Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 27

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 3
Chunk 27
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 nature of the
work involved. However, when the size of their businesses grow in the respective regions, they may consider setting up their own human
resources departments to manage the payroll and employment functions on their own due to economies of scale. If our end-users decide not
to continue engaging our Group for payroll outsourcing services and/or employment services due to their expansion of businesses in the
respective regions, our business and results of operations may be materially and adversely affected.

We may not be able to implement our business
plans successfully

We plan to expand our business
operation in the PRC and Hong Kong, with a focus on the PRC market. We may encounter difficulties in implementing such plan.

In particular, we may
encounter difficulties in expanding our business operation in the PRC because the payroll outsourcing service industry and the employment
service industry in the PRC are currently dominated by PRC enterprises, which used to be the only authorized entities to provide the services
in the PRC. There is no assurance that we can grow our customer base in the PRC. Any inability to execute our development plans in the
PRC market could adversely affect our business, growth, financial condition and results of operations.

Our continual development
depends on our ability to successfully implement our business strategies and future plans, which in turn is subject to uncertainties and
changing market conditions in the relevant jurisdictions. Our plans for development and business expansion are formulated based on assumptions
on the occurrence of certain future events, which may or may not materialize. There is no guarantee that we will be able to successfully
implement our business plans or any of our business strategies will yield the benefits or achieve the level of profitability as our anticipation.
Furthermore, our Group may not be able to manage the growth of our business effectively in a controlled manner. Over-expansion may strain
our limited managerial, operational and financial resources, which may have a material adverse impact on the stability of our operational
and financial conditions.

The master service agreements we entered
into with our channel customers do not provide any obligation on our channel customers to engage us for our payroll outsourcing services
and/or our employment services and the significant reduction in number and/or scale of engagements from channel customers could have a
material adverse effect on our business, financial condition and results of operations.

For the years ended June
30, 2025, 2024 and 2023, our revenue derived from our channel customers accounted for approximately 62.4%, 63.7% and 74.0%