Tianci International Inc
For the period ended Jul 31, 2024. Filed Oct 22, 2024.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Oct 22, 2024
Contents
Item 1. Business
The Share Exchange
On March 6, 2023 Tianci International, Inc. (“Tianci”), which had previously been a shell corporation with no business operations, completed a share exchange with RQS Capital Limited (“RQS Capital”), in which RQS Capital transferred all of the issued and outstanding capital stock of RQS United Group Limited (“RQS United”) to Tianci, and Tianci issued to RQS Capital 1,500,000 shares of its common stock and paid a cash price of $350,000 (the “Share Exchange”).
RQS United is a holding company incorporated in the Republic of Seychelles. RQS United has no operations other than holding 90% of the share capital of its subsidiary, Roshing International Co., Limited, a company organized under the laws of Hong Kong (“Roshing”). Shufang Gao and Ying Deng, who are officers and members of Tianci’s Board of Directors are also officers and directors of Roshing. Ying Deng owns the 10% of Roshing that is not owned by RQS United.
The Share Exchange was accounted for as a “reverse acquisition” effected as a recapitalization, wherein RQS United was considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized on Tianci’s financial statements.
Overview
The Company, through Roshing, provides global logistics services, encompassing booking and transportation arrangement and related logistics solutions. Roshing’s customized logistics solutions are tailored to meet the diverse needs of its customers.
As a logistics shipping operator, Roshing focuses on ocean freight forwarding services, including container shipping and bulk goods shipping service.
For the container shipping service, Roshing charters cargo space from shipping suppliers (such as shipowners, ship carrier or non-vessel operating common carriers) and then sub-charters that cargo space to its customers (cargo owners or cargo agents). For the bulk goods shipping service, Roshing issues fixture notes to customers, and then arranges the booking of ships, and signs chartering contracts with suppliers (such as shipowners). Roshing also tailors the selection of transport options, and arranges to transport the goods from the port of loading to the port of destination, so as to complete the performance of the contract.
Roshing currently does not own or operate any transportation assets. By leveraging our senior management’s expertise in the global logistics industry and adopting an asset-light strategy at the early stage, Roshing has seen a significant growth in logistics revenue during the year ended July 31, 2024. Shufang Gao, our CEO previously worked for a globally renowned shipping conglomerate, with over 20 years of management experience. His expertise spans shipping operation management, and logistics transportation. Leveraging this experience, he has provided the Company with the managerial framework to expand its global logistics business, as well as access to relevant customer and supplier resources in the shipping industry. Roshing’s business is primarily carried out in Hong Kong and other locations in the Asia-Pacific region, mainly in Japan, South Korea, Vietnam. Roshing’s logistics services also include the shipment of goods to African countries.
Roshing also generates revenue from the sale of electronic parts, and certain business and technical consulting services, independent from its global logistics business. This additional line of business produced 3.4% of our revenues for the year ended July 31, 2024.
Our Mission
Creating Value
As a global logistics enterprise, our primary mission is to provide customers with efficient, reliable, and safe shipping services that create value.
Promoting Global Trade & Connectivity
As an important component of global trade, global logistics enterprises also have a mission to promote the development and connectivity of global trade, and promote the prosperity and development of the global economy, by facilitating cross-border operations for businesses. We are committed to cultivating a robust global network, both online and offline. The online part involves connecting with customers and suppliers through social media platforms. The offline part includes acquiring potential customer through exhibitions, recommendations, and other direct interactions.
Undertaking Social Responsibility
We believe that shipping companies also need to be socially responsible, pay attention to environmental protection, social welfare, promote sustainable development and contribute to the prosperity and development of society.
We strive to optimize shipping routes and transportation plans to reduce energy consumption and emissions. Moreover, we will encourage our supply chain partners to adopt greener transportation and packaging methods, contributing to the sustainability of the entire industry. We also seek to actively participate in environmental projects and initiatives and collaborate with government and non-governmental organizations to focus on environmental protection.
Our Services
Our operations conducted through Roshing include providing the following services to our customers.
| 1. | Global Logistics Services |
Our global logistics services provided through Roshing accounted for 96.6% of our revenue for the year ended July 31, 2024. These services encompass shipping operations and related logistics solutions. Roshing customizes its logistics solutions to meet the diverse needs of its customers, including the optimization of shipping routes and the utilization of vessels with different tonnages. As a global logistics enterprise, depending on the type of cargo, Roshing provides container shipping and bulk goods shipping services. Container shipping is generally for small merchandise which can be palletized and fit into a container. Bulk goods shipping is generally for bulk commodities, such as lumber, steel, construction materials, chemicals, and agricultural products.
| a. | Container shipping |
Roshing’s container shipping service includes:
i. Customer Service and Support
| · | Customer Consultation: Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation. |
| · | Customized Solutions: Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation. |
ii. Contract and Quotation Management
| · | Transport Contracts: Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation. |
| · | Quotation Services: Providing quotes to customers based on the number of containers, size of containers, routes, shipping dates and various other factors. |
iii. Financial Management
| · | Cost Management: Managing and optimizing the costs associated with cargo transportation. |
| · | Billing and Collection: Handling the billing process and ensuring the timely collection of payments. |
vi. Risk Management
Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation.
| b. | Bulk goods shipping |
Roshing’s bulk goods shipping service includes:
| i. | Customer Service and Communication |
Providing ongoing support and clear communication to customers throughout the shipping process, addressing any queries or issues promptly.
| ii. | Fixture Note and Quotation Management |
| · | Fixture Note: Managing and maintaining transport contracts to ensure clear and effective agreements for bulk shipping. |
| · | Quotation Services: Offering detailed quotations for bulk shipping services, helping customers understand and proposing plans for budget control. |
| iii. | Chartering: Arranging the chartering of bulk cargo vessels including negotiating terms and conditions. |
| iv. | Ship Operations Management |
Overseeing and supervising the day-to-day operations of the ships involved in bulk cargo transportation.
| v. | Cooperation and Coordination |
Facilitating collaboration and coordination between various stakeholders involved in the shipping process, such as port authorities, cargo handlers, and other service providers.
vii. Financial Management
| · | Cost Management: Monitoring and optimizing the costs associated with bulk cargo transportation to ensure efficiency and cost-effectiveness. |
| · | Billing and Collection: Handling the billing processes and ensuring timely collection of payments. |
Our General Logistics Service Process
Roshing has a long-term and close cooperation with ocean shipping suppliers, including the signing of charter contracts, and service contracts. When a customer makes an inquiry to Roshing, we are usually able to offer competitive quotes and customize shipping solutions quickly.
Roshing begins by thoroughly evaluating the customer’s logistics needs, including the type of goods being shipped, the destination, and the required transportation time. Based on this information, Roshing designs an optimal transportation plan tailored to the customer’s specific requirements. This plan includes selecting the most efficient shipping routes, determining the appropriate container or bulk cargo vessel size and type, and considering any special handling or regulatory compliance requirements. Roshing then enters into a written contract with the customer for ocean shipping that can best meet the customer’s needs. This includes selecting a shipment method that aligns with the customer’s timeline and cargo specifications.
Roshing works with each customer to develop a cost-effective plan and service terms to meet the client’s specific needs. This involves detailed discussions to ensure that both parties have a clear understanding of expectations, costs, and responsibilities. Roshing will assign cargo space from the appropriate container or bulk cargo vessel based on the volume and weight of the shipment, minimize shipping costs, select the shortest route to save on freight, and choose the port closest to the customer’s destination.
Throughout the entire shipping process, Roshing maintains close oversight to ensure the safety and timely arrival of goods at the destination port. This involves real-time tracking and monitoring of the shipment, handling any unforeseen issues that may arise, and providing regular updates to the customer. By doing so, Roshing ensures that the goods are transported safely and arrive within the agreed timeframe, meeting all customer expectations.
We believe that Roshing stands out in the global logistics landscape because of its core strengths. First, Roshing’s management’s extensive network and industry relationships empower us with access to a wide customer base, enabling tailored solutions for an array of logistics requirements. Additionally, our collaboration with direct shipping suppliers ensures competitive rates and transparent service delivery. Moreover, Roshing’s expertise in route optimization enables us to efficiently manage logistics routes and secure favorable terms for its clients. These strengths collectively position us as a competitive player in the industry.
- Container shipping process
Roshing has a large network of international container shipping resources to provide customers with flexible booking services and personalized logistics solutions to meet the different needs of customers.
a. Long-term cooperation service agreements
| · | Roshing has a long-term cooperation agreement with container suppliers which grants it priority for container space and preferential prices. |
b. Customer source and inquiry quotation
| · | Current container shipping logistics customers of Roshing mainly come from the direct business contacts of the Company’s management. Roshing’s customers are mainly cargo owners, cargo agents, international trade companies and large commodity buyers. At present, the main cargo types of container shipping include: auto parts, electronics and electrical products, clothing and shoes, small consumer products, etc. The primary routes are from Asia to Africa, America, Europe and Australia. |
| · | Customer Inquiry: The customer usually makes an inquiry to Roshing based on the product name, category, quantity, volume, weight, departure port, destination port, arrival time or delivery time of the goods. |
| · | Quotation: Roshing generates shipping quotes for its clients based on the size, type and quantity of containers, the customer’s date, shipping providers and route needs. |
c. Contract signing and fee collection
| · | The customer places a confirmation order with Roshing, usually in the form of booking order which includes route, shipper, consignee, name of vessel, loading port, discharge port, container type, container quantity, cargo quantity, cargo description, gross weight and other information. |
| · | Roshing issues an invoice and debit note to the customer for fee collection. |
d. Container freight payment
| · | Roshing notifies the supplier (shipowner, ship carrier, non-vessel operating common carriers and freight forwarder) to confirm the booking information, and the supplier issues an invoice to Roshing for payment. |
| · | Roshing makes payment to the supplier and ensures that the supplier completes the shipment according to the agreed upon terms. |
e. Transportation arrangements
| · | The customer is responsible for loading goods, container trailers, customs declaration, purchase of insurance and delivery of containers to the container yard at the loading port prior to the shipping cutoff date. |
| · | After the customer completes the customs declaration and releases the products, the shipowner loads the containers onto the vessel and ships them to the designated port of destination according to the selected route. During this period, Roshing notifies the shipowner or the freight forwarder to issue a sea waybill or proforma to the customer detailing the condition that the freight has been received. |
| · | After discharging the goods at the destination port, the shipowner will notify the local freight forwarder designated by the customer to complete the customs clearance of the goods and land transportation of the containers to their destination. |
f. Follow up work
| · | Roshing oversees the shipment process to ensure it meets the customer’s satisfaction. |
- Bulk goods shipping process
Roshing’s bulk shipping operator services encompass a broad range of bulk merchandise, including steel, building materials, and engineering materials. Roshing provides customized maritime logistics solutions for customers. At present, Roshing’s main bulk shipping route covers: Japan, South Korea and Vietnam. To ensure that its customers receive customized shipping plans, Roshing closely follows shipping industry development trends, analyzes the characteristics of its customer’s goods, the port of destination, and timing requirements. Roshing also constantly optimizes the route layout to improve transportation efficiency and ensure that the goods arrive at the destination safely and on time.
a. Customer development
| · | The management and business teams of Roshing promote its services, develop customers and obtain cooperation opportunities through customer visits and direct sales. |
| · | Roshing gets referrals from customers and agents. Roshing then pays a sales commission to the referring customers and agents. |
b. Customer inquiry and quotation
| · | Inquiry: The customer puts forward the shipping requirements to Roshing, including the goods to be transported, the type and quantity of the goods, the characteristics of the goods, the transportation time, the destination port, any special arrangements and other needs. |
| · | Customized quotation: Roshing carries out pre-quotation work based on customer needs, such as shipping route supply resource inquiry and shipping demand matching. Roshing then confirms the shipping plan and cost quote with the customer. |
c. Contract signing and payments
| · | Contract signing: Roshing usually enters a fixture note with the customer, which contains the details of the specifications, quantities, transit times, prices, pricing methods, and others. |
| · | Payment: Roshing calculates the sea freight according to the fixture note and issues an invoice to the customer for the sea freight payment. |
d. Supplier’s selecting and chartering
| · | When selecting shipping supplier, Roshing considers the cargo characteristics, ship characteristics, cargo type & quantity, transportation requirements and shipment date. |
| · | When signing a fixture note with its customer, Roshing will sign a fixture note with the shipping supplier as well. The shipping suppliers are usually shipowners or ship carriers. |
e. Transportation arrangement and payment
i. Most of Roshing’s bulk cargo logistics are carried out on a Free In and Out (“FIO”), which means that the shipper is responsible for loading the cargo onto the vessel, the shipowner is responsible for the transport and the consignee is responsible for the unloading process. The FIO process for international shipping includes:
| · | Merchandise packing, land transportation, warehousing, port operation, customs clearance, loading operation and other work shall be completed by the cargo owner or its agency. |
| · | Usually after the goods are loaded on board, the agency obtains the captain’s receipt and issues the bill of landing. |
| · | Roshing’s responsibilities include ocean transportation of the goods from the time the goods are loaded onboard, onboard storage management, transportation process, sea navigation planning and adjustment, risk management, until the arrival of the goods at the destination port, and cargo unloading operations. Roshing’s obligation of carriage is completed when the merchandise is unloaded from the ship. |
ii. Customs clearance, delivery of goods, and delivery of shipping documents are usually completed by agencies in different ports. In most shipping scenarios, the consignment arrangement is made by the consensual shipping supplier. In some transport scenarios, Roshing directly assigns the agency for customers.
iii. Transportation Fee payment: Roshing usually pays the transportation fee to the shipping supplier in 3-4 days. If there are other fees, such as processing fees, port fees, commission, agency fees and other related fees, the fees are be settled according to the customer’s contract with Roshing.
f. Follow up service
i. File Organizing
Transportation records: After the shipping process, Roshing will organize and keep all documents and records generated during transportation for record.
ii. Customer Feedback
Customer feedback: Roshing pays great attention to its customer experience. It collects customer feedback on transportation services and addresses any problems or complaints that may arise.
Other Product & Services
| · | Electronic Device Hardware: Roshing is a distributor of hardware components for electronic devices and generates revenue from reselling these components and is not involved in product development and manufacturing. The main products include Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens and touch screens, and software technical services. Roshing’s main customers are oversea traders, direct traders of hardware components, companies engaged in the assembly and sale of finished products and private label entities seeking electronic component procurement with light customization. |
| · | Software Technical Services: Roshing provides technical consulting and training services to help customers, generally its existing customers, to better understand and properly use its customized software and related hardware. Roshing also provides software maintenance service to keep customer’s software up to date and assists customers in promoting business with ongoing marketing support. |
| · | Business Consulting Services: Roshing provides business consulting services to help customers apply for immigration and non-immigration visas. The Company is responsible for performing background checks, assessment, and preparing related application paper works. |
INDUSTRY AND MARKET OPPORTUNITIES
Logistics Market
The classification of the logistics service providers in the global logistics industry
Global logistics includes: Air Transport Logistics, Land Transport Logistics, Marine Transport Logistics, Terminal Operator etc. Among them, the Marine Transport Logistics is usually divided into shipping owner (holding ship assets) and shipping operator (not holding ship assets). The shipping operator includes Container Shipping Operator/ Bulk Shipping Operator/ Liquid Shipping Operator/ Others Shipping Operator. The main business of Roshing belongs to Container Shipping Operator and Bulk Shipping Operator categories.
Shipping operators, such as Roshing, play a key role in the global logistics industry. Their efficient operation management and services not only ensure the safety and punctual delivery of goods, but also play an important role in optimizing the logistics efficiency of global trade.
We believe the outlook for the shipping industry is strong. According to BIMCO (BIMCO is the world’s largest international shipping association, with over 2,000 members in more than 130 countries, representing 62% of the world’s tonnage.), ship supply is expected to grow on average 9.1% in 2024 and 4.1% in 2025. Ship deliveries are expected to hit a new record high in 2024, beating the record set in 2023. The fleet is expected to grow 14.9% between the end of 2023 and the end of 2025. Cargo volumes are expected to grow 3-4% in both 2024 and 2025.
Macro Economy Growth
According to the International Monetary Fund’s (IMF) estimates, the global economy should grow 3.1% in 2024 and 3.2% in 2025, slightly higher than the 3.0% estimated for 2023, indicating a modest but positive trend in global economic expansion. In our primary area of operations in East and Southeast Asia, the growth is expected to be 4.0% in 2024 and 3.8% in 2025.
According to BIMCO: Iron ore shipments are estimated to grow 2.5% from 2023 to 2025. BIMCO estimates that iron ore shipments will grow by 1-2% in 2024 and 0.5-1.5% in 2025. They will benefit from a 1.7% and 1.2% increase in global steel demand in 2024 and 2025 respectively as forecast by the World Steel Association.
Global Logistics Business Strengths
| · | Specialized Services: We boast a professional team that uses its collective experience and connections to provide clients with tailored, efficient, and reliable global logistics solutions. Shufang Gao, our CEO previously worked for a globally renowned shipping conglomerate, with over 20 years of management experience. His expertise spans shipping operation management and logistics transportation. Leveraging this experience, he has provided the Company with the managerial framework for expanding its global logistics business, as well as access to relevant customer and supplier resources in the shipping industry. Based on our collective knowledge and experience, we are able to tailor our services according to the needs of our customers’ needs, including route optimization, vessel selection, port logistics scheduling, and stringent cost management. |
| · | Regional Network: With the collective experience of our team, we have cultivated a network of valuable partnerships, particularly in our core regions of Japan, South Korea, and Vietnam. By focusing our efforts on these regions, we are able to offer tailored solutions that leverage our deep understanding of local regulations and market dynamics. This allows us to provide efficient and cost-effective services to our clients, facilitating logistics operations across borders. Our collaborative approach and dedication make us a trusted partner for businesses seeking reliable logistics solutions in the global marketplace. |
| · | Stable Transport Capacity and Reserved Space: We maintain enduring and strong relationships with major shipping suppliers, allowing us to secure vessel space in advance and ensure reliable and timely delivery of clients’ goods. This stability in transport capacity is particularly beneficial for clients with recurring shipping needs. |
Our Growth Strategies
Our growth plan includes a continued focus on the global logistics service as our primary business segment. As our capital resources increase, we intend to scale up our shipping operations, including chartering additional vessels. We believe that the expansion of shipping operations will allow us to provide more cost-effective shipping options to our clients, particularly those with large load needs.
Not only have we increased the size of our shipping business, we intend to continue to grow our shipping operation business by expanding global routes in addition to focusing on maritime shipping in the Asian region.
| · | Global logistics Network Expansion and Collaborative Partnerships: We aim to broaden our global presence to South America and Africa and forge strategic alliances with regional partners to ensure that we remain agile and responsive to the dynamic demand of the market. |
| · | Risk Management and Compliance Adherence: We intend to maintain compliance with pertinent international and local regulations as a priority to mitigate associated risks. Additionally, we have designated a risk management strategy to effectively address and mitigate potential risk issues, ensuring that we operate in accordance with regulatory requirements and maintain the highest standards of corporate governance. |
| · | Environmental Responsibility and Sustainable Practices: We are committed to environmental responsibility and sustainable practices, and as such, we plan to prioritize environmentally friendly ship cooperation. Through the optimization of transportation routes and the reduction of carbon emissions, we aim to further demonstrate our dedication to sustainability and contribute to a greener future. |
| · | Continuous Training and Development: We intend to prioritize continuous training and development for our team members to uphold professionalism and ensure their skills remain aligned with industry advancements. |
Global Logistics Business
Market Positioning and Route Optimization
| · | Precise Target Market Positioning: Based on the actual situation and requirements of the Company and our clients, we select the main segments of the shipping market to focus on, such as bulk cargo or containers, and provide customized services tailored to different market demands. |
| · | Optimization of Route Layout: Dynamically adjust shipping routes based on global trade flows and customer demands, increase or optimize the allocation of capacity on key routes and improve route coverage and timeliness. |
Capacity Management and Cooperative Alliances
| · | Reasonable Allocation of Capacity Resources: Develop plans for chartering based on market demand and supply trends, to optimize the allocation of capacity resources. |
| · | Strengthen Cooperation and Alliances: Actively establish close cooperative relationships with other shipping companies, shipping agents, ports, logistics providers, etc., to reduce costs and improve efficiency through resource sharing and mutual benefit. |
Service Innovation and Quality Enhancement
Strict Control of Service Quality: Strengthen internal management, improve employee quality, ensure that service quality and safety levels meet international standards, and build a good corporate image.
Sustainable Development
Formulation of Sustainable Development Strategies: Integrate environmental protection concepts into the Company’s long-term development plans and achieve sustainable development goals through measures such as optimizing routes and reducing emissions.
Risk Management and Response Mechanisms
Establishment of Sound Risk Management Systems: Establish sound risk warning and prevention mechanisms for various risks faced by the shipping market, such as freight rate fluctuations, exchange rate changes, and policy adjustments.
Formulation of Flexible Response Strategies: Timely formulate or adjust operational strategies based on market changes and policy adjustments to ensure stable business development.
Our Growth Plan
Our growth plan includes a continued focus on the global logistics service as our primary business segment. We intend to use capital as it becomes available to scale up our shipping operations, including chartering additional vessels. We believe that the expansion of shipping operations will allow us to provide more cost-effective shipping options to our clients, particularly those with large load needs.
Not only have we increased the size of our shipping business, we intend to continue to grow our shipping operation business by expanding global routes in addition to focusing on maritime shipping in the Asian region. Our growth plan includes:
Growth plan for container shipping operator service
a. Increase the number of container shipping customers
| · | Expand direct customers: Increase customer development activities by the Company’s management and business team. |
| · | Our goal is to increase the number of container shipping customers by approximately 50% annually. |
b. Increase industry acquisition
| · | Acquire a container operator: We hope to identify and acquire an appropriate container shipping operating company with annual revenue of more than $10 million, that has experience operating routes in South America and Africa, a good reputation in the market and long-term customer relationships. |
| · | Increase the Dry Bulk and Container business of subsidiaries outside Hong Kong: We hope to expand our operations outside Hong Kong to include new dry bulk markets, particularly in South America and Africa. We also hope to increase coverage of major global trade routes, enhancing market diversification and risk resilience. |
We hope to expand the scale of the charter fleet to support increased operations and market reach.
Growth plan of Bulk shipping operator service
a. Increase the number of bulk shipping customers
| · | Online: Increase contact with customers via Internet/communication. Offline: Establish contact with new customers by participating in exhibitions and increasing channel agent cooperation. |
| · | Expand direct customers: Increase customer development activities by the Company’s management and business team. |
| · | Our goal is to increase the number of bulk shipping customers by approximately 30% annually. |
b. Increase the number of ship charters and freight capacity
| · | We hope to increase the number of ship charters from our current monthly transport of bulk and general cargo of 2-3 ships with a volume of about 4,000-10,000 tons to 4-5 ships per month by 2025, with an approximate volume of about 8,000-15,000 tons. |
iii. Increase the number of routes
| · | At present, Asia is our primary area of operation. We seek to expand our area of operations and increase the number of routes to South America and Africa in the future. |
Competition
Roshing’s container shipping operation faces competition from global and regional shipping companies such as Maersk, Mediterranean Shipping Company (MSC), and CMA CGM Group. These companies offer extensive networks and comprehensive services, including advanced tracking technology, competitive pricing, and strong customer service capabilities. Additionally, logistics companies like DHL and FedEx also provide integrated transportation solutions, including container shipping.
To maintain competitiveness, Roshing focuses on providing high-quality, customized services, leveraging expertise, and maintaining strong relationships with customers through dedicated support and tailored solutions.
Roshing’s bulk shipping operation services compete with major bulk shipping companies such as Oldendorff Carriers, Pacific Basin, and Star Bulk Carriers. These companies typically have large fleets and extensive global networks, enabling them to offer competitive pricing and reliable services. Additionally, they may have long-term relationships with major industry players and ports, enhancing their operational efficiency.
To compete effectively, Roshing emphasizes efficient operational management, strong collaboration and coordination with stakeholders, and transparent financial management. By offering personalized customer service and flexible chartering options, Roshing strives to stand out in the market and build long-term customer loyalty.
Marketing and Promotion Activities
For the year ended July 31, 2024, Roshing maintained its marketing and sales team in its corporate office with four employees. Roshing implements the following strategies when engaging in marketing and customer acquisition:
| · | Market positioning: Roshing targets specific customer demographics, analyzes market segments and the needs of its target customers, and identifies high-value customer segments. For example, in the shipping/logistics sector its potential clients include import/export companies, manufacturing enterprises, e-commerce platforms, and distributors for large logistics companies. In the electronic device hardware trading sector, its clients are typically medium-sized non-Hong Kong traders and direct hardware and finished product sales brands. In the consulting services sector, its target groups encompass companies with software technology needs, business owners with domestic and international operations requirements, and clients seeking cross-border business consulting services. |
| · | Marketing mix strategies: Roshing develops comprehensive marketing mix strategies, encompassing product, pricing, and distribution strategies. This involves offering a diverse range of services to meet varying customer needs, devising reasonable pricing strategies based on customer demands and market competition, and establishing diverse sales channels including direct and agent sales. |
| · | Customer relationship management: Roshing establishes robust customer relationship management systems through regular customer communication and satisfaction surveys to understand customer needs and feedback. This enables us to adjust service strategies promptly, thereby enhancing customer satisfaction and loyalty. |
| · | Industry resources: Roshing conducts interviews and business introductions targeting potential customers leveraging the industry resources and customer base accumulated by its management and teams. |
| · | Digital transformation: Roshing leverages technologies such as big data and customer management systems for customer data analysis, enabling precision marketing through online channels like social media and e-commerce platforms. This facilitates the expansion of its customer base and enhances marketing effectiveness. |
For consulting service clients, Roshing’s future plans include increasing customer acquisition through social media, community marketing, website content, and participation in thematic exhibitions.
Customers
For the year ended July 31, 2024, three customers accounted for 48%, 25% and 11% of the Company’s total revenues. Each of them belongs to the logistics business section. For the year ended July 31, 2023, two customers accounted for 41% and 11% of the Company’s total revenues. As of July 31, 2024 and July 31, 2023, no customer accounted for over 10% of the Company’s total accounts receivable.
Employees
We have 11 full time employees and 1 part time employee. The following table classifies our employees by function as of July 31, 2024:
| Senior Management | 7 |
|---|---|
| Human Resources and Administration | 1 |
| Finance | 1 |
| Sales and Marketing | 2 |
| Total | 11 |
Insurance
We participate in employee social security plans for our full-time employees.
Intellectual Property
As of the date of this report, we have two domain names: roshing.com and tianci-ciit.com. We do not own or have rights to any other IP, such as patents, copyrights and trademarks.
Environmental Matters
We strictly comply with laws and regulations relating to environmental protection in Hong Kong since our main operation is in Hong Kong. It has not had a material adverse effect upon our capital expenditures, earnings, and we do not anticipate any material adverse effects in the future based on the nature of our future operations. We do not have any relevant records of being penalized for violating environmental protection regulations.
REGULATIONS
Regulations Related to our Business Operation in Hong Kong
Roshing is Tianci’s subsidiary established in Hong Kong through which Tianci conducts its operations. As of the date of this report, there was no statutory or mandatory licensing and qualification system in Hong Kong governing the global logistics services, electronic device hardware components products sales, technical service of the software and website development and business consulting services provided by Roshing.
Below sets out a summary of certain aspects of the Hong Kong laws and regulations which are relevant to our operation and business.
Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong)
The Business Registration Ordinance requires every person carrying on any business to make an application to the Commissioner of Inland Revenue in the prescribed manner for the registration of that business within one month after the commencement of business. The Commissioner of Inland Revenue must register each business for which a business registration application is made and as soon as practicable after the prescribed business registration fee and levy are paid and issue a business registration certificate or branch registration certificate for the relevant business or the relevant branch, as the case may be. Any person who fails to apply for business registration shall be guilty of an offence and shall be liable to a fine of HK$5,000 and to imprisonment for 1 year.
Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong), or the PDPO
The PDPO imposes a statutory duty on data users to comply with the requirements of the six data protection principles (the “Data Protection Principles”) contained in Schedule 1 to the PDPO. The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a Data Protection Principle unless the act or practice, as the case may be, is required or permitted under the PDPO. The six Data Protection Principles are:
| · | Principle 1—purpose and manner of collection of personal data; |
| · | Principle 2—accuracy and duration of retention of personal data; |
| · | Principle 3—use of personal data; |
| · | Principle 4—security of personal data; |
| · | Principle 5—information to be generally available; and |
| · | Principle 6—access to personal data. |
Non-compliance with a Data Protection Principle may lead to a complaint to the Privacy Commissioner for Personal Data (the “Privacy Commissioner”). The Privacy Commissioner may serve an enforcement notice to direct the data user to remedy the contravention and/ or instigate prosecution actions. A data user who contravenes an enforcement notice commits an offense which may lead to a fine and imprisonment.
The PDPO also gives data subjects certain rights, inter alia:
| · | the right to be informed by a data user whether the data user holds personal data of which the individual is the data subject; |
| · | if the data user holds such data, to be supplied with a copy of such data; and |
| · | the right to request correction of any data they consider to be inaccurate. |
The PDPO criminalizes, including but not limited to, the misuse or inappropriate use of personal data in direct marketing activities, non-compliance with a data access request and the unauthorized disclosure of personal data obtained without the relevant data user’s consent. An individual who suffers damage, including injured feelings, by reason of a contravention of the PDPO in relation to his or her personal data, may seek compensation from the data user concerned.
Tortious Duty Under Common Law
Apart from contractual liability, under common law, services providers also owe a duty of care to customers and may be liable for damage resulting from defects in services caused by their negligent acts or for any fraudulent misrepresentation made in the provision of services. Any person who undertakes to provide a service and who negligently performs his work and causes damage to another person or property, will also attract civil liability.
Trade Description Ordinance (Chapter 362 of the Laws of Hong Kong), or the TDO
The TDO aims to protect customers against unfair trade practices by regulating businesses to sell products and services in a truthful manner. It prohibits false trade descriptions in respect of services supplied in the course of trade.
Section 7A of the TDO provides that a trader who applies a false trade description to a service supplied or offered to be supplied to a consumer or supplies or offers to supply to a consumer a service to which a false trade description is applied, commits an offence.
Sections 13E, 13F, 13G, 13H and 13I of the TDO provide that a trader who engages in relation to a consumer in a commercial practice that (a) is a misleading omission; or (b) is aggressive; (c) constitutes bait advertising; (d) constitutes a bait and switch; or (e) constitutes wrongly accepting payment for a product, commits an offence.
A person who commits an offence under sections 7A, 13E, 13F, 13G, 13H or 13I shall be subject, on conviction on indictment, to a fine of HK$500,000 and to imprisonment for five years, and on summary conviction, to a fine at HK$100,000 and to imprisonment for two years.
The Supply of Services (Implied Terms) Ordinance (Chapter 457 of the Laws of Hong Kong), or the SOSO
The SOSO which aims to consolidate and amend the law with respect to the terms to be implied in contracts for the supply of services (including a contract for the supply of a service whether or not goods are also transferred or to be transferred, or bailed or to be bailed by way of hire under the contract) provides that:
| (a) | where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill; and |
| (b) | where the supplier is acting in the course of a business, the time for service to be carried out is not fixed by the contract, is not left to be fixed in a manner agreed by the contract or is not determined by the course of dealing between the parties, there is an implied term that the supplier will carry out the service within a reasonable time. |
Where a supplier is dealing with a party to a contract for supply of service who deals as a consumer, the supplier cannot, by reference to any contract term, exclude or restrict any liability of his arising under the contract by virtue of the SOSO. Otherwise, where any right, duty or liability would arise under a contract for the supply of a service by virtue of the SOSO, it may (subject to the Control of Exemption Clauses Ordinance (Chapter 71 of the Laws of Hong Kong)) be negatived or varied by express agreement, or by the course of dealing between the parties, or by such usage as binds both parties to the contract.
The Control of Exemption Clauses Ordinance (Chapter 71 of the Laws of Hong Kong), or the CECO
The CECO, which aims to limit the extent to which civil liability for breach of contract, or for negligence or other breach of duty, can be avoided by means of contract terms and otherwise, among others, provides that:
| (a) | under section 7, a person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence and in the case of other loss or damage, a person cannot exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness. |
| (b) | under section 8, as between contracting parties where one of them deals as consumer or on the other’s written standard terms of business, as against that party, the other cannot by reference to any contract term (i) when himself in breach of contract, exclude or restrict any liability of his in respect of the breach, or (ii) claim to be entitled to render a contractual performance substantially different from that which was reasonably expected of him, or (iii) claim to be entitled in respect of the whole or any part of his contractual obligation, to render no performance at all, except in so far as the contract term satisfies the requirement of reasonableness. |
| (c) | under section 9, a person dealing as a consumer cannot by reference to any contract term be made to indemnify another person (whether a party to the contract or not) in respect of liability that may be incurred by the other for negligence or breach of contract, except in so far as the contract term satisfies the requirement of reasonableness; and |
| (d) | under section 11, as against a person dealing as consumer, the liability for breach of the obligations arising under sections 15, 16 and 17 of the Sales of Goods Ordinance (Chapter 26 of the Laws of Hong Kong) cannot be excluded or restricted by reference to any contract term, and as against person dealing otherwise than as consumer, the liability arising under sections 15, 16 and 17 of the Sales of Goods Ordinance can be excluded or restricted by reference to a contract term, but only in so far as the terms satisfy the requirement of reasonableness. |
Sections 7, 8 and 9 of the CECO do not apply to, among others, any contract so far as it relates to the creation or transfer of a right or interest in any patent, trademark, copyright, registered design, technical or commercial information or other intellectual property, or relates to the termination of any such right or interest.
In relation to a contract term, the requirement of reasonableness for the purpose of the CECO is satisfied only if the court or arbitrator determines that the term was a fair and reasonable one to be included having regarded to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made.
Regulations related to employment and labor protection
Employment Ordinance (Chapter 57 of the Laws of Hong Kong), or the EO
The EO is an ordinance enacted for, amongst other things, the protection of the wages of employees and the regulation of the general conditions of employment and employment agencies. Under the EO, an employee is generally entitled to, amongst other things, notice of termination of his or her employment contract; payment in lieu of notice; maternity protection in the case of a pregnant employee; not less than one rest day in every period of seven days; severance payments or long service payments; sickness allowance; statutory holidays or alternative holidays; and paid annual leave depending on the period of employment.
Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), or the ECO
The ECO is an ordinance enacted for the purpose of providing for the payment of compensation to employees injured in the course of employment.
The ECO establishes a no-fault and non-contributory employee compensation system for work injuries and lays down the rights and obligations of employers and employees in respect of injuries or death caused by accidents arising out of and in the course of employment, or by prescribed occupational diseases.
As stipulated by the ECO, no employer shall employ any employee in any employment unless there is in force in relation to such employee a policy of insurance issued by an insurer for an amount not less than the applicable amount specified in the Fourth Schedule of the ECO in respect of the liability of the employer. According to the Fourth Schedule of the ECO, the insured amount shall be not less than HKD100,000,000 (approximately $13,000,000) per event if a company has no more than 200 employees. Any employer who contravenes this requirement commits a criminal offence and is liable on conviction to a fine and imprisonment. An employer who has taken out an insurance policy under the ECO is required to display a prescribed notice of insurance in a conspicuous place on each of its premises where any employee is employed.
Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong), or the MPFSO
The MPFSO is an ordinance enacted for the purposes of providing for the establishment of non-governmental mandatory provident fund schemes, or the MPF Schemes. The MPFSO requires every employer of an employee of 18 years of age or above but under 65 years of age to take all practical steps to ensure the employee becomes a member of a registered MPF Scheme within the first 60 days of employment. Subject to the minimum and maximum relevant income levels, it is mandatory for both employers and their employees to contribute 5% of the employee’s relevant income to the MPF Scheme. Any employer who contravenes the requirement of enrolling eligible employees in a registered MPF Scheme or the requirement of paying mandatory contributions to the MPF Schemes commits a criminal offence and is liable on conviction to a fine and imprisonment.
Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong), or the MWO
The MWO provides a prescribed minimum hourly wage rate (currently at HK$40 per hour) during the wage period for every employee engaged under a contract of employment under the EO. Any provision of the employment contract which purports to extinguish or reduce the right, benefit or protection conferred on the employee by the MWO is void.
Failure to pay minimum wage amounts to a breach of the wage provisions under EO. An employer who willfully and without reasonable excuse fails to pay wages to an employee when it becomes due commits a criminal offence and is liable on conviction to a fine and imprisonment.
Occupational Safety and Health Ordinance (Chapter 509 of the Laws of Hong Kong), or the OSHO
The OSHO aims to ensure the safety and health of employees when they are at work. Under the OSHO, an employer must ensure the safety and health of his workplace by (i) providing and maintaining plant and work systems that are safe and without risks to health, (ii) making arrangement for ensuring safety and health in connection with the use, handling, storage or transport of plant or substances, (iii) providing all necessary information, instruction, training and supervision for ensuring safety and health, (iv) providing and maintaining safe access to and egress from the workplace, and (v) providing and maintaining a safe and healthy work environment. An employer who fails to comply with the above may be liable on conviction to a fine and imprisonment, if he did so intentionally, knowingly or recklessly.
Occupational Safety and Health Regulation (Chapter 509A of the Laws of Hong Kong)
The Occupational Safety and Health Regulation (Chapter 509A of the Laws of Hong Kong) further sets out basic requirements for accident prevention, fire precaution, workplace environment control, hygiene at workplaces, first aid, as well as what employers and employees are expected to do in manual handling operations.
Occupiers Liability Ordinance (Chapter 314 of the Laws of Hong Kong)
The Occupiers Liability Ordinance regulates the obligations of a person occupying or having control of premises on injury resulting to persons or damage caused to goods or other property lawfully on the land. The Occupiers Liability Ordinance imposes a common duty of care on an occupier of premises to take such care as in all the circumstances of the case is reasonable to see that the visitors will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.
Regulations related to Hong Kong Taxation
Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong)
Under the Inland Revenue Ordinance, where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months after the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than one month before such individual ceases to be employed in Hong Kong, provided that a shorter notice may be accepted if deemed reasonable.
Tax on dividends
Based on the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by Roshing.
Capital gains and profits tax
The Inland Revenue Ordinance provides, among other things, that profits tax shall be charged on every person carrying on a trade, profession or business in Hong Kong in respect of his or her assessable profits arising in or derived from Hong Kong. Roshing is currently subject to the two-tiered profits tax regime according to Hong Kong tax rules and regulations.
The two-tier profits tax rates system of Hong Kong became effective since the assessment year 2018/2019. Under the two-tier profit tax rates regime, the profits tax rate for the first HKD2 million (approximately US$260,000) of assessable profits of a corporation will be subject to the lowered tax rate, 8.25%, while the remaining assessable profits will be subject to the legacy tax rate, 16.5%.
No tax is imposed in Hong Kong in respect of capital gains from the sale of shares. However, trading gains from the sale of shares by persons carrying on a trade, profession or business in Hong Kong, where such gains are derived from or arise in Hong Kong, will be subject to Hong Kong profits tax.
Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong)
Under the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong), a total of 0.2% of the higher of the consideration for or market value of the shares is currently payable on a typical sale and purchase transaction of Hong Kong shares. In addition, a fixed duty of HKD5 is currently payable on any instrument of transfer of Hong Kong shares. If no stamp duty is paid on or before the due date, a penalty of up to ten times the duty payable may be imposed.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.