Highlights

• A full-service restaurant group in Hong Kong
  offering Cantonese dining service and banquet service
• Providing
  one-stop wedding banquet service
• Ranked
  third amongst the Chinese full-service
  restaurant groups in the Hong Kong banquet market in 2017, with a
  market share of approximately 5.0%*[1]
• Currently operates 20 Chinese restaurants under two brand
  names, namely "Palace (??)" and "Royal Courtyard (??)"
• For the years ended 31 March 2016, 2017 and
  2018, revenue was approximately HK$596.0 million, HK$635.1 million and HK$770.1
  million, respectively, whilst net profit was approximately HK$39.9 million, HK$40.3 million and HK$53.0
  million

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Financial Highlights

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HONG KONG, CHINA -�Media OutReach�-�30 January�2019�-�Palace Banquet Holdings Limited ("Palace
Banquet", together with its subsidiaries, the "Group"; stock code: 1703),a full-service
restaurant group in Hong Kong offering Cantonese dining service and banquet service, announces the details of its
plan to list on the Main Board of The Stock Exchange for Hong Kong Limited ("SEHK") today.

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A total of 300,000,000
shares will be offered under the Share
Offer, of which 270,000,000
Shares or 90% (comprising 220,000,000 new Shares and 50,000,000 Sale Shares, subject to re-allocation and the Over-allotment Option), will be offered by
way of Placing; while the remaining 10%, or 30,000,000 Shares (subject to re-allocation) will be offered under the Public Offer. The Offer Price per Offer Share is expected to be not less than HK$0.50 and
not more than HK$0.75. The Public Offer will commence on 31 January
2019 (Thursday)
and close at 12:00 noon on
8 February 2019 (Friday).
The allotment result is expected to be announced on 14 February
2019 (Thursday). Dealings in Palace
Banquet's
shares on the Main Board of the SEHK are expected to commence on 15 February
2019 (Friday).

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Assuming an Offer Price of HK$0.625 per Offer Share (being the midpoint
of the Offer Price range), the aggregated net proceeds from the Share Offer,
after deducting related expenses, will be approximately HK$122.1 million. Palace Banquet intends to use these net proceeds for the following
purposes: 1) approximately 76.1%
for expanding its
restaurant network and geographic coverage by opening 8 new restaurants in Hong Kong by the year
ending 31 March 2021; 2) approximately 14.1% for renovation of its existing restaurants; 3) approximately 5.0% for promoting its brands and wedding banquet service; and 4)
approximately 4.8%
for additional working capital, strategic investment and other general corporate purposes.

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Shenwan
Hongyuan Capital (H.K.) Limited is the Sole Sponsor. Shenwan Hongyuan Capital
(H.K.) Limited and Opus Capital Limited are the Joint Global Coordinators. Shenwan
Hongyuan Capital (H.K.) Limited, Opus Capital Limited and Haitong International
Securities Company Limited are the Joint Bookrunners and Joint Lead Managers.
Elstone Securities Limited and Great Roc Capital Securities Limited are the
Co-Lead Managers.

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Industry Overview

According to the Frost & Sullivan Report, the banquet market in Hong Kong has
gradually recovered as the year of 2017 has double spring and leap month, which
traditional Chinese people consider good fortune. The market is estimated to
achieve a total revenue of HK$8.7 billion by 2022, representing a CAGR of
approximately 2.1% from 2017 to 2022. The
Group ranked third amongst the Chinese full-service restaurant groups in the Hong
Kong banquet market in 2017 in terms of revenue, with a market share of
approximately 5.0%.

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Wedding banquet accounts for the largest proportion in the total
banquet market. The market is forecasted to be relatively stable in the coming
few years, with higher average spending on wedding banquets. The per capita
average spending on wedding banquets is expected to reach approximately HK$175,000
in 2022, representing an increase of about 8.7% from HK$161,000 thousand in
2017.

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Business
Overview

The Group is a full-service restaurant
group in Hong Kong offering Cantonese dining service and banquet service, including
wedding banquet service. Currently, the Group operates 20 Chinese full-service
restaurants under two brand names, namely brands with the word "Palace (??)" and "Royal
Courtyard (??)".
All of its restaurants are strategically located at shopping mall, commercial
complex or on-street shops at prime locations with convenient access to public
transport, in particular railway station. The Group offers services including
wedding invitation card design, wedding cake and transportation pick-up,
subject to the wedding banquet packages selected. Its restaurants are specially
designed for hosting banquets and events, with enhanced interior features such
as 100-feet passage from the wedding stage to the middle of the banquet hall,
revolving stage, passenger-carrying-gondola, chapel mock-ups and lighting
effect.

During the Track Record Period, its
revenue was mainly generated from: (1) banquet service for events, including
weddings, birthday parties, graduation dinners, babies' hundred days
celebration, corporate annual dinners and other celebration dinners; and (2) dining
service offering Cantonese cuisine. According to the Frost & Sullivan
Report, the Group ranked third amongst the Chinese full-service restaurants in
the Hong Kong banquet market with a market share of approximately 5.0%, and
ranked seventh among the top 10 market players in the Hong Kong full-service
dining market with a market share of approximately 1.7%, in terms of revenue in
2017.

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Competitive Strengths

1)��� Providing one-stop
wedding banquet service

The Group provides wedding banquet customers with
one-stop wedding banquet services for their wedding planning and preparation
process solutions. Its restaurants are specially designed for hosting banquets
with unique theme and enhanced interior features. A wedding planning manager will
be assigned to provide service of wedding planning and assist the execution
process to its wedding banquet customers. The Group will constantly keep abreast of current
trends in wedding banquet styles to serve and attract customers requiring
one-stop wedding banquet service.

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2)��� Diversified
services and menu offerings

The Group has the capability to provide diversified
dining services to its customers, including Cantonese cuisine and other banquet
service for events such as birthday parties, graduation dinners, babies'
hundred days celebration, corporate annual dinners and other celebration dinners.
The Group can thus maintain its seat turnover rate in low season for wedding
banquet and its restaurants can be accustomed to residential districts, which
have greater demand for dining service. The Group may customise the set menus
at its customers' special request and is able to attract different customers
ranging from families, couples and companies.

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3)��� Strategic location
of its restaurants

Before opening a new restaurant, the Group will
consider a number of factors, which include, amongst others, visibility and
accessibility to customers, flow and level of pedestrian traffic and distance
to public transport. All of its existing restaurants are located at walkable
distance to railway stations. The Group strategically opened restaurants in
different districts of Hong Kong to cover a broad customer base and expand
market penetration.

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4)��� Experienced and
stable management team

The Group has a strong and experienced management
team with extensive experience in catering industry and restaurant management.
Mr. Chan Shou Ming, the Group's executive Director and the chairman of the
Board has close to 30 years of experience in the catering industry and
specialised in providing banquet services. Ms. Chen Xiao Ping, the Group's
chief executive officer and executive Director, who is responsible for building
and managing the brand image and overseeing the overall operations of the
Group, has over 20 years of experience in the catering industry.

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BUSINESS STRATEGIES

1)��� Expanding its
restaurant network and geographic coverage

The Group intends to further expand its current
restaurant network by opening 4
new restaurants by 31 March 2020 and another 4 new
restaurants by 31 March 2021, so as to increase the Group's market share and
optimise geographic coverage. It is believed that the expansion plan will: (i)
expand the Group's restaurant network into new geographical locations and thus
increase its market shares and geographic coverage; (ii) broaden its customer
base by accustoming its new restaurants to residential districts and new
locations; (iii) increase its sales and brand recognition; and (iv) enhance
cost efficiency by strengthening bargaining power with suppliers and landlords.

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2)��� Renovating its
existing restaurants to maintain competitiveness

According to the Frost & Sullivan Report,
wedding venue is one of the factors that new couples would mostly consider before
holding their weddings. Venues that are newly decorated or refurnished with
better environment and design are popular amongst new couples. The Group plans
to carry out renovations in 8 of its existing restaurants by the year ending 31
March 2020, to maintain its competitiveness, attract more customer traffic and
hence increase its revenue.

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3)��� Promoting its
brands and wedding banquet service

The Group plans to further promote its brands to
attract guest traffic and increase/maintain its market share. The Group's key
marketing strategies include: attending wedding exhibitions, traditional
advertisements and promotional activities, social media, sponsorships,
spokesperson as well as membership programme.

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About the Group

Palace Banquet Holdings Limited is
a full-service restaurant group in Hong Kong offering Cantonese dining service
and banquet service, including
one-stop wedding banquet service. Currently, the Group operates 20 Chinese
restaurants under two brand names, namely "Palace (??)" and "Royal Courtyard (??)". According to the Frost & Sullivan
Report, the Group ranked the third amongst the Chinese full-service restaurant
groups in the Hong Kong banquet market with a market share of approximately
5.0%. For the years ended 31 March 2016, 2017 and 2018, its revenue was
approximately HK$596.0 million, HK$635.1 million and HK$770.1 million,
respectively, whilst its net profit was approximately HK$39.9 million, HK$40.3
million and HK$53.0 million in the same period.