Hung Fook Tong is the top retailer of Chinese herbal products in Hong Kong1, and is principally engaged in the production and sales of a variety of herbal and non-herbal products under its reputable and award-winning ‘‘Hung Fook Tong (鴻福堂)’’ brand. Since the commencement of its operation in 1986, it has transformed from a traditional Chinese herbal tea shop to a modern wellness concept food and beverage enterprise, which has diversified its products to cover Chinese herbal drinks and other non-herbal drinks, Chinese-style soups, tortoise herbal jelly and other food products.

The innovative capability of Hung Fook Tong enables the rollout of popular products to meet evolving consumer preferences. The rich product offerings are marketed through two principal channels: Retail and Wholesale. For retail, the Group operates an extensive retail store network comprising around 110 and over 20 self-operated retail shops in Hong Kong and China, respectively. Its wholesale channels, which are primarily for sales of its long shelf-life drinks, comprise of sales to third-party retailers (such as supermarkets, convenience stores and/or grocery stores) and distributors in Hong Kong, China and overseas.

The Group manufactures its products at its own production facilities located in Hong Kong and China. Adhering firmly to its belief in the benefits of a healthy diet and natural ingredients, as reflected in its motto of ‘‘Naturally Made, Wholeheartedly Good (真心製造,自然流露)’’, the Group has adopted its ‘‘No additive (無添加)’’ approach and stringent quality control measures for its production process.

To capture the growth potential with the huge consumer market in China, the Group intends to continue its efforts in expanding its distribution networks in China to more penetrate further into the market. The Group believes its operation in China has significant growth potential to become a substantial revenue and profit contributor to the Group.

1in terms of size of retail network