SecProbe.io

CORRESP
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filename1.htm

October
20, 2023

Via
Edgar Transmission

Mr.
Thomas Jones

Securities
and Exchange Commission

Division
of Corporation Finance

Office
of Trade & Services

Washington,
D.C. 20549

    Re:
    Majestic
                                            Ideal Holdings Ltd

    Amendment
    No. 2 to Registration Statement on Form F-1

    Filed
    September 18, 2023

    File
    No. 333-271502

Dear
Mr. Jones:

As
counsel for the Company and on its behalf, this letter is being submitted in response to the letter dated October 13, 2023 from the Securities
and Exchange Commission (the “Commission”) in which the staff of the Commission (the “Staff”) commented
on the above-referenced Draft Registration Statement on Form F-1 (the “Form F-1”).

For
the Staff’s convenience, the Staff’s comment has been stated below in its entirety, with the Company’s response set
out immediately underneath such comment.

Amendment
No. 2 to Registration Statement on Form F-1 filed September 18, 2023

General

 1. We
                                            note the changes you made to your disclosure appearing on the cover page, Summary and Risk
                                            Factor sections, relating to legal and operational risks associated with operating in China
                                            and PRC regulations. It is unclear to us that there have been changes in the regulatory environment
                                            in the PRC since the amendment that was filed on May 16, 2023, warranting revised disclosure
                                            to mitigate the challenges you face and related disclosures. The Sample Letters to China-Based
                                            Companies sought specific disclosure relating to the risk that the PRC government may intervene
                                            in or influence your operations at any time, or may exert control over operations of your
                                            business, which could result in a material change in your operations and/or the value of
                                            the securities you are registering for sale. We remind you that, pursuant to federal securities
                                            rules, the term “control” (including the terms “controlling,” “controlled
                                            by,” and “under common control with”) as defined in Securities Act Rule
                                            405 means “the possession, direct or indirect, of the power to direct or cause the
                                            direction of the management and policies of a person, whether through the ownership of voting
                                            securities, by contract, or otherwise.” The Sample Letters also sought specific disclosures
                                            relating to uncertainties regarding the enforcement of laws and that the rules and regulations
                                            in China can change quickly with little advance notice. We do not believe that your revised
                                            disclosure referencing the PRC government’s intent to strengthen its regulatory oversight
                                            conveys the same risk. Please restore your disclosures in these areas to the disclosures
                                            as they existed in the amendment that was filed on May 16, 2023.

Response: We respectfully
advise the Staff that on May 11, 2023, the Company’s PRC Counsel, Commerce
& Finance Law Offices, submitted a draft of the filing materials including a draft Form F-1 to the CSRC,
and the Company subsequently updated the disclosures appearing on the cover page, Summary and Risk Factor sections relating to the legal
and operational risks associated with operating in China and PRC regulations in reference to the Trial Administrative Measures of Overseas
Securities Offering and Listing by Domestic Companies and the CSRC’s comments regarding such disclosures. The Company was advised
by Commerce & Finance Law Offices, that based on discussions with the CSRC, it is a compliance obligation and requirement of the Company
to amend the relevant descriptions of the Prospectus to conform to the actual legal policies, business environment and judicial situation
in the PRC.

Dilution,
page 44

 2. Please
                                            tell us how your $(10,719,688) and $(0.09) net tangible book value and net tangible book
                                            value per share were calculated.

Response: We
respectfully advise the Staff that we have revised the disclosures on page 44.

September
30, 2022 Annual Financial Statements

Consolidated
Statements of Income and Comprehensive Income, page F-4

 3. Your
                                            note at the bottom of page F-4 indicates that your basic and diluted earnings per share were
                                            retroactively adjusted for the July 2023 stock split, however, we note no change to the earnings
                                            per share amount for each period presented. Please revise to include the correct amounts
                                            for earnings per share using the weighted average number of ordinary shares after the stock
                                            split of 18 million.

Response: We
respectfully advise the Staff that we have revised the disclosures on page F-4.

Consolidated
Statements of Changes of Shareholders’ (Deficit) Equity, page F-5

 4. It
                                            appears as the No. of Shares column has not been retroactively adjusted for the July 2023
                                            stock split. Please revise. Your March 31, 2023 interim shareholders’ equity statement should
                                            be similarly revised.

Response: We
respectfully advise the Staff that we have revised the disclosures on page F-5 and F-29.

March
31, 2023 Interim Financial Statements

Unaudited
Condensed Statements of Income and Comprehensive Income, page F-28

 5. Your
                                            calculation of earnings (loss) per share appears to be calculated using comprehensive income
                                            rather than net income. Please revise both your interim and annual statements of income to
                                            calculate earnings per share using net income.

Response: We
respectfully advise the Staff that we have revised the disclosures on page F-28.

Notes
to the Consolidated Financial Statements

10.
Leases, page F-44

 6. Please
                                            clarify your statement that the outstanding operating leases are below your threshold for
                                            capitalization and therefore, “no right of use assets and liabilities were recognized
                                            under ASU 842” given that in the table above, you have right of use assets and liabilities
                                            recorded on the balance sheet.

Response: We
respectfully advise the Staff that we have revised the disclosures on page F-44 and F-21.

12.
Taxes

China,
page F-46

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 7. Please
                                            clarify why you have a provision for income taxes in your income statement of RMB 677,656
                                            with a net loss and negative tax rate of (105.9)%. Your response should address the nature
                                            of the large adjustments to your effective tax rates including the tax loss not recognized
                                            of (30.6)% and tax concession of (97.6)%.

Response: We
respectfully advise the Staff that New Brand was not subject to PRC income tax in view of its tax loss for the six months period ended
March 31, 2023. However, dividend distribution out of the retained profits of foreign-invested enterprises in the PRC (i.e. New Brand)
earned after January 1, 2008 is subject to withholding income tax at a tax rate of 10% unless reduced by treaty. Multi Ridge accounted
for the 10% withholding tax arising from dividend it received from New Brand’s retained profit during the six months period ended
June 30, 2023 as PRC income tax. We respectfully advise the Staff that we have revised the tax policies and the disclosure on page F-46.

Our
negative tax rate (105.9%) was simply derived from dividing our Loss before Income Tax of RMB639,852 by our Provision for Income Taxes
of RMB677,656. As the denominator was negative, the rate derived was negative by presentation. We respectfully advise the Staff that
the terminology of Tax Concession was not perfectly depicting that nature of our withholding tax in the tax reconciliation, we have therefore
revised the disclosure on F-46.

Our
tax loss not recognized (30.6%) was simply derived from dividing our Loss before Income Tax of RMB639,852 (as adjusted by income not
taxable and expense not deductible) by our Loss before Income Tax of RMB639,852. As the denominator was negative, the rate derived was
negative by presentation.

*
* *

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Please
contact the undersigned at (852) 3923-1188 if you have any questions with respect to the responses contained in this letter.

Sincerely,

    /s/
    Lawrence S. Venick

    Lawrence
    S. Venick

    Direct
    Dial: +852.3923.1188

    Email:
    lvenick@loeb.com

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