Company: CHOW
Filing Date: 2025-04-01
Form Type: F-1
Source: 0001641172-25-001938
Chunk: 99

Company: ChowChow Cloud International Holdings Ltd
Filing Date: 2025-04-01
Form: F-1
Chunk 99
---
 license and IT application license directly attributable to services provided. For the year ended December 31, 2023, cost of revenues was HK$121.5 million (US$ 15.6million), increased by HK 24.3million or 24.9% from HK$ 97.2million in the same period in 2022. The increase was mainly attributable to the increase in cost of hardware, software license and IT application license for the IT solution projects, which involved hardware, software and IT application products with IT professional services or maintenance and support services, performed during the year ended December 31, 2023.

Gross profit and gross profit margin

As a result of the foregoing, the overall gross profit for the year ended December 31, 2023 was HK$ 19.9million (US$ 2.6million), an increase of HK$ 9.5million from HK$ 10.4million for the same period in 2022. The overall gross profit margin increased from 9.7% for the year ended December 31, 2022 to 14.1% for the year ended December 31, 2023.

The gross profit margin on revenue on products and the gross profit margin on revenue on services increased from 8.1% and 27.2% for the year ended December 31, 2022 to 11.8% and 57.6% for the year ended December 31, 2023 respectively, which were mainly attributable to (i) our low-price strategy to expand our customer base and revenue during the year ended December 31, 2022 and (ii) the increase in our revenue from managed and support service with AI and AIOps included in the revenue category of “Sale of Software and IT Application Products with IT Professional Services”, which generally entailed higher gross profit margins, during the year ended December 31, 2023.

Selling and marketing expenses

Selling and marketing expenses consisted primarily of (i) marketing service fee paid to the third party; and (ii) commission paid to the third parties relevant to the sales function.

Our major selling and marketing expenses were comprised of the following items during the years indicated:

|                                               |     | Year ended December 31, |    2022 |     |   |       |     |     |      2023 |     |     |         |     |   |       |     |   |  Change |