two waterworks contracts in progress as at the Latest Practicable Date.

Services provided by the Group

Waterworks engineering services. These services include construction and maintenance of water mains, service reservoirs, impounding reservoirs, pumping stations, water tanks, treatment works, watercourses for distribution systems and other related construction works. These services may also involve related civil construction works which include excavation, stabilisation, foundations strengthening, reinstatement of carriageways, footways and expressways. For projects that are carried out on existing traffic roads, the contractor may also be required to make arrangements on traffic diversion and control.

Road works and drainage services. These services include construction of interchange, carriageway, walkway, footpath, access road, covered footbridge, link bridge, drainage channel and the associated lighting, drainage, landscaping, utilities diversion and electrical and mechanical works.

Site formation works. These services generally involve demolition of existing buildings and structures, excavation to the design formation level and reduction and stabilisation of existing slopes.

LICENCES AND REGISTRATION REQUIREMENTS

The Group as a subcontractor

Members of the Group are required to be registered under the Primary Register of the Registration Scheme introduced by the Provisional Construction Industry Co-ordination Board ( 臨時建造業統籌委員會 ), whose work was taken over by the Construction Industry Council ( 建造業議會 ) in February 2007, in order to act as a subcontractor for capital works contracts and maintenance contracts of the Government with tenders to be invited on or after 15 August 2004.

TYW and TY Civil were admitted to the List of Registered Subcontractors for participating in civil engineering works, road works and drainage services and waterworks under the Registration Scheme in October 2006 and November 2008 respectively.

Save for the aforesaid registration requirement, TYW and TY Civil, undertaking Government contracts as a subcontractor, are not required to comply with the licencing requirements set forth in the ETWB Handbook and not subject to the restrictions on contract value and number of contracts applicable to main contractors as described below.

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SUMMARY

The Group as a main contractor

Members of the Group are required to comply with the licencing requirements set forth in the ETWB Handbook in order to tender for Government projects in the capacity of a main contractor.

The following table summarises the details of the licences held by TYW as an approved contractor as at the Latest Practicable Date:

 

Month and year of first relevant registration

Member of

Current value of project which the Group is

with the

the Group

Status as at

eligible to

Government

Government

which held

Level/category of

the Latest

undertake

departments/

departments/

the licence/

registration held as at the

Practicable

under the

organisation

organisation

approval

Latest Practicable Date

Date

relevant licence

WBDB

May 2009

TYW

Approved Contractors for Public Works — Waterworks Category (Group B)

Confirmed

Contract value up to HK$75 million

WBDB

March 2009

TYW

Approved Contractors for Public Works — Roads and Drainage Category (Group B)

Confirmed

Contract value up to HK$75 million

WBDB

March 2009

TYW

Approved Contractors for Public Works — Site Formation Category (Group B)

Probationary Contract value up to HK$75 million

Waterworks. Being a licenced contractor with confirmed