Antelope Enterprise Holdings Stock

Antelope Enterprise Holdings Limited and its subsidiaries provides livestream e-commerce services, business management and information systems consulting services, with a legacy ceramic tile manufacturing business.

Livestreaming Ecommerce Business

The company's livestreaming ecommerce business is operated in China through its 51% subsidiary, Hainan Kylin and its subsidiaries, Hangzhou Kylin and Anhui Kylin. The company's livestreaming ecommerce is an important growth engine for consumer good brands as it leverages the content of livestreaming to boost customers engagement and sales as it combines instant purchasing of a featured product and audience participation through a chat function or reaction buttons. Its customers usually include consumer goods brands, merchants, and small-scale ecommerce platforms. The hosts and influencers register and claim the jobs for livestreaming for the company's customers' products via Hainan Kylin's SaaS platform. The company tracks the sale of products of each host on this SaaS platform and report the sales results to its customers. The company is expanding its reach to second and third tiers cities in China.

Hainan Kylin's SaaS platform also includes a job-listing page designed especially for the company's enterprise customers to retain and engage freelancers and independent contractors. It expects to further develop this function of the SaaS platform to provide value-added services to the company's livestreaming ecommerce customers.

For the year ended December 31, 2022 (fiscal 2022), Hainan Kylin comprised virtually all of the company's ongoing business operations and accounted for 84.5% of its total revenue.

Ceramic Tile Business

The company is a manufacturer of ceramic tiles used for exterior siding and for interior flooring and design in residential and commercial buildings in China. The ceramic tiles, sold under the 'HD' or 'Hengda,' brands are available in over two thousand styles, colors and size combinations. It has five principal product categories include porcelain tiles, glazed tiles, glazed porcelain tiles, rustic tiles, and polished glazed tiles. Porcelain tiles are the company's best-selling products, accounting for over 96.9% of its total revenue of ceramic tile business in fiscal 2022.

For the year ended December 31, 2022, the company utilizes production facilities capable of producing 1.40 million square meters ceramic tiles. During the year ended December 31, 2022, the company had 10 production lines available for production and utilized two production lines during the peak season. As of December 31, 2022, it had seven production lines available for production.

The company primarily sells its ceramic tile products through an exclusive distributor network. It has long-term relationships with its customers; most of the company's top ten customers in 2022 has been purchasing from it for over ten years.

The company owns eighteen utility model patents. The company decided to divest the ceramic tiles manufacturing business, which is conducted through its two subsidiaries, Hengda and Hengdali.

Business Management and Consulting Business

The company also provides business management and consulting services which consists of computer consulting services and software development through its subsidiaries in China, including Chengdu Future and Antelope Chengdu. It diagnoses difficulties in infrastructure and enterprise systems and addresses business challenges that enterprises confront by developing strategies to surmount such hurdles to ensure the healthy growth and development of the company's customers. Its consulting teams has advanced technological knowledge and capabilities to implement workflow solutions via proprietary software products and services to help the company's customers with customized solutions to solve complex problems.

In 2021, Antelope Ruicheng incorporated a 51% owned subsidiary Hainan Kylin Cloud Services Technology Co., Ltd (Hainan Kylin) in China. Hainan Kylin engages in the livestreaming ecommerce business.

On October 28, 2022, Hainan Kylin incorporated a 100% owned subsidiary Hangzhou Kylin Cloud Services Technoligy Co., Ltd (Hangzhou Kylin) in China. Hangzhou Kylin engages in business management and consulting services for the livestreaming ecommerce industry.

On November 2, 2022, Hainan Kylin incorporated a 100% owned subsidiary Anhui Kylin Cloud Sevices Technology Co., Ltd (Anhui Kylin) in China. Anhui Kylin engages in the business of management and consulting services for the livestreaming ecommerce industry.

Growth Strategy

The key elements of the company's strategy are to continue to strengthen its business by increasing its sales and marketing efforts; expand by opportunistic and strategic acquisitions of business and/or companies; and invest to enhance its services.

Customers

Livestreaming Ecommerce Business

For the year ended December 31, 2022, the company had two customers which accounted for 17.7% and 16.2% of the total revenue generated from the livestreaming ecommerce business.

Business Management Consulting Services

The company's business management and consulting revenue accounted for 4.4% of its total revenue for the year ended December 31, 2022.

Ceramic Tile Business

There were three customers which accounted for 34.9%, 23.6%, and 18.5% of the total revenue generated from the ceramic tile business for the year ended December 31, 2022.

Sales and Marketing

The company participates in a variety of sales and marketing activities including trade shows, in-house sales and marketing seminars, factory tours, outdoor advertising, B2B catalogs and customer calls. The company's techniques allow it to gather and better understand customers' needs and requirements and to obtain feedback on its products and services and intend to continue utilizing these techniques.

Suppliers

For the year ended December 31, 2022, the company's major suppliers were Limited; and Foshan City Sanshui Baoligao Inorganic Materials Co., Ltd.

Research and Development

The company's research and development costs were approximately RMB 1.27 million for the year ended December 31, 2022.

Seasonality

The second and third calendar quarters (year ended December 2022) have been the peak season of the property developing industry, and, therefore, the company's quarterly sales are usually highest from May to September compared to the rest of the year. The company has lower sales between the months of January and March due to the effects of cold weather and the Chinese New Year.

Competition

The company's principal competitors are Guangdong White Rabbit Ceramics, Foshan Shiwan Yulong Ceramics Co., Ltd, Jinjiang Haoyuan Ceramics, Co., Ltd, Jinjiang Wanli Ceramics Co., Ltd, Jinjiang Tengda Ceramics Co., Ltd, and Jinjiang Haoshan Construction Materials Co., Ltd.

History

The company was founded in 1993 under the laws of the PRC. It was formerly known as China Ceramics Co., Ltd. and changed its name to Antelope Enterprise Holdings Limited in 2020.