New stock issuance | Kuaigoudache will start soliciting shares today and is expected to be listed on June 24.

Futu News on June 14th announced that this Monday$GOGOX (02246.HK)$announced that it will be listed from June 14th to June 17th, and the company plans to issue 31.2 million shares, including 3.12 million shares for public offering and 28.08 million shares for international offering, with an issue price of HK$21.50 per share and 200 shares per board lot. It is expected to be listed on June 24.

Company Overview

The prospectus shows that GoGoVan is a leading online intra-city logistics platform in Asia, operating in more than 340 cities in five countries and regions in Asia (namely mainland China, Hong Kong, Singapore, South Korea, and India). It owns and operates two highly recognized and trusted brands: GoGoVan in mainland China and GOGOX in other countries and regions in Asia.

According to data from Frost & Sullivan, based on the total transaction volume in 2021,Kuaigou Dache is the third largest online intra-city logistics platform in mainland China with a market share of 3.2%; it is also the market leader in Hong Kong with a market share of 50.9%.According to the same data source, based on the total transaction volume in 2021, mainland China and Hong Kong together account for approximately 71% of the online intra-city logistics market in Asia.

Kuaigou Dache has built a vibrant ecosystem consisting of millions of consignors and drivers. As of December 31 in 2018, 2019, 2020, and 2021, Kuaigou Dache had approximately 14.5 million, 19.8 million, 24 million, and 27.6 million registered consignors, as well as 1.3 million, 3 million, 4.2 million, and 5.2 million registered drivers. In 2018, 2019, 2020, and 2021, there were 32.4 million, 33.4 million, 27.1 million, and 28.4 million consignment orders completed on the platform, generating a total transaction volume of RMB 3356.9 million, RMB 3313 million, RMB 2694.4 million, and RMB 2676.7 million respectively.

Financial SituationIn terms of financials, the total revenue of the company in the years 2018 to 2021 were RMB 453.1 million, RMB 548.5 million, RMB 530.4 million, and RMB 660.9 million respectively, with a compound annual growth rate of 13.40% from 2018 to 2021. The gross profit for the same period was RMB 104.3 million, RMB 173.1 million, RMB 183.4 million, and RMB 241.7 million respectively, with a compound annual growth rate of 32.31% from 2018 to 2021.

Industry FocusThe logistics market in asia has grown rapidly in recent years, with the market size increasing from $309.5 billion in 2017 to $422.9 billion in 2021, with a compound annual growth rate of 8.1% from 2017 to 2021, and is expected to further increase to $658 billion in 2026, with a compound annual growth rate of 9.0% from 2022 to 2026.

Cornerstone investorsOn the other hand, cornerstone investors have agreed, subject to certain conditions and limitations, to subscribe at the offer price or cause their designated entities to subscribe for an aggregate amount of approximately $63.5 million (excluding brokerage commissions, SFC trading levy, SEHK trading fee) for the number of offer shares that can be purchased (rounded down to the nearest whole number of complete buy/sell units closest to 200 shares per board lot). Cornerstone investors will subscribe for a total of 23,173,200 shares at an offer price of HK$21.50, representing approximately 74.3% of the offer shares and about 3.8% of the total issued share capital of the Company after the global offering is completed (assuming no exercise of the over-allotment option). Cornerstone investors include Anhui Chery commercial vehicle and GF Global Capital Limited.

Use of ProceedsOn the other hand, assuming an offer price of HK$21.50 per share and assuming no exercise of the over-allotment option, kuaigou dache estimates that it will receive a net amount of approximately HK$567.3 million from the global offering after deducting the estimated underwriting commission, fees, and expenses payable for the global offering. According to the prospectus, the company intends to use the net proceeds from the share offering for the following purposes:

Approximately 40% of the net proceeds will be used to expand user base and enhance brand awareness, approximately 20% of the net proceeds will be used to develop new services and products to enhance monetization capabilities, approximately 20% of the net proceeds will be used to seek strategic alliances, investments, or acquisitions in overseas markets, approximately 10% of the net proceeds will be used to enhance technological capabilities and research and development capabilities, approximately 10% of the net proceeds will be used for operating capital and general corporate purposes.

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