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You should carefully consider all of the information in this prospectus including the risksand uncertainties described below before making an investment in our Shares. You shouldpay particular attention to the fact that we conduct our operations in Europe, the PRC, theUnited State, Australia and other countries, the legal and regulatory environment of whichmay differ from each other. Our business, financial condition and results of operations couldbe materially adversely affected by any of these risks and uncertainties. The trading price ofour Shares could decline due to any of these risks, and you could lose all or part of yourinvestment. For more information concerning the jurisdictions where we operate ourbusiness and certain related matters discussed below, the section headed “RegulatoryOverview” in this prospectus.

RISKS RELATING TO OUR BUSINESS AND THE DENTAL PROSTHETICS INDUSTRY

We intend to grow our business in part through acquisitions in the future. If we fail tosuccessfully identify suitable targets or effectively integrate our acquired targets, our business,financial condition and results of operations could be materially and adversely affected.

Our acquisition strategy has significantly contributed to our historical growth and expansion intonew markets. Our global footprint reaches the United States, Western Europe, Australia and China asa result of our successful acquisitions. We intend to continue to accelerate our business growththrough selective acquisitions of suitable prosthetic device providers and distributors. However, ourability to consummate acquisitions is subject to a number of risks and uncertainties, including that:

Š we may be unable to identify suitable acquisition targets and reach an agreement onacceptable terms; and

Š we may fail to obtain governmental approvals and third party consents necessary toconsummate any proposed acquisition.

Even if we are able to consummate acquisitions, our ability to successfully integrate our acquiredtargets remains subject to further risks and uncertainties, including that:

Š the acquired targets may not achieve the expected synergies with our own business or wemay be unable to improve the operation efficiencies of the acquired targets in the manner wecontemplated;

Š we may be unable to effectively manage our enlarged business operations, or manage theacquired targets that may operate in new dental prosthetics markets, regulatoryenvironments or geographic regions;

Š the acquired targets may be subject to unforeseen liabilities;

Š the acquired targets may not generate the revenue and profitability we had anticipated;

Š the change in our cost structure resulting from our acquisitions of certain distributors mayincrease our selling and distribution expenses and administrative expenses, which may resultin lower net profit margin. Please refer to the section headed “Financial Information — Coststructure;” and

Š valuing the assets and liabilities of our acquired subsidiaries and determining the goodwillmay have a significant impact on our financial position. In particular, if higher values havebeen ascribed to our intangible assets, future amortization charges will be higher, which mayhave a material impact on our future financial position.

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Moreover, the process of seeking and consummating acquisitions and integrating and managingacquired businesses, whether or not they are successful, may divert our resources and managementattention from our existing businesses and impair our ability to successfully manage and grow ourbusiness organically.

We may spend significant time and expend significant resources on acquisitions that do notultimately increase our profitability. If we make acquisitions using cash from operations or borrowings,it may result in a reduction in our cash position. If we make acquisitions or investments using ourshares as consideration, our current shareholders’ ownership interests will be diluted. Any of thesefactors could materially affect our business, financial condition and results of operations.

Goodwill, customer relationships and other intangible assets comprise a substantial portion ofour total assets; if we determine our goodwill to be impaired, it would adversely affect ourbusiness, financial condition and results of operations.

Our goodwill amounted to HK$82.4 million, HK$417.7 million, HK$596.5 million and HK$872.1million as of December 31, 2012, 2013 and 2014 and June 30, 2015, respectively, accounting for13.2%, 34.9%, 36.6% and 41.7% of our total assets and 25.1%, 86.3%, 108.2% and 162.4% of ournet assets as of as of December 31, 2012, 2013 and 2014 and June 30, 2015, respectively. Ourintangible assets (other than goodwill) amounted to HK$39.7 million, HK$218.3 million, HK$267.5million and HK$363.1 million as of December 31, 2012, 2013 and 2014 and June 30, 2015,respectively, accounting for 6.4%, 18.3%, 16.4% and 17.4% of our total assets and 12.1%, 45.1%,48.5% and 67.6% of our net assets as of as of December 31, 2012, 2013 and 2014 and June 30,2015, respectively.

Our goodwill as of June 30, 2015, primarily consisted of goodwill relating to five majoracquisitions: HK$58.5 million from our acquisition of Labocast in 2011, HK$11.5 million from ouracquisition of Quantum Dental Laboratory Inc. in 2013, HK$252.9 million from our acquisition ofPermadental in 2013, HK$195.6 million of goodwill arising from our acquisition of Elysee in 2014,HK$10.9 million from our acquisition of Sundance Dental and HK$325.5 million from our acquisition ofSCDL Group. We determine whether goodwill is impaired at least on an annual basis. This requires anestimation of the value in use of the cash-generating units to which the goodwill is allocated,estimating the value in use requires us to make an estimate of the expected future cash flows fromthe cash-generating units and also to choose a suitable discount rate in order to calculate the presentvalue of those cash flows. The estimation of the expected future cash flows from the cash-generatingunits could change significantly should the cash-generating units fail to sustain the estimated growth.Please refer to Note 3 “Summary of Significant Accounting Policies — Business Combination andGoodwill”, and Note 4 “Significant Accounting Judgments and Estimates — Estimation Uncertainty —Impairment of Goodwill” to the Accountants’ Report of the Group included in Appendix IA to thisprospectus for further details of our accounting policies for goodwill and goodwill impairment, theestimations and assumptions involved therein, and the components of our acquired goodwill duringthe Track Record Period.

Customer relationships constitute a major part of our intangible assets (other than goodwill)during our Track Record Period, representing 68.9% of our intangible assets (other than goodwill) asof June 30, 2015. Customer relationships may continue to account for a substantial portion of ourintangible assets (other than goodwill) in the future. Our customer relationships were gained primarilythrough our acquisitions of certain our distributors during the Track Record Period, and are amortizedover the estimated useful lives of 5 to 10 years. However, our customer relationships may subject toimpairment if any indication that they may be impaired emerges. Please refer to Note 3 “Summary ofSignificant Accounting Policies — Intangible assets (other than goodwill)” to the Accountants’ Reportof the Group included in Appendix IA to this prospectus.

We did not recognize impairment losses in respect of goodwill or customer relationships duringthe Track Record Period. However, our estimates of the future cash flows from the cash-generating

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units may be susceptible to downward revision as result of factors adversely affecting the dentalprosthetic industry generally, including general decreases in growth rates and margins, as well asfactors specific to our business’ growth rates, margins and operating expenses. Moreover, since eachof the primary acquisitions for which we are carrying goodwill and customer relationships as ofJune 30, 2015 related primarily to the expansion of our sales and distribution network and productionfacilities, we are particularly susceptible to goodwill and customer relationships impairment resultingfrom adverse changes affecting our sales and distribution network and production facilities. Suchadverse changes could require us to record an impairment loss for all or a substantial portion of thegoodwill and/or customer relationships we are carrying. We may also suffer from significantimpairment loss even if we determine to slightly amend any assumption used in our impairmenttesting. If we record an impairment loss as a result of these or other factors, it would adversely affectour results of operations for the relevant period.

If we fail to compete effectively, our business, financial condition and results of operations willbe materially and adversely affected.

The dental prosthetics market is highly competitive and fragmented. According to Roland Berger,in the dental prosthetics markets in each of Western Europe, China, Australia and the United States,the aggregate market share held by the top three market players in terms of 2014 revenues was2.7%, 3.5%, 13.3% and 16.0%. Our ability to compete successfully depends on our capability tooffer high-quality products at competitive prices. Some of our competitors may be able to provideproducts that are of a higher quality or are more competitively priced. Some competitors may havegreater financial, research and development, manufacturing and marketing resources than we have.Furthermore, the past several years have seen a trend towards consolidation in the dental prostheticsindustry. Industry consolidation could result in greater competition if competitors combine theirresources or if competitors are acquired by other companies with greater resources. This competitioncould increase pressure on us to reduce the selling prices of our prosthetic devices, or require us toincrease our sales and marketing efforts. In addition, industry consolidation may adversely affect ourability to acquire suitable targets by reducing the availability of suitable acquisition candidates orotherwise increasing the costs of acquisition. If we are not able to compete successfully againstcurrent or potential competitors, it may have a material adverse effect on our business, financialcondition and results of operations.

If we fail to manage our growth and expansion, our business, financial condition and results ofoperations may be materially and adversely affected.

We have experienced rapid growth and a significant expansion of our operations in recent years.Our revenue increased from HK$721.9 million in 2012 to HK$777.7 million in 2013, and further toHK$1,192.2 million in 2014. We recorded revenue of HK$681.3 million for the six months endedJune 30, 2015, compared to HK$553.8 million for the six months ended June 30, 2014. In addition,we acquired controlling interests in our key distributors such as Labocast in France, Permadental andSemperdent in Germany, Elysee in the Netherlands, Belgium, Denmark and Spain and SouthernCross in Australia in recent years. We are also in the process of expanding our production capacity inthe United States and Europe. We acquired several dental laboratories such as Quantum Dental inCanada and Sundance Dental in the United States. As we continue to grow and expand our businessinto new markets, the complexity of our operations will further increase, placing greater demands onour management. Executing our business strategies could place considerable strain on ourmanagerial, operational and financial resources, and we may suffer losses during the expansion. Inparticular, the management of our growth will require:

Š strengthening of financial and management controls in an efficient and effective manner;

Š increased sales and marketing activities;

Š identifying suitable acquisition targets and potential business partners;

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Š continued enhancement of our production capacity;

Š raising adequate capital to fund our operations and acquisitions; and

Š hiring and training of new personnel.

If we are unable to effectively manage our growth and implement these business strategies, ourbusiness, financial condition and results of operations would be materially and adversely affected.

If we fail to turn our U.S. operation into a profitable and growing business, our Group’s financialcondition and results of operations may be materially and adversely affected.

The U.S. dental prosthetic industry is undergoing significant consolidation. Factors contributingto this consolidation include the aging of the workforce, the lack of available dental technicians forhire and the growing importance of scale economies. As a result, the U.S. market presents a uniqueinvestment opportunity for the Group.

Despite our fast growing market share in the United States, our operation in the United Stateswas and is still at its startup stage. Our U.S. operation suffered losses of HK$1.3 million,HK$0.3 million, HK$25.3 million and HK$9.8 million in 2012, 2013 and 2014 and the six months endedJune 30, 2015, respectively. During the Track Record Period, we made certain long-term decisionsthat impacted our profitability. For example, we focused on growing our customer base in the UnitedStates by strategic acquisition, brand building and marketing campaigns. As part of our marketingstrategy, we rebranded our company image and related marketing materials by introducing certain“made-in-USA” products, realigned our pricing to be more market competitive, and provideddiscounts on certain products to our new customers, which had a negative influence on our short-term profitability, but which we believe will benefit us in the long-run. We also developed a broadercorporate team to support our planned growth activities and manage our growing operations. Whilewe have established a state of the art digital production facility in the U.S. to serve the U.S. andCanadian markets, we are still progressing to achieve production efficiency, which also contributed tothe loss of our U.S. operation during the Track Record Period.

To improve the profitability of our U.S. operation and increase our market penetration, weacquired Sundance Dental, a dental laboratory with local production facilities, in May 2014. We havealso established eight service centers across the United States to handle general customer supportand provide technical support to the dentists. To expand our customer base, we have recruited aprofessional sales team and created a goal-oriented culture that motivates our sales personnel topromote our products and increase revenue. By integrating our local production facilities, servicecenters and sales team into our global distribution network, we are able to offer customers in the U.S.locally made products, U.S. manufactured digitally milled products and low cost, yet high qualityproducts manufactured in our centralized production facilities in China. With a growing customerbase, we believe our sales volumes will further increase and our profitability will significantly improve.

To further penetrate the U.S. market, we plan to acquire certain selected local dental laboratoriesin the U.S. to obtain immediate access to their customers. We plan to acquire a controlling interest inthose dental laboratories but retain the existing management team by letting them keep certainminority interest. We expect to use these newly acquired laboratories, in addition to additional startupservice centers, to build a nationwide sales and distribution network to promote our brandedproducts, in particular those products sourced from China, which distinguishes us from othercompetitors without global manufacturing capability. We believe our growing national network willattract more local dental laboratories to join us and create greater synergies. We expect to alsolaunch extensive marketing campaigns in the U.S., such as mail and telephone marketing, educationalseminars and programs and other avenues of local client outreach. We expect our profitability willfurther improve if we successfully execute our plans and strategies.

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However, we cannot guarantee you that we will be able to successfully implement our plans andstrategies or our plans and strategies to turn around our U.S. operation will work as expected. If wefail to improve the business and/or financial performance of our U.S. operation, we will continue tosuffer losses from our U.S. operation and our Group’s financial condition and results of operationsmay be materially and adversely affected.

Our lack of long-term purchase orders or commitments from customers increases the risk ofadverse changes in our customer relationships.

Our customers generally do not enter into framework agreements or contracts with us, but placepurchase orders for one or a limited number of products with us on an as-needed basis. Although wehave had long-term business relationships with many of our key customers, most of our customershave not provided us, and are not obligated to provide us, with any long-term purchase orders.Accordingly, we are exposed to risks from potential adverse financial effects of changes in the dentalprosthetic industry, general economy, competitive landscape, technological landscape or customerneeds or any other change that may affect the demand for our products. We cannot assure you thatour customers will continue to place orders with us in similar volumes, on the same terms, or at all.Also, we typically purchase raw materials from our suppliers based on our customers’ rollingforecasts prior to receiving their purchase orders. Therefore, any failure to accurately predict ourcustomers’ demands may result in insufficient or excess inventories of raw materials.

Our business depends on maintaining relationships with our existing customers and our abilityto effectively market to potential new customers.

Our future growth depends on our ability to continue to attract new customers as well as newpurchases from existing customers. Constantly changing consumer preferences have affected andwill continue to affect the dental prosthetic market worldwide. We rely on our marketing efforts toretain existing customers and attract new customers. Our marketing efforts primarily focus onmaintaining close relationships with dentists who perform dental prosthetics treatments in dentalclinics and hospitals. We believe that these dentists play a significant role in determining which brandof dental prosthetic devices a patient will select. However, we cannot assure you that we will be ableto continue to maintain or expand our presence among dentists, that they will continue to trust orrecommend our prosthetic devices to patients, or that patients will not request to substitute acompeting product when our product is recommended, which in turn may materially and adverselyaffect our business, financial condition and results of operations.

Any failure to maintain effective quality control over our products could have a material adverseeffect on our business and operations.

The quality of our prosthetic devices is critical to the success of our business. These factorsdepend significantly on the effectiveness of our quality control system. We have developed a rigorousquality control system that enables us to monitor each stage of the production process. Our qualitymanagement system for our centralized production facilities in Shenzhen and Beijing is certified underISO 9001:2008 and ISO 13485:2003, an international standard in quality management for medicaldevice manufacturing. However, despite our certified quality management system, we cannot fullyeliminate the risk of errors, defects or failure. We may fail to detect or cure defects as a result of anumber of factors, many of which are outside our control, including:

Š technical or mechanical malfunctions in the production process;

Š human error or malfeasance by our quality control personnel;

Š tampering by third parties; and

Š quality issues with the raw materials we procure.

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Failure to detect quality defects in our prosthetic devices could result in patient injury, customerdissatisfaction, or other problems that could seriously harm our reputation and business, expose us toliability, and adversely affect our revenues and profitability.

If we fail to keep pace with technological advances in our industry to strike an appropriatebalance between traditional craftsmanship and advanced digital production, our revenue andprofits may decrease.

Our future growth depends, in part, on our ability to enhance our existing products and developand market new products that keep pace with continuing changes in industry standards,requirements and customer preferences, such as products made with CAD/CAM technology. We mayalso face challenges from new technologies, such as chairside milling systems and 3D printing, whichcould potentially enable dentists or dental clinics to insource production of dental prosthetics to theirown clinics rather than purchasing them from an off-site laboratory. If we are not able to successfullykeep pace with technology advance in our production process, our business and results of operationsmay be materially and adversely affected.

While we pursue the development of new technologies in our production process, we still rely ontechnicians in part of our production process because the design, framework fabrication and finalcoloring are dependent on skillful craftsmanship. However, we cannot assure you that labor force indental laboratories will not be substantially replaced by advanced technologies in the future. Wecurrently maintain a large team of technicians in our centralized production facilities in China and ourproduction facilities in Madagascar. Although we monitor the market changes and customerpreferences and shift the balance between craftsmanship and CAD/CAM production accordingly, wecannot assure you that our business will remain profitable in keeping both manufacturing methods. Ifwe fail to strike an appropriate balance between traditional craftsmanship and advanced digitalproduction, our revenue and profits may decrease.

We rely on our centralized production facilities for a significant portion of our revenue, anddisruptions to the operation of our production facilities could materially and adversely affectour business, financial condition and results of operations.

A significant portion of our revenue was generated by sales of products produced at ourcentralized production facilities located in Shenzhen and Beijing, China, and Antananarivo,Madagascar. Our centralized production facilities in Shenzhen accounted for approximately 91.0%,89.2%, 86.0% and 84.9% of our production volume (as measured by cases of prostheses) for theyears ended December 31, 2012, 2013 and 2014 and the six months ended June 30, 2015,respectively. For the same periods, our Beijing production facilities accounted for approximately4.2%, 4.6%, 4.9% and 5.5% of our production volume, respectively, and our Madagascar productionfacilities accounted for approximately 4.6%, 4.8%, 4.4% and 4.2%, respectively. The continuedoperation of our centralized production facilities can be substantially interrupted due to a number offactors, many of which are outside of our control, including fire, flood, earthquakes, power outages,fuel shortages, mechanical breakdowns, terrorist attacks and wars, or other natural disasters, as wellas loss of licenses, certifications and permits, changes in governmental planning for the landunderlying these facilities and regulatory changes.

If the operation of our centralized production facilities is substantially disrupted, we may not beable to replace the equipment at such facilities, or use a different facility or a third party contractor tocontinue our production in a legal, timely and cost-effective manner or at all. Although we maintainproperty insurance for our production facilities and equipment, we do not maintain businessinterruption insurance and the amount of our insurance coverage may not be sufficient to cover ourlosses in the event of a significant disruption to any of our production facilities. As a result ofdisruption to any of our facilities, we may all fail to fulfill contract obligations or meet market demandfor our products, and our business, revenues and profitability could be adversely affected.

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Our success depends on economic and other external factors that affect patient decisionsabout whether and when to have prosthetic treatments performed.

Demand for our prosthetic devices depends mainly on patient decisions to have prosthetictreatments performed. In this respect, demand for our prosthetic devices and our business growth aresensitive to external factors that, directly or indirectly, affect patient confidence, affect levels ofdisposable consumer income, or otherwise lead patients to defer or elect not to have prosthetictreatments performed. Examples of such external factors include the timing, duration and effects ofadverse changes in overall economic conditions, including unemployment levels, inflation rates,tightening consumer credit, and increases in medical and dental costs in the markets we operate.Trends in the prosthetics industry towards managed care may also result in decreased patient accessto dental services and thereby adversely affect demand for our prosthetic devices and our sales andprofitability. The precise impact of these external factors is difficult to predict in advance, but one ormore of these factors could adversely affect our business to the extent they adversely affect patientspending on prosthetic treatments.

The changes in public healthcare schemes or the fluctuations of the dental insurance coveragein different regions could result in an adverse impact on our business performance and growthprospect.

Sales of dental devices, in particular our prosthetic devices, depend heavily on the availability ofadequate reimbursement provided under public healthcare schemes or dental insurances. Dentistsand patients generally rely on these sources to reimburse all or part of the costs and fees associatedwith the use of the prosthetic devices and implant treatments performed with these devices. Dentistsand patients may be less likely to use certain prosthetic devices if they do not receive reimbursementadequate to cover the cost of their use in dental treatments, or may be inclined to use lower priceddevices. For example, our revenue from sales to Australia decreased by HK$25.2 million, or 27.2%,from HK$92.8 million in 2012 to HK$67.6 million in 2013 primarily because the Australian governmentterminated its subsidy program for dental treatments at the end of 2012.

As healthcare costs have risen significantly over the past decade, legislators, regulators andthird-party payers may attempt to control costs by authorizing fewer elective implant and prosthetictreatments or by requiring the use of the least expensive prosthetic devices possible. Thesecost-control methods also potentially limit the amount that third-party payers may be willing to pay forprosthetic devices. The continuing efforts of third-party payers, whether governmental or commercial,to contain or reduce these costs, combined with closer scrutiny of such costs, could restrict ourend-users’ ability to obtain adequate reimbursement from these third-party payers. These costcontainment measures could harm our business by adversely affecting the demand for our productsor the price at which we can sell our products.

High labor costs and labor shortages could materially and adversely impact our operations,margins and profitability.

We rely on a significant number of technicians to support our business, and a substantial majorityof our total workforce is based in our production facilities in the PRC. For the years endedDecember 31, 2012, 2013 and 2014 and the six months ended June 30, 2015, our labor costs, amajor component of our cost of sales, amounted to approximately HK$68.3 million, HK$180.4 million,HK$302.1 million and HK$176.9 million, respectively, representing approximately 17.5%, 49.4%,54.9% and 56.4% of our total cost of sales, respectively. In recent years, average labor costs in thePRC have increased and the PRC government has implemented policies to raise the minimum wagefor workers. Our labor costs have been rising as a result of market conditions and regulatorymeasures. For example, in March 2011, December 2011, February 2013, December 2013 andFebruary 2015, the government of Shenzhen passed regulations increasing the minimum wage ofworkers by approximately 20%, 13.6%, 6.7%, 13% and 12.3% each time, effective from April 1,2011, February 1, 2012, March 1, 2013, February 1, 2014 and March 1, 2015, respectively. These new

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regulations may from time to time affect our labor costs, as a significant percentage of our workersare paid more than the minimum wage. Any significant increase in labor costs could adversely affectour margins and profitability to the extent we are not able to pass on such cost increases to ourcustomers. Unless we are able to identify and employ other appropriate means to reduce our cost ofproduction, our profit margin may decrease and our business, financial condition and results ofoperations may be materially and adversely affected.

In addition, there can be no assurance that we will be successful in retaining and recruitingsuitably qualified technicians in sufficient numbers and in time for our existing and future operations atreasonable cost, or at all. Because of the limited supply of these qualified technicians, we expendsubstantial resources maintaining in-house training programs. If we are unable to attract and retain asufficient number of trained technicians at competitive wages, our ability to perform under existingorders may be harmed, preventing us from growing our business or causing us to lose customers andrevenue.

We rely on a small number of suppliers for key raw materials such as alloys and ceramicblocks.

During the Track Record Period, we purchased raw materials such as alloys and ceramic blocksfor use in our production process. For the years ended December 31, 2012, 2013 and 2014 and thesix months ended June 30, 2015, purchases of raw materials from our five largest suppliers inaggregate were HK$64.3 million, HK$60.5 million, HK$63.0 million and HK$41.2 million, respectively,accounting for 42.9%, 48.1%, 35.7% and 42.8% of our total purchases, respectively. All of thesesuppliers are independent from us and our Directors and connected persons. We do not have long-term agreements with our suppliers. We typically place orders with our suppliers one to two weeks inadvance, and the price for each order of alloy is negotiated based on market conditions and the pricefor each order of other raw materials, such as ceramics, is based on the benchmark price we receivedannually. Prices of such raw materials may fluctuate. If our raw materials become significantly moreexpensive, we may not be able to pass on the additional costs to our customers and our profitmargins may be reduced.

Since we depend on a limited number of suppliers for raw materials, an extended shortage of keyraw materials, an increase in the costs of such raw materials, or the liquidation or failure of a keysupplier could significantly harm our results of operations. In addition, if a supplier experiences aquality issue with a raw material or we otherwise discontinue our relationship with a particularsupplier, we may experience delays or increased costs in obtaining such raw materials from acomparable supplier. Although we did not experience any significant shortages or delay in the past,we cannot assure you that we will not encounter any shortage or delay in the future.

We rely on third-party logistics providers for the delivery of our dental prosthetic devices fromour centralized production facilities in China and elsewhere to customers throughout the world.

As we provide custom-made prosthetic devices to customers across five continents, logisticsplays an important role in our production and distribution process. We rely on third-party logisticsproviders to ship impressions from dentists to us, and after we complete the prosthetic devices, werely on these logistics providers to deliver our products from China and our other production facilitiesto various end-markets. Interruptions to or failures in these third-parties’ logistics and deliveryservices could prevent the timely or proper delivery of products to our customers, which would resultin customer dissatisfaction and harm our reputation. These interruptions may be due to events thatare beyond our control or the control of these logistics providers, such as inclement weather, naturaldisasters, accidents, transportation disruptions or labor unrest. We may not be able to find alternativelogistics providers to provide logistics and delivery services in a timely and reliable manner, or at all. Ifour products are not delivered in proper condition or on a timely basis, our business, financialcondition and results of operations could be materially and adversely affected.

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Our business requires a large amount of capital to finance our ongoing operations andexpansion. Failure to manage our liquidity and cash flows or inability to obtain additionalfinancing in the future may materially and adversely affect our business, financial condition andresults of operations.

Maintaining our competitiveness and implementing our growth strategies both require us toobtain sufficient capital funds. In particular, we paid an aggregate of HK$326.3 million for acquisitionsof subsidiaries in 2013, HK$336.0 million in 2014 and HK$245.1 million in the six months endedJune 30, 2015. As of October 31, 2015, our outstanding interest-bearing borrowings were HK$610.9million as we incurred a substantial amount of long-term borrowings to finance the expansion of oursales and distribution network. As of October 31, 2015, 45.4% of our borrowings were repayablewithin one year or on demand. We may not be able to generate sufficient cash flows from ouroperations or obtain additional financing to service these obligations. Our ability to incur additionalborrowings to finance our business growth may also be materially and adversely affected.

Furthermore, we expect to raise additional funds to finance our future acquisitions and the overallexpansion of our business. Such additional financing may not be available on commerciallyreasonable terms, or at all, especially if there is a recession or other events causing volatility in thecapital markets worldwide. To the extent that we raise additional funds by issuing equity securities,our shareholders may experience substantial dilution, and to the extent we engage in debt financing,we may become subject to restrictive covenants that could limit our flexibility in conducting futurebusiness activities.

Our net current liabilities position and our planned business expansions expose us to liquidityrisks.

As of December 31, 2013, we had net current liabilities of HK$158.8 million primarily due toshort-term bank loans and other borrowings incurred in connection with our acquisition ofdistributors. As of December 31, 2014 and June 30, 2015, we recorded net current assets ofHK$202.2 million and HK$183.8 million, respectively. We believe that our current levels of cash andcash flows from operations, combined with funds available to us through financing and the netproceeds from this offering, will be sufficient to meet our anticipated cash needs for at least 12months following this offering. However, we may need additional cash resources in the future if wewish to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions.

We plan to further expand our sales and distribution network by adding service centers andacquiring market-leading distributors to increase penetration in our existing markets. We also intendto further improve our production facilities by equipping them with more CAD/CAM machines. Pleaserefer to the section headed “Business — Our Strategies” for more details of our business strategies.We have mainly relied on bank and other borrowings, equity financings and cash generated from ouroperations to fund our business expansion. Our leverage could materially and adversely affect ourliquidity. For example, it could:

Š require us to allocate a higher proportion of our cash flow to repay our borrowings, andsubsequently reduce the availability of our cash flow for operations;

Š increase our vulnerability to adverse economic or industry conditions;

Š potentially restrict us from pursuing strategic business opportunities;

Š limit our ability to incur additional debt; and

Š increase our exposure to interest rate fluctuations.

During the Track Record Period and as of the Latest Practicable Date, we had not experienced areduction or withdrawal of credit from our lenders or an inability to settle our trade payables in the

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ordinary course of business. However, we cannot assure you that we will always be able to continueto refinance our future debt when they become due, repay our debt upon maturity and/or raise thenecessary funding to finance our current liabilities and our capital commitments.

Our business depends heavily on our reputation and customer perception of our brands, andany negative publicity or other harm to our brand or failure to maintain and enhance our brandrecognition may materially and adversely affect our business, financial condition and results ofoperations.

Our reputation and customer perception of our brands are critical to our business. We believethat our “YZJ” is well recognized among Chinese hospitals while our “Modern Dental Laboratory”,“Permadental”, “Elysee”, “Labocast”, “Modern Dental USA” and “Southern Cross” are wellestablished brands in their respective markets. Maintaining and enhancing our reputation and brandrecognition depends primarily on the quality and consistency of our products and services, as well asthe success of our brand promotion efforts. In particular, there has been a historical perception insome developed markets that dental prosthetic devices manufactured in Asia are of an inferior qualityto those manufactured in developed markets. We have expended considerable efforts promoting ourbrands and the quality of our products, and we expect to continue to do so. Our brand promotionefforts may be expensive and may fail to effectively promote our brands or generate additional sales.

In addition, our reputation and customer perception of our brands could be harmed if, forexample:

Š our products fail to gain acceptance by patients, dentists and hospitals;

Š our products contain defects or malfunction;

Š lawsuits or regulatory investigations are instituted against us or otherwise relating to ourproducts or industry;

Š we provide poor or ineffective customer service; or

Š we are subject to product liability claims.

If we are unable to maintain and further enhance our reputation and brand recognition, our abilityto attract and retain customers may be impeded and our business prospects may be materially andadversely affected.

If we experience delays in collecting trade receivables from our customers, it could adverselyaffect our cash flow.

We generally grant our customers credit terms between 30 and 90 days. As of December 31,2012, 2013 and 2014 and June 30, 2015, our trade receivables were HK$182.7 million,HK$210.2 million, HK$252.6 million and HK$292.2 million, respectively, among which, HK$73.8million, HK$69.2 million, HK$107.1 million and HK$106.1 million were overdue. The average turnoverdays of our trade receivables for the same periods were 87 days, 92 days, 71 days and 72 days,respectively. Although we did not record any bad debt for the years ended December 31, 2012, 2013and 2014 and the six months ended June 30, 2015, we cannot assure you that we will not incur anybad debt in the future. If our customers’ cash flow, working capital, financial condition or results ofoperations deteriorate, they may be unable, or they may otherwise be unwilling, to pay tradereceivables owed to us promptly or at all. Any substantial defaults or delays could materially andadversely affect our cash flow, and we could be required to terminate our relationships withcustomers in a manner that decreases the sales of our prosthetic devices.

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Failure to adequately protect our intellectual property rights or to defend third party intellectualproperty infringement claims may have adverse effect upon our reputation and disrupt ourbusiness and operations.

We have registered a number of trademarks in various jurisdictions, such as the “Labocast” logoin Europe, the “Southern Cross Dental” logo in Australia and “YZJ” in China. We believe suchtrademarks are widely recognized and have considerable value. As of the Latest Practicable Date, wehad nine pending trademark applications in various jurisdictions, including the “Permadental &Semperdent” logo in Europe, the “Andent” logo in Australia, the “Modern Dental USA” logo in theUnited States and the “digitekdental” logo in Hong Kong. There is no guarantee that our trademarkapplications will be successful, and there can be no assurance that those pending trademarksapplications, or any additional applications that we may choose to make, will be approved and/or thatthe right to the use of any such trademarks outside of their respective current areas of usage will notbe claimed by others. There are also certain brand names under which we conduct our business,such as “Sundance Dental” in the United States and “Quantum Dental” in Canada, but the trademarksand logos associated with such brand names have not been registered or applied to be registered inthe relevant jurisdictions as we believe our operations under such brand names are relatively smalland the risk of third party infringement is minimum. However, without effective registration, theprotection for such brand names and relevant trademarks and logos is very limited. We cannot assureyou that we will be able to effectively protect our intellectual properties, such as our trade names,brands, trademarks, domain names. Litigation may be necessary to enforce our intellectual propertyrights and the outcome of any such litigation may not be in our favor. There is no guarantee that wewould be able to halt the unauthorized use of our intellectual property through litigation in a timelymanner or at all. Furthermore, any such litigation may be costly and may divert management attentionaway from our business and cause us to expend significant resources. An adverse determination inany such litigation will impair our intellectual property rights and may harm our business, prospectsand reputation.

We are not aware of any actions or proceedings against us relating to any intellectual propertieswe use in our business, nor have we received any notice or claim or infringement in respect of anysuch intellectual properties. However, we cannot be certain that our operations or any aspects of ourbusiness do not or will not infringe upon or otherwise violate any intellectual property rights held bythird parties. If we are found to have violated the intellectual property rights of others, we may besubject to liability for our infringement or may be prohibited from continuing to use such intellectualproperty. In addition, we may incur significant expenses, and may be forced to divert management’stime and other resources from our business and operations to defend against third-party infringementclaims, regardless of their merits.

We may become subject to product liability claims that could adversely affect our operation,revenues and profitability.

We are exposed to risks associated with product liability claims as a result of developing,producing, marketing and selling prosthetic devices in the PRC and other jurisdictions where ourprosthetic devices are marketed and sold. Such claims may arise if any of our products are deemedor proven to be unsafe, ineffective, defective or contaminated. There can be no assurances that wewill not become subject to product liabilities claims or that we will be able to successful defendourselves against any such claims. If we are unable to defend ourselves against such claims, we maybe subject to civil liability for physical injury, death or other losses caused by our products and, insome jurisdictions, to criminal liability and the revocation of our business licenses if our products arefound to be defective. We do not maintain any product liability insurance to cover damages that mayarise from product liability claims. Even if we are able to successfully defend ourselves against anysuch product liability claims, doing so may require significant financial resources and the time andattention of our management.

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We may not be able to achieve continued growth and/or may incur additional cost if we fail towin the bid for the land under our Long Term Development Plan or if the construction of ournew facilities under our Long Term Development Plan fails to complete on time.

We have adopted the Long Term Development Plan to better equip us to capitalize on theanticipated growth of the Chinese dental prosthetic market. In accordance with the Long TermDevelopment Plan, we agreed to invest no less than RMB246.0 million to acquire certain land inDongguan Songshan Lake High-tech Industrial Development Zone and to construct new productionfacilities to relocate our Shenzhen Facilities therefore boost up our production capacity in the future.For details, please refer to the section headed “Business — Our Production Processes andFacilities — Long Term Development Plan.”

However, our acquisition of the underlying land is subject to our successful bid in a public tenderprocess, which is expected to be completed in the first quarter of 2016. If there is any other bidderwho outbids us or we fail to acquire the lands for any other reasons, we might not be able toimplement our Long Term Development Plan in line with our scheduled time frame, if at all. We mighthave to look for other suitable and available sites, which process may be costly and may divertmanagement’s attention away from our business.

Even if we are able to acquire the underlying land, failure to obtain construction permit, delays bythe construction contractors, budget overrun or other incidents may nevertheless delay theconstruction of the new facilities. If we were not able to complete the construction of our new facilitiesor implement the Long Term Development Plan on time, we might not be able to increase ourproduction capacity to accommodate the increasing orders from our customers, which may have anadverse impact on our customer relationship and may even lead to market share loss.

After completion of the construction, the new facilities constructed under our Long TermDevelopment Plan will subject to depreciation on a straight-line basis over their estimated useful lives.Based on the estimated construction and renovation costs, we expect the annual depreciation of ournew facilities to be HK$0.4 million in 2015, HK$0.9 million in 2016, HK$0.9 million in 2017, HK$6.6million in 2018, HK$12.3 million in 2019 and HK$18.1 million in 2020, which may be significant to usand may have material adverse impact on our financial performance.

There are risks associated with the land on which our centralized production facilities arelocated in Shenzhen, and we would face relocation costs and disruption to our business if wewere required to find alternative premises prior to implementation of the Long TermDevelopment Plan.

The lessors of our Shenzhen Facilities do not hold the land use rights and building ownershipcertificate for the relevant properties and they failed to prove that they have the right to lease thoseproperties. Our Shenzhen Facilities account for approximately 60.5% of our total production area asof June 30, 2015, and 91.0%, 89.2%, 86.0% and 84.9% of our production volume for the yearsended December 31, 2012, 2013 and 2014 and the six months ended June 30, 2015, respectively.

Our PRC legal advisors, Jingtian & Gongcheng, have advised us that, (i) if there is any disputeover the ownership of the Shenzhen Facilities, we may not be able to operate normally in theShenzhen Facilities; and (ii) given the Shenzhen Facilities were constructed without constructionplanning permits ( ), the Land and Planning Administration ( ) may requireus to relocate our operation from the Shenzhen Facilities.

As such, our ability to use the Shenzhen Facilities could be materially affected due to the defectin title ownership and our business operation may be adversely and materially affected, and mayresult in significant disruptions to our production lines and a corresponding loss of profits. We mayalso incur additional costs in prematurely relocating our production facilities.

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Please see the section headed “Business — Our Production Processes and Facilities — PropertyTitle Defects with respect to our production facilities” in this prospectus for a further discussion of theShenzhen Facilities.

If we fail to retain and attract key personnel, our operations could be adversely affected.

Our success depends to a significant extent on the continued services of our key personnel,including Mr. Ngai Shing Kin, our co-founder and our chief executive officer, Mr. Ngai Chi Ho Alwin,our chief operating officer, and other key officers and senior technicians, as well as on our ability tocontinue to attract, retain and motivate such personnel. The loss of the services of any of these keypersonnel without adequate and timely replacement and our inability to recruit additional keypersonnel as our business expands could limit our competitiveness and/or our growth, interrupt ourproduction processes, reduce our manufacturing quality and cause customer dissatisfaction, all ofwhich could reduce our profitability. We do not maintain “key man” insurance with respect to any ofour Directors, officers or other key personnel.

If we or our employees or distributors fail to comply with anti-corruption laws it could result inpenalties and could harm our reputation and subsequently have a material adverse effect onour business, financial condition and results of operations.

We operate in the dental prosthetics industry and we sell our products to dentists, dental clinicsand hospitals. We are subject to anti-corruption laws in the countries in which we sell our products.These anti-corruption laws generally prohibit companies and their intermediaries from makingimproper payments or benefits to public officials, doctors, hospital personnel or other decision-makers for the purpose of obtaining or keeping business. We have implemented policies andprocedures designed to ensure that we, our employees, distributors and other intermediaries complywith applicable anti-corruption laws. These measures include organizing internal training programs,implementing internal policy governing our employees, and discussing any reported suspiciousincidents at the board meetings. In addition, we recently adopted a comprehensive anti-bribery policyand code of conduct for our employees to further improve our anti-bribery practice. We cannot assureyou, however, that our employees, distributors and other intermediaries will observe our policies andprocedures at all times. If we are not in compliance with anti-corruption laws, we may be subject tocriminal and civil penalties and other remedial measures, which could damage our reputation andhave a material adverse impact on our business, financial condition and results of operations.

Our business may be subject to seasonal effects, and a disruption in dental activities during ourbusy seasons could adversely affect our business, financial condition and results of operations.

Our business generally experiences some effects of seasonal variations due to increasingdemand during certain times of the year such as before Christmas and New Year, and before ChineseLunar New Year holidays. During these times, people tend to undergo prosthetic treatments in orderto have better dental appearances before they reunite with family members on holidays. In addition,as public healthcare schemes in certain countries provide people with a fixed-amount reimbursementfor prosthetics every year, people tend to finish their prosthetic treatments and make reimbursementclaims before the calendar year ends, which increases the demand for our prosthetic devices at thetime before New Year. The seasonality changes may cause fluctuations in our financial results andany occurrence that disrupts our product supply during our busy seasons could have adisproportionately material adverse effect on our business, financial condition and results ofoperations.

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We rely on our information technology systems for our sales and other functions, and if ourinformation technology systems fail to adequately perform these functions, or if we experiencean interruption in their operation, our business and results of operations could be adverselyaffected.

The efficient operation of our business depends on our information technology systems. We relyon our information technology systems to effectively manage accounting and financial functions,order entry, order fulfillment and inventory replenishment processes, and to maintain our customerinformation. The failure of our information technology systems to perform as we anticipate coulddisrupt our production and sales and could result in decreased revenue and increased overheadcosts. In addition, our information technology systems are vulnerable to damage or interruption from:

Š earthquake, fire, flood and other natural disasters;

Š attacks by computer viruses or hackers;

Š power loss; and

Š computer systems, Internet, telecommunication or data network failure.

Any such interruption could materially and adversely affect our business, financial condition andresults of operations.

Our operation and prospects may be adversely affected by natural disasters, epidemics,terrorist attacks and political unrest.

As we expand our operations worldwide, our business is subject to general economic and socialconditions around the world. Natural disasters, epidemics, acts of God, terrorist attacks and politicalunrest which are beyond our control may adversely affect the economy, infrastructure and livelihoodof the people. Some locations, including in certain instances where we operate, are under the threatof floods, typhoons, earthquakes, sandstorms, snowstorms, fires, droughts, or epidemics such asMiddle East Respiratory Syndrome (MERS), Ebola, Severe Acute Respiratory Syndrome (SARS),H5N1 avian flu, human swine flu (Influenza A or H1N1) and H5N1 avian flu.

Past occurrences of epidemics and natural disasters, depending on their scale, have causeddifferent degrees of damage to the international and local economies. A recurrence of SARS or anoutbreak of any other epidemics, a natural disaster or a terrorist attack, especially in the cities wherewe have operations, may result in material disruptions to our supply chain, production facilities andthe transportation infrastructure on which we rely or may require that we make additional capitalexpenditure. In the event of political unrest, we may suffer direct consequences such as changes tolaws and regulations, as well as indirect consequences such as decreased confidence of foreign firmsand investors in investing in our Group. The occurrence of a natural disaster, act of God, epidemic,terrorist attack or political unrest may adversely affect our business, financial condition and results ofoperations.

Any financial or economic crisis, or perceived threat of such a crisis, including a significantdecrease in consumer confidence, may materially and adversely affect our business, financialcondition and results of operations.

The global financial markets experienced significant disruptions in 2008 and the United States,European and other economies went into recession. The recovery from the lows of 2008 and 2009was uneven and the global financial markets are facing new challenges, including the escalation of theEuropean sovereign debt crisis since 2011, the hostilities in the Ukraine, the end of quantitative easingby the U.S. Federal Reserve and the economic slowdown in the Eurozone in 2014. It is unclearwhether these challenges will be contained and what effects they each may have. There is

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considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policiesthat have been adopted by the central banks and financial authorities of some of the world’s leadingeconomies where we operate our businesses. To the extent any fluctuations in the global economysignificantly affect consumers’ demand for our products or change their spending habits, our resultsof operations may be materially and adversely affected.

RISKS RELATING TO DOING BUSINESS IN OVERSEAS MARKETS AND THE PRC

We are subject to extensive and pervasive regulation around the world.

Our business is subject to extensive regulation around the world. These regulations subject ourbusiness activities to a pervasive array of increasingly detailed operational requirements, compliancewith which is costly, time-consuming and complex. We may be adversely affected by our failure tocomply with current laws and regulations or by changes in the interpretation or enforcement ofexisting laws and regulations. In particular, violation of applicable laws or regulations could result infines, temporary or permanent prohibition of the engagement in certain activities, reputational harmand related customer terminations, or other sanctions, which could have a material adverse effect onour reputation, business, results of operations or financial condition and cause our revenue to decline.For a more extensive discussion of the laws, regulations and regulators to which we are subject,please see the section headed “Regulatory Overview” in this prospectus.

We are subject to various regulations regarding the manufacture, labeling and marking,distribution, and sales and marketing of our prosthetic devices, and any failure or delay inobtaining these clearances or approvals would disrupt our business or subject us to substantialfines and criminal charges.

We are subject to various regulations regarding the manufacture, labeling and marking,distribution, and sales and marketing of our prosthetic devices. For example, we are required tocomply with United States Food and Drug Administration, European Union Medical Device Directives(Council Directive 93/42/ECC), China Food and Drug Administration and other regulations. Any failureor delay in obtaining these clearances or approvals could result in product recalls, substantial finesand criminal charges against us and our management team. Moreover, the regulatory requirementsvary widely from country to country. The time required to obtain regulatory clearances or approvalsmay be longer, and requirements for such clearances or approvals may be more complex. We mayalso incur significant costs in attempting to obtain and in maintaining foreign regulatory approvals.

We are exposed to a significant risk from exchange rate fluctuations. If we fail to manage ourforeign currency risk, our business, results of operations and financial condition may bematerially and adversely affected.

As a global dental prosthetic device provider, we have offices, production facilities and servicecenters throughout five continents, and distribute and sell our products in more than 20 countries. Forthe six months ended June 30, 2015, approximately 72.5% of our revenue was generated from salesoutside of Greater China. Our global presence subjects us to substantial exposure to foreign currencytransaction risk. In addition, we also procure our raw materials globally, mainly from Europe and theUnited States, which further contributes to our foreign currency transaction risk.

We prepare our consolidated financial statements in HKD, but our overseas subsidiaries preparefinancial statement in their respective reporting currency. Therefore, the translation of operations andfinancial positions reported in foreign currencies of our overseas subsidiaries into HKD exposes us toforeign currency translation risk. We have a substantial portion of assets and liabilities, such asgoodwill, customer relationships and bank loans, that are denominated in foreign currencies otherthan HKD. As of December 31, 2012, 2013 and 2014 and June 30, 2015, approximately 35%, 12%,14% and 8% of our total assets were denominated in HKD.

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The exchange rates that we adopt for our consolidated statements of profit or loss are theaverage exchange rates for the relevant periods. The EUR/HKD exchange rate and the AUD/HKDexchange rate fluctuated during the three years ended December 31, 2014, but the yearly averageEUR/HKD exchange rate and yearly average AUD/HKD exchange rate remained relatively stableduring the same period and did not materially affect our results of operations and financial conditions.However, the half-yearly average EUR/HKD exchange rate and AUD/HKD exchange rate decreaseddramatically from 10.5751 and 7.3010, respectively, for the first half of 2014, to 8.6637 and 6.0674,respectively, for the first half of 2015. The increase in our revenue denominated in EUR and AUD forthe first half of 2015 were partially eroded in the currency translation. For a detailed analysis of theimpact of the fluctuations of the average exchange rate for the relevant periods, please refer to thesection headed “Financial Information — Quantitative and Qualitative Information about Financial Risk— Foreign Currency Risk.” The average exchange rate of EUR/HKD, AUD/HKD or other ourfunctioning currency for relevant period may further fluctuate, and our results of operations, financialperformance and financial conditions may be adversely and materially affected.

During the Track Record Period, our most significant currency exposures were to EUR, RMB andUS dollar. After our SCDL Acquisition in March 2015, our Australian operations further expanded,which exposes us to significant foreign currency risk of transacting, investing and financing in AUD. Inthe past few years, the exchange rates between EUR and HKD and between AUD and HKD havebeen undergoing considerable fluctuations and movements. Although we seek to manage our foreigncurrency risks in order to minimize any negative effects caused by exchange rate fluctuations, therecan be no assurance that we will be able to do so successfully, and our business, financial conditionand results of operations could nevertheless be adversely affected by fluctuations in exchange rates.For more information on our foreign currency risk, please refer to the section headed “FinancialInformation — Quantitative and Qualitative Information about Financial Risk — Foreign CurrencyRisk.”

In order to hedge the foreign currency risk, we entered into two forward exchange contractsduring the Track Record Period, which were to hedge RMB/US$ exchange rate risk but had beenterminated. For more information on our forward exchange contracts, please refer to the sectionheaded “Financial Information — Quantitative and Qualitative Information about Financial Risk —Foreign Currency Risk.” As a matter of policy, we do not use forward foreign exchange contracts forspeculative purpose, nevertheless we cannot guarantee that all our forward foreign exchangecontracts, including any forward foreign exchange contract that we may enter in the future, will remaineffective instruments for hedging. Along with our expansion of business in the overseas markets, wemay decide to use other hedging instruments or tools to hedge our foreign currency risk. We cannotguarantee you that our adoption of new hedging measures will be successful. Failure to manage ourhedging instruments or tools may have a material adverse impact on our business, financial conditionand results of operations.

The global nature of our business may result in fluctuations in our sales and growth.

We are a company with international operations. Our global presence may complicate the factorsthat may affect our sales and growth. Economy, social condition, political environment, legal system,local customs, regulatory environment, industry practice vary widely among the countries where wetrade, which may increase our operation and compliance costs. We may enter new geographicalmarkets in the future, and we may not be able to adapt to a new business environment andconsequently suffer from loss. We believe the following non-exclusive factors may have a materialsadverse impact on our future cash flows, earnings, results of operations and financial condition:

Š uncertain or unpredictable political, legal and economic environments;

Š uncertain healthcare insurance scheme;

Š war and civil disturbances;

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Š changes in laws or policies of particular countries;

Š delays in obtaining or the inability to obtain necessary governmental approvals or permits;

Š limitations on ownership;

Š limitations on the repatriation of earnings;

Š trade restrictions and changes in tariffs;

Š import and export license requirements and restrictions; and

Š potential adverse tax consequences.

These risks may limit or disrupt our operations of business, restrict the movement of funds orresult in the deprivation of contract rights or the taking of property by nationalization or expropriationwithout fair compensation. Our continued success as a global company depends, in part, on ourability to develop and implement policies and strategies that are effective in anticipating andmanaging these and other risks in the countries in which we do business. Failure to manage theseand other risks may have a material adverse effect on our operations in any particular country and onour business as a whole.

We operate a global business through numerous foreign subsidiaries, and there is a risk thattax authorities will challenge our transfer pricing methodologies, which could adversely affectour results of operations and financial condition.

Many of the jurisdictions in which we conduct business have detailed transfer pricing rules whichrequire that all transactions with non-resident related parties be priced using arm’s length pricingprinciples. Contemporaneous documentation must exist to support this pricing. The tax authorities inthese jurisdictions could challenge the arm’s length nature of our related party transfer pricing policiesand as a consequence the tax treatment of corresponding expenses and income. Internationaltransfer pricing is an area of taxation that depends heavily on the underlying facts and circumstancesand generally involves a significant degree of judgment. If any of these tax authorities were successfulin challenging our transfer pricing policies, we may be liable for additional corporate income tax, andpenalties and interest related thereto, which may have a significant impact on our results ofoperations and future cash flows.

Political and economic policies of the PRC government may adversely affect our business andresults of operations.

We operate a number of production facilities in the PRC. A significant portion of our revenue isgenerated from products manufactured in the PRC. Any changes in the political, social and economicenvironment of the PRC will have a direct impact on the growth of the PRC economy and hence ourbusiness and results of operations.

The economy of the PRC differs from the economies of developed countries in many respects,including the extent of government involvement, level of development, growth rate, and control offoreign exchange and allocation of resources. However, many of the reforms and economic policiesadopted or to be adopted by the PRC government are unprecedented or experimental in nature andmay have unforeseen results, which may have an adverse effect on enterprises with substantialbusiness in the PRC, including us.

The PRC government has the broad discretion and authority to regulate the dental prostheticsand medical device industry in China and the government has implemented policies from time to timeto regulate economic expansion in China. Although in recent years the PRC government has

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implemented measures emphasizing the use of market forces for economic reform, it continues toplay a significant role in regulating industrial development. It also exercises significant control overChina’s economic growth through the allocation of resources, controlling payment of foreigncurrency-denominated obligations, setting monetary policy and providing preferential treatment toparticular industries or companies.

We are subject to risks associated with the PRC legal system.

The PRC legal system is based on written statutes. However, enforcement of existing laws andregulations may be uncertain and sporadic, and implementation and interpretation thereof may beinconsistent. The PRC judiciary is relatively inexperienced in enforcing the laws and regulations thatcurrently exist, leading to a degree of uncertainty as to the outcome of any litigation.

Further, it may be difficult to obtain swift and equitable enforcement, or to obtain enforcement ofa judgment by a court of another jurisdiction. The PRC’s legal system is based on written statutesand, therefore, decided legal cases do not have binding legal effect, although they are often followedby judges as guidance. The introduction of new PRC laws and regulations and the interpretation ofexisting ones may be subject to policy changes reflecting domestic political or social changes. As thePRC legal system develops, we cannot assure you that changes in such legislation or interpretationthereof will not have a material adverse effect on our business, financial condition, results ofoperations and future prospects and could cause the price of the Shares to fall.

Failure to make adequate contributions to various employee benefit plans as required by PRCregulations may subject us to penalties.

Companies operating in China are required to participate in various government sponsoredemployee benefit plans, including certain social insurance and housing funds, and contribute to theplans in amounts equal to certain percentages of salaries, including bonuses and allowances, of ouremployees up to a maximum amount specified by the local government from time to time at locationswhere we operate our businesses. The requirement of employee benefit plans has not beenimplemented consistently by the local governments in China given the different levels of economicdevelopment in different locations. Some of our subsidiaries operating in the PRC have not madeadequate employee benefit payments. We may be required to make up the contributions for theseplans, or further to pay late fees and fines if such requirements are not satisfied in due course. If weare subject to late fees or fines in relation to the underpaid employee benefits, our financial conditionand results of operations may be adversely affected. Please refer to the section headed “Business —Employees.”

We may rely on dividends paid by our subsidiaries to fund our cash and financing requirements,and any limitation on the ability of our PRC subsidiaries to pay dividends to us could have anadverse effect on our ability to conduct our business.

We are a holding company and may rely on dividends paid by our subsidiaries for cashrequirements, including the funds necessary to service any debt we may incur. If any of oursubsidiaries incurs debt in its own name, the instruments governing the debt may restrict dividends orother distributions on its equity interest to us. Furthermore, applicable PRC laws, rules andregulations permit payment of dividends by our PRC subsidiaries on a consolidated basis only out oftheir retained earnings, if any, determined in accordance with the PRC accounting standards. OurPRC subsidiaries are required to set aside a certain percentage of their after-tax profit based on thePRC accounting standards each year for their reserve fund in accordance with the requirements ofrelevant laws and provisions in their respective articles of associations. As a result, our PRCsubsidiaries may be restricted in their ability to transfer any portion of their net income to us in theform of dividends. Any limitation on the ability of our subsidiaries to pay dividends to us couldadversely limit our ability to grow, make investments or acquisitions that could be beneficial to ourbusinesses, pay dividends or otherwise fund and conduct our business.

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Under the new PRC Corporate Income Tax Law and its implementation regulations, PRC incometax at the rate of 10% is applicable to dividends paid by PRC enterprises to “non-residententerprises” (enterprises that do not have an establishment or place of business in China, or that havesuch establishment or place of business but the relevant income is not effectively connected withsuch establishment or place of business) subject to the application of any relevant income tax treatythat China has entered into, which provides for a lower withholding tax rate. A company incorporatedin Hong Kong may be subject to withholding tax at a rate of 5% (after obtaining approval from therelevant tax authorities) on dividends it receives from its PRC subsidiaries if it holds a 25% or moreinterest in the PRC subsidiary at the time of the distribution and is the beneficial owner of thedividend. If we or our non-PRC subsidiaries are considered “non-resident enterprises,” any dividendthat we or any such non-PRC subsidiary receive from our PRC subsidiaries may be subject to PRCtaxation at the 10% rate (or the lower treaty rate).

Furthermore, pursuant to the Provisional Measures for the Administration of Withholding ofEnterprise Income Tax for Non-resident Enterprises ( ), or theMeasures, promulgated in January 2009, entities in China which have direct obligation to make thefollowing types of payments to a non-resident enterprise must withhold income taxes for the non-resident enterprise: income from equity investment (including dividends and other return oninvestment), interest, rent, royalties, and income from assignment of property as well as other incomesubject to enterprise income taxes received by non-resident enterprises. The relevant tax withholderwhich enters a business contract or agreement relating to any income as prescribed in the Measureswith a non-resident enterprise for the first time must apply to the competent tax authority for thewithholding tax registration within 30 days of the date of conclusion of the contract and must alsocomply with other continuing filing and recording requirements subsequently. Where the relevant taxwithholder fails to withhold tax according to the relevant rules or is unable to perform its obligation ofwithholding, the non-resident enterprise must, within seven days of the date of payment or duepayment by the relevant tax withholder, file an enterprise income tax return with the competent taxauthority of the place where the income is derived. Failure to perform the obligations of withholding orpayment properly or at all by the relevant tax withholder or the non-resident enterprise may result infines and other penalties.

We may be deemed a PRC resident enterprise under the new PRC Corporate Income Tax Lawand related implementation rules, and be subject to PRC taxation on our worldwide income.

We are a Cayman Islands holding company with a majority of our operations conducted throughour operating subsidiaries in China. Under the new PRC Corporate Income Tax Law that took effecton January 1, 2008, enterprises established outside China whose “de facto management bodies” arelocated in China are considered “resident enterprises” for PRC tax law purposes and will generally besubject to the uniform 25% enterprise income tax rate as to their global income. Under theimplementation regulations issued by the State Council relating to the new PRC Corporate IncomeTax Law, a “de facto management body” is defined as the body that has the significant and overallmanagement control over the business, personnel, accounts and properties of an enterprise. In April2009, the State Administration of Taxation promulgated a circular to clarify the definition of “de factomanagement bodies” for enterprises incorporated overseas with controlling shareholders being PRCenterprises. It, however, remains unclear how the tax authorities will treat an overseas enterpriseinvested or controlled by another overseas enterprise and ultimately controlled by a Hong Kongindividual resident as is in our case. Although we have not been, and are currently not, treated as aPRC resident enterprise by the relevant PRC tax authorities, substantially all of our management iscurrently based in China and will remain in China. As a result, we may be treated as a PRC residententerprise for PRC enterprise income tax purposes and subject to the uniform 25% enterprise incometax as to our global income in the future. You should also read the risk factor entitled “ — Dividendspayable by us to our foreign investors and gain on the sale of our Shares may become subject towithholding taxes under PRC tax laws” below. If we are treated as such a PRC resident enterpriseunder the PRC tax law, we could face adverse tax consequences.

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Dividends payable by us to our foreign investors and gain on the sale of our Shares maybecome subject to withholding taxes under PRC tax laws.

Under the new PRC Corporate Income Tax Law and its implementation regulations issued by theState Council, to the extent such dividends for earnings derived since January 1, 2008 are sourcedwithin China and we are considered a “resident enterprise” for PRC tax law purposes, then PRCincome tax at the rate of 10% is applicable to dividends payable by us to investors that are“non-resident enterprises” so long as any such “non-resident enterprise” investor does not have anestablishment or place of business in China or, despite the existence of such establishment or placeof business in China, the relevant income is not effectively connected with such establishment orplace of business in China. A lower withholding tax rate may apply if such “non-resident enterprise” isincorporated in a jurisdiction that has entered into an income tax treaty or agreement with China thatallows a lower withholding. Similarly, any gain realized on the transfer of the Shares by such“non-resident enterprise” investors is also subject to a 10% PRC income tax if such gain is regardedas income derived from sources within China and we are considered a “resident enterprise” in China.If we are required under the new tax law to withhold PRC income tax on our dividends payable to ourforeign shareholders who are “non-resident enterprises,” or if you are required to pay PRC income taxon the transfer of our Shares, the value of your investment in our Shares may be materially adverselyaffected. Furthermore, if we are considered a “resident enterprise”, interest or gains earned bynon-resident individuals may be subject to PRC income tax at a rate of 20%. A lower rate or anexclusion for holders who are qualify for the benefits of a double tax treaty with China may apply. It isunclear whether, if we are considered a PRC “resident enterprise,” holders of our Shares might beable to claim the benefit of income tax treaties or agreements entered into between China and othercountries or regions.

Dividends payable by us to our foreign investors may become subject to withholding taxesunder relevant foreign tax laws, and in some circumstances, we may not be able to paydividends or make other forms of distributions.

The payment of dividends or other distributions will be made at the discretion of the Board andwill be based on our earnings, cash flow, financial conditions, capital and other reserve requirementsand any other conditions which the Board deems relevant. In certain limited circumstances, dividendswe pay may be subject to dividend withholding taxes in certain jurisdictions where we operate. Anumber of exemptions from dividend withholding tax exist such that shareholders resident in certaincountries may be entitled to exemptions from dividend withholding tax.

In addition, because we conduct our operations through subsidiaries, we may depend on oursubsidiaries to pay dividends to us so that we have funds to pay dividends to our shareholders. Eachof our subsidiaries is also subject to various restrictions on its payment of dividends based on itsjurisdiction of incorporation. For example, a jurisdiction may limit the amount of dividends a companymay pay, the sources of funds that can be used to pay dividends or require certain portions of profitbe retained as reserves. Further, payment of dividends by certain of our subsidiaries may berestricted by agreements to which they are party from time to time, such as financing arrangements.These restrictions may prevent our subsidiaries from paying dividends to us, thus limited our ability topay dividends to our shareholders. Any of these factors, individually or in combination, might preventus from paying dividends or making other forms of distribution.

You may experience difficulties in effecting service of legal process and enforcing judgmentsagainst us and our management.

Although we are a company incorporated under the laws of the Cayman Islands, substantially allof our assets are located in the PRC. Substantially all of our directors and officers reside inHong Kong and the PRC. As a result, it may not be possible for investors to effect service of processwithin the United States, the United Kingdom, Japan, Singapore or most other western countries

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upon such persons or us or to enforce judgments obtained in such court against them or us (otherthan those who may be located in Hong Kong).

Furthermore, we have been advised that the PRC does not have treaties providing for thereciprocal recognition and enforcement of civil judgments of courts with the United States, theUnited Kingdom, Japan, Singapore, or most other western countries. As a result, recognition andenforcement in the PRC of civil judgments of a court in any of the jurisdictions mentioned above inrelation to any matter not subject to a binding arbitration provision may be difficult or impossible.

In addition, although we will be subject to the Listing Rules and the Takeovers Code, upon theListing, the holders of our Shares will not be able to bring actions on the basis of violations of theListing Rules and must rely on the Stock Exchange to enforce its rules. Furthermore, the TakeoversCode does not have the force of law and provides only standards of commercial conduct consideredacceptable for takeover and merger transactions and share buy-backs in Hong Kong.

RISKS RELATING TO THE GLOBAL OFFERING

There has been no prior public market for our Shares and we cannot assure you that an activemarket will develop.

There has not been a public market for our Shares. An active public market may not develop orbe sustained after the Global Offering. The initial Offer Price range for our Shares was the result ofnegotiations among us and the Joint Bookrunners (on behalf of the Underwriters), and the Offer Pricemay differ significantly from the market price for the Shares following the Global Offering. We haveapplied to list and deal in our Shares on the Stock Exchange. However, even if approved, a listing onthe Stock Exchange does not guarantee that an active trading market for our Shares will develop. Ifan active market for our Shares does not develop after the Global Offering, the market price andliquidity of our Shares may be adversely affected. We cannot guarantee as to the ability ofShareholders to sell their Shares or the prices at which Shareholders would be able to sell theirShares. Consequently, Shareholders may not be able to sell their Shares at prices equal to or greaterthan the price paid for their Shares in the Global Offering.

Our Share price may be affected if additional Shares are sold by our substantial shareholder orare issued by us.

Triera, Mr. Chan Kwun Fung and Mr. Chan Kwun Pan will remain as our Controlling Shareholdersimmediately after the Global Offering. Furthermore, our Directors have granted a generalunconditional mandate to issue Shares with an aggregate nominal amount of not more than the sumof (i) 20% of the aggregate nominal amount of the share capital immediately following completion ofthe Global Offering and the Capitalization Issue and (ii) the aggregate nominal value of our sharecapital repurchased by us (if any) pursuant to the repurchase mandate. See the section headed“Share Capital — General Mandate to Issue Shares” in this prospectus. We have undertaken to theSole Sponsor, Sole Global Coordinator and Joint Bookrunners not to, without the prior writtenconsent of the Sole Sponsor, Sole Global Coordinator and Joint Bookrunners, from the date of theHong Kong Underwriting Agreement up to and including the date falling six months after the ListingDate, offer, issue, sell or contract or enter into any option or repurchase any shares or debt capital orother securities or securities convertible into or exchangeable into any of our securities. Each of ourControlling Shareholders has undertaken to the Sole Sponsor, Sole Global Coordinator and JointBookrunners that (a) except pursuant to the Stock Borrowing Agreement, it will not, for a period of sixmonths from the Listing Date, dispose of or otherwise pledge or hypothecate or create any options,rights, interests or encumbrances in respect of any of our Shares in respect of which it has shown bythis prospectus to be the beneficial owner, and (b) during the six months commencing on the datewhen the period in (a) above expires, it will not dispose of, or enter into any agreement to dispose ofor otherwise pledge or hypothecate or create any options, rights, interests or encumbrances inrespect of any of the Shares referred to in (a) above in the event that, immediately following such

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disposal or upon the exercise or enforcement of such options, rights, interests or encumbrances, itwould cease to be a Controlling Shareholder.

We cannot assure you that our Controlling Shareholders or pre-IPO investors will not dispose ofShares held by them or that we will not issue Shares pursuant to the general mandate, upon theexpiration of restrictions set out above. We cannot predict the effect, if any, that any future sales ofShares by our Controlling Shareholders or pre-IPO investors, or the availability of Shares for sale byour Controlling Shareholders or pre-IPO investors, or the issuance of Shares by us may have on themarket price of the Shares. Sale or issuance of a substantial amount of Shares by our ControllingShareholders, pre-IPO investors or us, or the market perception that such sale or issuance mayoccur, could materially and adversely affect the prevailing market price of the Shares.

The Offer Price may not be indicative of prices that will prevail in the trading market, and themarket price of our Shares may be volatile.

The price and trading volume of the Shares may be highly volatile. Factors such as variations inour revenue, earnings and cash flows and announcements of new investments, strategic alliancesand/or acquisitions, fluctuation in the market prices for our products and services, fluctuations in theshare prices for comparable listed companies, announcements of technological innovations news orevents affecting other companies in the same industry, our customers or end products which wesupply components for, currency fluctuations, and general political, economic and market conditionscould cause the market price and trading volume of our Shares to change substantially. Any suchdevelopments may result in large and sudden changes in the volumes and prices at which our Shareswill trade. In addition, from time to time, our Shares will likely be subject to changes in price that maybe disproportionate to (or may not be directly related to) our financial or business performance.

Investors will experience dilution in pro forma net tangible book value because the Offer Priceis higher than our net tangible book value per Share.

Because the Offer Price of our Shares is higher than the net tangible book value per Share of ourShares immediately prior to the Global Offering, purchasers of our Shares in the Global Offering willexperience an immediate dilution in pro forma consolidated net tangible book value of HK$0.92 perShare (assuming an Offer Price of HK$4.15, being the mid-point of our Offer Price range of HK$3.40to HK$4.90 per Share). If we issue additional Shares in the future, purchasers of our Shares mayexperience further dilution in their ownership percentage.

Dividends paid in the past will not be indicative of the amount of future dividend payments orour future dividend policy.

For the years ended December 31, 2012, 2013 and 2014 and the six months ended June 30,2015, we declared dividends of approximately HK$56.1 million, HK$24.0 million, HK$40.0 million andnil, respectively, and paid HK$37.5 million, HK$64.0 million, HK$15.0 million and HK$25.0 million individends in those periods, respectively. As of June 30, 2015, the amount of dividend payable was nil.In the future, the amount of dividends we may declare and pay will be subject to, among other things,the full discretion of our Directors, and will depend upon our results of operations, cash flows andfinancial condition, operating and capital requirements, the amount of distributable profits based onIFRS, our Memorandum and Articles of Association, the Companies Law, applicable laws andregulations and any other factors which our Directors may consider relevant. Accordingly, thehistorical dividends we have declared or paid are not indicative of our future dividend policy.

You should read the entire prospectus and we strongly caution you not to place any reliance onany information contained in press articles or other media regarding us and the Global Offering.

Prior to the completion of the Global Offering, there may be press and media coverage regardingus and the Global Offering. We make no representation and do not accept any responsibility as to the

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appropriateness, accuracy, completeness or reliability of such press articles or other media nor thefairness or appropriateness of any forecasts, views or opinions expressed by the press or other mediaregarding the Shares, the Global Offering or us. To the extent that such statements are inconsistent orconflict with the information contained in this prospectus, we disclaim them. Accordingly, prospectiveinvestors are cautioned to make their investment decisions regarding the Shares solely on the basis ofthe information contained in this prospectus and should not rely on any other information.

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