Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 71

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 4
Chunk 71
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 our existing
suppliers may be temporarily short in inventory, management believes that we could purchase needed raw materials from other suppliers
without difficulty or price premiums.

In order to ensure a stable supply
of raw materials that can meet the ongoing requirements of sales and distribution, the quantity of each procurement order for raw materials
is determined by the Group with reference to (i) the customers’ indicative orders prevailing from time to time; (ii) the inventory
levels prevailing from time to time; and (iii) the price trend and fluctuation of raw materials as predicted by the Group. The Group also
implements stock control procedures, including up-to-date recording of all incoming and outgoing items into and out of our warehouse and
production lines. The Group did not have any material obsolete inventory written off during the years ended December 31, 2022, 2023 or
2024.

Production Facility. Our manufacturing facility, which is operated by FPPF, is equipped with different types of machines and is able to produce about three
million pieces of electrical hair styling products per annum.

The principal production components
of the Group are injection molding machines, EDM machines, milling machines, grinding machines, lathe, spraying chambers and ovens, pad
printing machines, hot stamping machines, production lines with ovens, heater winding machines, bristle insertion machines, wire forming
machines, wire stripping machines, lead cutting machines, spot welding machines, hot plate welding machines, crimping machines and ultrasonic
welding machines. The majority of the plant and machinery now situated in the SZ Factory are owned by the Group. Safeguarding policies
have been set up and maintained by the Group. There are security guards and gates at the entrance, a 24-hour surveillance system, security
scanners for entrance and exit, periodic count of assets, in and out register and insurance coverage.

  43  

Production Process. The following flow
chart illustrates our production process:

Marketing, Promotions and Advertising

The Group carries out its sales
and distribution activities through its sales and marketing team. The Group’s sales and marketing strategy secures its overseas
orders by establishing confidence and reputation in the Group’s products, quality assurance, reasonable and competitive pricing
and maintenance of long-term relationships with overseas customers. In addition, the Group has participated in various exhibitions in
Hong Kong, the PRC and overseas to promote the Group’s products to overseas customers and has pursued potential overseas customers
through business visits, new product presentations and briefing