Magic Empire Global Ltd.

Company Overview

Business Model: Magic Empire Global Limited is a financial services provider in Hong Kong, primarily engaged in corporate finance advisory services. Its core offerings include IPO sponsorship services, financial advisory and independent financial advisory services, compliance advisory services, and corporate services such as accounting, financial reporting advisory, company secretarial services, internal control enhancement, and investor relations advisory. Revenue is generated through fixed fees or project-based fees for these services.

Market Position: The Company operates in a highly competitive Hong Kong financial services industry. It positions itself as an active financial service provider with a proven track record and a diverse client base, including listing applicants, listed companies, private companies, and investors across various sectors (online advertising, property development, supply chain management, manufacturing, chemicals, logistics, education, natural resources, and travel). Its ability to offer comprehensive corporate finance advisory services from pre-IPO to post-IPO stages is highlighted as a competitive strength, fostering long-term client relationships and diversifying revenue sources.

Recent Strategic Developments:

• Share Structure Re-designation and Combination: On November 29, 2024, shareholders approved amending the authorized shares to 600,000,000, divided into 280,000,000 Class A ordinary shares (one vote per share), 20,000,000 Class B ordinary shares (twenty votes per share), and 300,000,000 non-voting ordinary shares. On February 6, 2025, a 4-for-1 share combination was effected, reducing outstanding Class A ordinary shares to 4,064,050 and Class B ordinary shares to 1,000,000.
• Business Diversification: In response to difficult Hong Kong capital market conditions in 2024, the Company diversified its financial advisory services to include clients pursuing listings on other key capital markets, such as Nasdaq.
• Corporate Services Expansion: The Company commenced providing corporate services through Giraffe Corporate Services Limited in September 2023.

Geographic Footprint: All of Magic Empire Global Limited's business operations are concentrated in Hong Kong. Its principal executive office is located at 3/F, 8 Wyndham Street, Central, Hong Kong.

Cross-Border Operations: Magic Empire Global Limited operates as a holding company incorporated in the British Virgin Islands, with its operating subsidiaries (Giraffe Financial Holdings Limited, Giraffe Capital Limited, Giraffe Investment Limited, Magic Empire Investment Limited, and Giraffe Corporate Services Limited) all incorporated and operating in Hong Kong. While its operations are exclusively in Hong Kong, some of its clients are PRC corporates with principal operations in Mainland China. The Company has provided financial advisory services to clients pursuing listings on Nasdaq.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: Not explicitly disclosed.
• Operating Margin: -104.2% (2025), -79.9% (2024)
• Net Margin: -72.1% (2025), -37.0% (2024)

Investment in Growth:

• R&D Expenditure: Not explicitly disclosed.
• Capital Expenditures: HK$0 (2025), HK$0 (2024), HK$1,904,972 (2023)
• Strategic Investments: No new long-term investments in 2025. In 2024, the Company made a new investment of HK$8,500,000 in a private company (Company D, a contract manufacturer of affordable luxury leather goods) and redeemed all prior investments for HK$48,253,736, realizing a net gain of HK$1,105,998.

Currency Impact Analysis:

• Foreign exchange impact on revenue and earnings: The Company's revenues and expenses are predominantly denominated in Hong Kong dollars. As the Hong Kong dollar is pegged to the U.S. dollar, the Company's exposure to foreign exchange fluctuations is minimal.
• Hedging strategies and effectiveness: The Company has not used any forward contracts, futures, swaps, or currency borrowings to hedge its exposure to foreign currency risk.
• Functional currency considerations: The functional currency of the parent company (Magic Empire Global Limited) in the British Virgin Islands is U.S. dollars, while its subsidiaries in Hong Kong use Hong Kong dollars.

Business Segment Analysis

IPO Sponsorship Services

Financial Performance:

• Revenue: HK$0 (2025), HK$400,000 (2024), HK$4,500,000 (2023)
• Operating Margin: Not explicitly disclosed for this segment.
• Key Growth Drivers: Performance is highly dependent on the Hong Kong capital market conditions and the number of IPOs. Revenue decreased significantly in 2024 due to a low number of IPOs in Hong Kong, and further declined to zero in 2025.

Product Portfolio:

• Services include guiding and advising listing applicants through the IPO process, leading and coordinating the listing process, conducting due diligence, making submissions to regulators, liaising with intermediaries, ensuring prospectus disclosure compliance, assessing investor interests, and managing public offers.

Market Dynamics:

• Competitive positioning within segment: Operates in a highly competitive market with numerous participants, including larger competitors with better brand recognition and resources, and local small-to-medium sized firms.
• Key customer types and regional market trends: Clients are private companies seeking listing on the Main Board or GEM board of the Stock Exchange of Hong Kong Limited. The segment is highly susceptible to adverse market conditions and sentiment in Hong Kong.
• Regulatory environment by jurisdiction: Subject to extensive and evolving regulatory requirements by the Securities and Futures Commission of Hong Kong (SFC) and the Stock Exchange of Hong Kong Limited, including sponsor eligibility criteria and conduct standards.

Geographic Revenue Distribution:

• Hong Kong: 100% of IPO sponsorship services revenue is derived from Hong Kong.

Financial Advisory and Independent Financial Advisory Services

Financial Performance:

• Revenue: HK$10,665,000 (2025), HK$11,730,000 (2024), HK$7,105,000 (2023)
• Growth Rate: -9.1% YoY (2025 vs. 2024)
• Operating Margin: Not explicitly disclosed for this segment.
• Key Growth Drivers: Revenue decreased in 2025 due to fewer completed financial advisory projects for clients pursuing listing on Nasdaq (four in 2025 vs. five in 2024). Revenue significantly increased in 2024 due to diversification into advising clients on listings in other capital markets, such as the United States.

Product Portfolio:

• Financial advisory services: Advising clients on transaction structures, legal and compliance, financial and treasury management, internal control and risk management, and recommending potential investors.
• Independent financial advisory services: Conducting reviews and analyses on proposed transactions, assessing fairness and reasonableness of terms, and issuing opinion letters to independent board committees and shareholders of listed companies.

Market Dynamics:

• Competitive positioning within segment: Faces fierce competition from numerous market participants in Hong Kong.
• Key customer types and regional market trends: Clients include listed companies in Hong Kong and private companies pursuing listings on other stock exchanges (e.g., Nasdaq).
• Regulatory environment by jurisdiction: Subject to Hong Kong regulatory framework (Listing Rules, GEM Listing Rules, Takeovers Code) and regulations of other stock exchanges where clients pursue listings.

Geographic Revenue Distribution:

• Hong Kong: Primary market for IFA services to Hong Kong listed companies.
• Growth Markets: Diversified to advise clients pursuing listings on Nasdaq, indicating an expansion of service reach beyond Hong Kong's domestic market.

Compliance Advisory Services

Financial Performance:

• Revenue: HK$864,000 (2025), HK$654,230 (2024), HK$1,987,030 (2023)
• Growth Rate: +32.1% YoY (2025 vs. 2024)
• Operating Margin: Not explicitly disclosed for this segment.
• Key Growth Drivers: Increase in 2025 due to new compliance advisory projects. Revenue decreased in 2024 due to completion of projects and a decrease in new IPOs in the Hong Kong market.

Product Portfolio:

• Services include advising listed companies on post-listing compliance with Listing Rules and GEM Listing Rules, discussing operating performance and financial condition, compliance with waivers, profit forecasts, and undertakings, accompanying clients to meetings with the Stock Exchange, and advising on notifiable or connected transactions.

Market Dynamics:

• Key customer types and regional market trends: Clients are listed companies on the Main Board and GEM in Hong Kong. Demand is influenced by the number of new IPOs and ongoing compliance needs of listed entities.
• Regulatory environment by jurisdiction: Governed by the Listing Rules and GEM Listing Rules of the Stock Exchange of Hong Kong Limited.

Geographic Revenue Distribution:

• Hong Kong: 100% of compliance advisory services revenue is derived from Hong Kong.

Corporate Services

Financial Performance:

• Revenue: HK$0 (2025), HK$0 (2024), HK$200,000 (2023)
• Operating Margin: Not explicitly disclosed for this segment.
• Key Growth Drivers: This segment commenced in September 2023 through Giraffe Corporate Services Limited. Revenue was HK$200,000 in 2023 but zero in 2024 and 2025.

Product Portfolio:

• Services include accounting and financial reporting advisory, company secretarial services, internal control enhancement, investor relations advisory, and other consulting services.

Market Dynamics:

• Key customer types and regional market trends: Clients are private companies or listed companies on the Stock Exchange of Hong Kong Limited.

Geographic Revenue Distribution:

• Hong Kong: 100% of corporate services revenue is derived from Hong Kong.

International Operations & Geographic Analysis

Revenue by Geography:

International Business Structure:

• Subsidiaries: Magic Empire Global Limited (British Virgin Islands, holding company) wholly owns Giraffe Financial Holdings Limited (Hong Kong, intermediate holding company). Giraffe Financial Holdings Limited wholly owns Giraffe Capital Limited (Hong Kong, corporate finance business), Giraffe Investment Limited (Hong Kong, investment holding), Magic Empire Investment Limited (Hong Kong, investment holding), and Giraffe Corporate Services Limited (Hong Kong, corporate services).
• Joint Ventures: Not disclosed.
• Licensing Agreements: Not disclosed.

Cross-Border Trade:

• Export Markets: Not applicable as the Company provides services rather than goods. However, it advises PRC corporates and clients pursuing listings on Nasdaq, indicating a cross-border service provision.
• Import Dependencies: Not disclosed.
• Transfer Pricing: Not explicitly detailed, but the Company is subject to international tax planning and transfer pricing risks as a multi-jurisdictional entity.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Not disclosed for 2024 or 2025.
• Dividend Payments: HK$0 (2025), HK$0 (2024), HK$1,581,900 (2023).
• Dividend Yield: Not applicable for 2024 and 2025.
• Future Capital Return Commitments: The Company currently intends to retain any future earnings for business operations and expansion and does not anticipate declaring or paying dividends in the foreseeable future.

Balance Sheet Position (as of December 31, 2025):

• Cash and Equivalents: HK$120,729,816 (US$15,511,392)
• Total Debt: Not explicitly disclosed as traditional debt. Operating lease liabilities (current and non-current) total HK$3,063,509 (US$393,600).
• Net Cash Position: HK$117,666,307 (US$15,117,792) (Cash less total operating lease liabilities)
• Credit Rating: Not disclosed.
• Debt Maturity Profile: Operating lease obligations: HK$1,721,280 due in less than 1 year, HK$1,506,120 due in 1 to 3 years.

Cash Flow Generation (for the year ended December 31, 2025):

• Operating Cash Flow: (HK$6,781,871) (US$871,336) (net cash used in operating activities)
• Free Cash Flow: Not explicitly disclosed, but given negative operating cash flow and no capital expenditures, it would also be negative.
• Cash Conversion Metrics: Not explicitly disclosed.

Currency Management:

• Cash holdings by major currencies: Cash balances are maintained at financial institutions in Hong Kong, predominantly in Hong Kong dollars.
• Natural hedging through operational diversification: Not explicitly stated, but the peg between HKD and USD minimizes foreign exchange risk for USD-denominated transactions.
• Financial hedging instruments and strategies: No forward contracts, futures, swaps, or currency borrowings are used for hedging.

Operational Excellence

Production & Service Model: Magic Empire Global Limited provides corporate finance advisory services through its licensed subsidiary, Giraffe Capital Limited (GCL), and corporate services through Giraffe Corporate Services Limited (GCSL). Services are delivered on a project-by-project basis, with fees often structured around milestones. The model emphasizes leveraging an experienced management team and professional staff to provide comprehensive services from pre-IPO to post-IPO stages.

Global Supply Chain Architecture: Key Suppliers & Partners:

• Professional Parties: The Company coordinates with various professional parties (e.g., legal counsels, auditors) for IPO sponsorship and financial advisory projects.
• Underwriters: Network 1 Financial Securities, Inc. and Alexander Capital, L.P. acted as underwriters for the Company's IPO.
• Third-Party Consultants/Specialists: Engages third-party consultants and specialists for cybersecurity enhancement, validation of controls, and staying abreast of evolving risks.

Facility Network:

• Manufacturing: Not applicable.
• Research & Development: Not explicitly disclosed as a separate network, but R&D focus is on technology and application of AI, as evidenced by a SAFE investment in an AI company in 2023.
• Distribution: Not applicable.

Operational Metrics:

• Capacity utilization, efficiency measures, quality indicators: Not explicitly disclosed.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Projects generally originate from the networks of Responsible Officers, referrals from existing clients or other professional parties, and direct approaches by clients based on market reputation or previous business relationships.
• Channel Partners: Not explicitly detailed, but referrals from other professional parties indicate a network-based approach.
• Digital Platforms: Not explicitly detailed for sales, but the Company's website is www.meglmagic.com.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients: Major clients are listing applicants and listed companies in Hong Kong, as well as private companies and investors.
• Strategic Partnerships: Not explicitly detailed, but collaboration with professional parties for IPOs and financial advisory implies strategic alliances.
• Customer Concentration: In 2025, Customer I accounted for 19.9% of total revenue, and Customer G and Customer H each accounted for 15.6%. In 2024, Customer C accounted for 25.4%, Customer D for 16.0%, Customer E for 14.1%, and Customer B for 11.0%. In 2023, Customer F accounted for 28.3%, Customer A for 11.6%, and Customer B for 10.2%. This indicates a degree of customer concentration that varies year-to-year.

Regional Market Penetration:

• Hong Kong: Strong market penetration in corporate finance advisory services for listing applicants and listed companies.
• Growth Markets: Actively exploring projects to advise clients listing in other key capital markets, such as the United States (e.g., Nasdaq listings).

Competitive Intelligence

Global Market Structure & Dynamics

Industry Characteristics: The financial services industry in Hong Kong is highly competitive with a large number of participants. It is susceptible to changes in global and domestic economic, social, and political conditions, including interest rate fluctuations, foreign currency exchange rate volatility, monetary policy changes, the outcome of the Sino-US trade dispute, and social unrest. The corporate finance market in Hong Kong experienced a low number of IPOs in 2024.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Larger Competitors: May have advantages in brand recognition, reputation, wider service range, stronger human and financial resources, longer operating histories, and broader geographic presence.
• Local Medium and Small-sized Sponsors: Offer a similar range of services, contributing to keen competition.

Regional Competitive Dynamics: Competition creates an unfavorable pricing environment, potentially leading to reduced service fees and pressure on gross margins, especially during market slowdowns. The Company's strategy includes leveraging its brand awareness and proven track record to secure deals.

Risk Assessment Framework

Strategic & Market Risks

Global Market Dynamics:

• Hong Kong Market Conditions: Business performance is highly influenced by Hong Kong's financial and economic conditions, including interest rate fluctuations, foreign currency exchange rates, monetary policy, Sino-US trade disputes, and social unrest. Any deterioration could adversely affect demand for services, pricing, and revenue.
• Technology Disruption: Not explicitly detailed as a risk, but the Company has invested in an AI company, suggesting awareness of technological advancements.
• Customer Concentration: The Company has a diverse client base across various industry sectors, which helps mitigate negative effects from cyclical behavior or downturns in specific sectors. However, there is annual variation in customer concentration, with certain customers accounting for significant portions of revenue in specific years.

Operational & Execution Risks

Global Supply Chain Vulnerabilities:

• Supplier Dependency: Not explicitly detailed, but reliance on professional parties (e.g., legal, audit) for project execution is inherent.
• Regional Disruptions: Operations are concentrated in Hong Kong, making the Company highly susceptible to natural disasters, health epidemics (e.g., COVID-19, Ebola, SARS), power loss, telecommunications failures, war, riots, or terrorist attacks in the region, which could disrupt operations and services.
• Trade Restrictions: Changes in international trade policies, trade disputes, barriers, or tariffs could dampen growth in China and other markets where clients reside, potentially affecting the Company's business opportunities and financial condition.

Financial & Regulatory Risks

Currency & Financial Risks:

• Foreign Exchange: Minimal exposure due to the Hong Kong dollar's peg to the U.S. dollar, but any de-pegging could have a material adverse effect.
• Interest Rate Risk: Exposure mainly arises from fixed deposits with banks (fair value risk) and cash deposits (cash flow risk), but interest rates of cash at bank are not expected to change significantly.
• Credit & Liquidity: Recorded net operating cash outflow for 2024 and 2025. Failure to obtain sufficient funds could materially and adversely affect liquidity and financial condition. Revenue is non-recurring, and payments are milestone-based, leading to unpredictable profitability and potential delays or non-receipt of mandated payments.
• Regulatory Capital Requirements: The regulated operating subsidiary, Giraffe Capital Limited, must maintain minimum paid-up share capital (HK$10,000,000) and liquid capital (HK$100,000). Failure to comply could result in penalties, limitations on business activities, or license revocation.

Regulatory & Compliance Risks:

• Multi-Jurisdictional Compliance: Operates in a heavily regulated industry in Hong Kong, subject to extensive and evolving requirements from the SFC and Stock Exchange. Non-compliance could lead to fines, disciplinary actions, or license suspension/revocation.
• Trade Regulations: Not explicitly detailed beyond general trade dispute risks.
• Tax Regulations: Hong Kong subsidiaries are subject to Hong Kong profits tax (two-tiered system: 8.25% on first HK$2,000,000, 16.5% thereafter). The parent company in BVI is exempt from income tax.

Geopolitical & External Risks

Country-Specific Risks:

• Political Risk (Hong Kong/PRC): All operations are in Hong Kong. However, due to "long arm provisions" under PRC laws, the Chinese government may exert significant oversight and discretion, potentially intervening in or influencing operations. Changes in PRC policies, regulations, and enforcement, including those related to overseas listings and data security, could materially impact the Company and its clients. The Hong Kong National Security Law and the Safeguarding National Security Ordinance could also adversely affect business operations.
• Economic Risk: Downturns in the Hong Kong, China, or global economy, and economic/political policies of China, could materially and adversely affect business and financial condition.
• Geopolitical Conflicts: The war in Ukraine and military instability in Israel and its region could materially and adversely affect global economic markets, potentially impacting the Company's business, customers, and financial performance, despite no direct business with entities in these regions.

Innovation & Technology Leadership

Research & Development Focus:

• Global R&D Network: Not explicitly detailed as a network.
• Innovation Pipeline: The Company made an investment in an AI company (Company C) in 2023, indicating an interest in technology development, specifically in AI for insights.

Intellectual Property Portfolio:

• Patent Strategy: Not explicitly disclosed.
• Licensing Programs: Not explicitly disclosed.
• IP Litigation: Not explicitly disclosed.

Technology Partnerships:

• Strategic Alliances: Not explicitly disclosed, but the investment in an AI company suggests potential for future technology-focused collaborations.
• Research Collaborations: Not explicitly disclosed.

Leadership & Governance

Executive Leadership Team

International Management Structure:

• The executive leadership team, including the CEO and CFO, is based in Hong Kong. Regional leadership is not explicitly detailed beyond the Hong Kong-based team.

Board Composition:

• The board of directors consists of 5 Directors: 2 executive directors and 3 independent directors.
• Independence: All three independent directors (Mr. Chi Wai Siu, Ms. Ka Lee Lam, Ms. Jessica Hung) satisfy Nasdaq Listing Rules and SEC Rule 10A-3 independence requirements.
• International Expertise: Directors have experience in investment banking, transaction advisory, valuation, business management, and securities trading in Hong Kong and Canada.
• Diversity: The board aims for diversity in gender, skills, age, professional experience, knowledge, cultural/education background, ethnicity, and length of service. As of the filing date, the board includes 2 female directors (out of 5 total).
• Committee Structure: The board has an audit committee, a compensation committee, and a nominating and corporate governance committee.

Regulatory Environment & Compliance

Multi-Jurisdictional Regulatory Framework: Primary Regulatory Environments:

• Hong Kong: The Company's operations are highly regulated by the Securities and Futures Commission of Hong Kong (SFC) and the Stock Exchange of Hong Kong Limited. Key regulations include the Securities and Futures Ordinance (SFO), Securities and Futures (Financial Resources) Rules (FRR), Listing Rules, GEM Listing Rules, Takeovers Code, and various codes and guidelines (e.g., Code of Conduct, Sponsor Guidelines). Compliance involves licensing, minimum capital requirements, notification of events, submission of audited accounts and financial resources returns, annual fees, continuous professional training, and substantial shareholder obligations.
• British Virgin Islands: As a BVI-incorporated holding company, Magic Empire Global Limited is subject to the BVI Act, which governs dividend distributions based on solvency tests.
• United States (for Nasdaq listing): Subject to U.S. federal securities laws, including Exchange Act reporting obligations, Nasdaq listing standards, and the Holding Foreign Companies Accountable Act (HFCAA) and Accelerating Holding Foreign Companies Accountable Act (AHFCAA) regarding PCAOB inspections of auditors.

Cross-Border Compliance:

• Export Controls: Not explicitly detailed.
• Sanctions Compliance: The Company monitors potential risks from sanctions related to geopolitical conflicts (e.g., Ukraine war), but no direct business with sanctioned entities is reported.
• Anti-Corruption: Not explicitly detailed, but general compliance with legal and regulatory requirements is stated.
• Data Protection: The Company may be subject to PRC laws relating to data protection (e.g., Data Security Law, Revised Measures for Cybersecurity Review) due to some PRC corporate clients, although its operations are in Hong Kong and it currently holds personal information for fewer than 100 PRC individual clients. Significant uncertainty exists regarding the interpretation and enforcement of these PRC laws and their potential extension to Hong Kong.

International Tax Strategy:

• Transfer Pricing: Not explicitly detailed, but recognized as a risk for international tax planning.
• Tax Treaties: The BVI is not party to any double tax treaties applicable to the Company.
• BEPS Compliance: Not explicitly detailed.

Environmental & Social Impact

No material information explicitly stated in the filing regarding global sustainability strategy, environmental commitments, regional sustainability initiatives, or social impact by region.

Currency Management & Financial Strategy

Multi-Currency Operations: Currency Exposure:

Hedging Strategies:

• Transaction Hedging: Not explicitly used.
• Translation Hedging: Not explicitly used.
• Economic Hedging: The Company relies on the Hong Kong dollar's peg to the U.S. dollar to minimize foreign exchange fluctuations. No financial hedging instruments (forward contracts, futures, swaps, or currency borrowings) are used.