IPO Pricing | 'Frozen Food Storage Service Provider' Red Star Cold Chain goes public today with over 2300x subscription, priced at HK$12.26 per share, pre-market trading yields over HK$2900 per lot

Futu Insights, January 13th update, $HX COLDCHAIN (01641.HK)$ Announced the allocation results, priced at HK$12.26 per share, issuing a total of 23.263 million shares, 500 shares per lot, officially listed today.

In the last trading session, Red Star Cold Chain's pre-market trading closed up 47.39%, at HK$18.07 per share, 500 shares per lot, without counting fees, earning HK$2905 per lot.

During the public offering phase, Red Star Cold Chain was subscribed 2309.25 times, with the final number of shares offered to the public being 2.3265 million shares, accounting for approximately 10% of the total offering shares. A total of about 103,100 valid applications were received, with about 4653 processed applications, and the percentage of allocated shares to total applied shares for one-lot applicants is approximately 1%.

Moreover, during the international placement phase, Red Star Cold Chain received 1.65 times subscription, with the final number of international placement shares being 20.9365 million shares, accounting for 90% of the total offering shares. Futu Information has compiled the relevant data in the following table:

Company Profile

Red Star Cold Chain is a provider of frozen food warehousing services and rental services for frozen food stores, headquartered in Changsha, Hunan Province. The company primarily offers frozen food warehousing services. Since its establishment in 2006, the company has developed a business model that combines food cold storage with the leasing of frozen food retail spaces, enabling it to connect wholesalers and retailers within the frozen food supply chain. Regarding its frozen food warehousing services, the company provides cold storage capacity and related warehouse management services (such as sorting, categorizing, packaging, inventory counting and tracking, and inbound/outbound record-keeping), as well as fire safety and environmental risk management to wholesalers and retailers of frozen foods, who pay the company for these warehousing services. In terms of its frozen food store rental services, the company mainly rents out store spaces to frozen food wholesalers and retailers for conducting frozen food trading businesses. The company charges store rental fees, including monthly rent and a monthly premium, which largely depends on the specific location of the store.

Financial Overview

In terms of financial performance, the company generated revenues of RMB 236.7 million, RMB 201.8 million, RMB 233.6 million, RMB 112.3 million, and RMB 118.0 million for the years 2022, 2023, 2024, and the six months ended June 30, 2024, and 2025, respectively. The corresponding gross profit margins were 50.1%, 57.7%, 52.8%, 54.2%, and 53.3% for the same periods.

For the years 2022, 2023, 2024, and the six months ended June 30, 2024, and 2025, the company's net profits were RMB 79.1 million, RMB 75.3 million, RMB 82.9 million, RMB 41.3 million, and RMB 39.7 million, respectively. The corresponding net profit margins were 33.4%, 37.3%, 35.5%, 36.7%, and 33.6% for the same periods.

Use of Proceeds

Regarding the use of proceeds, Red Star Cold Chain’s global offering raised net proceeds of approximately HKD 252 million (based on an offer price of HKD 12.26). According to the prospectus, Red Star Cold Chain intends to use the proceeds from the global offering for the following purposes:

Approximately 57.5% of the net proceeds will be used over the next four years to construct a new processing plant and expand the frozen food warehousing facilities, equipped with processing equipment and systems. Approximately 12.8% of the net proceeds will be allocated to upgrading the equipment, IT infrastructure, and software used in the company’s existing operations. Around 19.7% of the net proceeds will be utilized to pursue strategic acquisitions and partnerships over the next four years. About 10.0% of the net proceeds will serve as working capital and for other general corporate purposes.

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Editor/Afina

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