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HomeForexIPO of Shengfeng Growth: A Contract Logistics Providers Supplier in China -...

IPO of Shengfeng Growth: A Contract Logistics Providers Supplier in China – R Weblog


On this article, we’ll speak about Shengfeng Growth Restricted and its IPO on the NASDAQ, which is because of happen on 23 March. Shengfeng Growth Restricted, a supplier of contract logistics providers in China, is without doubt one of the leaders within the business.

We’ll have a look at the options of the issuer’s enterprise mannequin, the outlook for its addressable market, its fundamental opponents, its monetary scenario, strengths and weaknesses, and the small print of its preliminary public providing.

Shengfeng Growth briefly

Shengfeng Development in brief

Shengfeng Growth Restricted gives contract logistics providers within the Chinese language market. The issuer undertakes the administration of all logistics processes for its shoppers: warehousing, safety, forwarding, customs clearance, transportation of products, and so on. The agency is absolutely chargeable for the storage, packing, and loading of cargo, the collection of the optimum supply route, and the required tools and transport.

Shengfeng Growth Restricted was established in 2001 and registered within the Cayman Islands in 2020 to optimise taxation prices. Its head workplace is in Fuzhou, within the Chinese language Fujian Province. Yongxu Liu is the CEO, having beforehand served as head of the automobile administration division at Shenghui Logistics Group Co., Ltd.

Shengfeng Development Limited’s corporate structure
Shengfeng Growth Restricted’s company construction

Shengfeng Growth Restricted operates in China by way of plenty of subsidiaries. The issuer’s prospects embody greater than 4000 companies, the biggest of that are: JD.com Inc., Modern Amperex Expertise Co., Restricted, Xiaomi Company, Schneider Electrical SE, and Shiny Dairy & Meals Co.

Shengfeng Development Limited’s clients
Shengfeng Growth Restricted’s shoppers

The corporate has been working for 22 years in 341 cities in 31 provinces throughout China, the place it’s working 35 sorting centres, 42 buyer places of work, and a fleet of greater than 600 vehicles.

Shengfeng Development Limited’s clients
Shengfeng Growth Restricted’s shoppers

The China Federation of Logistics & Buying (CFLP) ranked Shengfeng Growth Restricted among the many high fifty transport corporations within the nation. Individually, the CFLP highlighted the issuer’s profitable efficiency through the COVID-19 pandemic.

Outlook for Shengfeng Growth’s addressable market

In response to 360 Market Updates, the worldwide logistics contracting market was estimated at USD 180.1 billion in 2022. It’s anticipated to succeed in USD 242.5 billion in 2028. The projected compound annual progress fee (CAGR) from 2022 to 2028 inclusive is 3.9%.

Foremost opponents:

  • Yunda Holding Firm Restricted
  • Qingdao Zhongchuang United Funding Growth Co.
  • Kerry Logistics Community Restricted
  • YTO Specific Group Co.
  • Quanzhou Ansheng Delivery Co.
  • ZTO Specific (Cayman) Inc.

Shengfeng Growth’s monetary efficiency

Shengfeng Growth Restricted’s 2021 monetary outcomes introduced on Type F-1 present a 9.9% improve in internet revenue, to USD 6.6 million, in comparison with the 2020 statistics. For the primary half of 2022, the determine elevated by 46.9% to USD 2.5 million. From July 2021 to June 2022 inclusive, internet revenue reached USD 7.4 million.

Shengfeng Development Limited's financial results
Shengfeng Growth Restricted’s monetary outcomes

The issuer’s income for 2021 was USD 346.7 million, up 20.6% from the 2020 consequence. For the primary half of 2022, the determine elevated by 1.4% to USD 166.5 million. From July 2021 to June 2022 inclusive, revenues reached USD 348.9 million.

As of 30 June 2022, Shengfeng Growth Restricted’s internet money circulation was damaging and had reached USD 2.4 million. In the identical interval, the corporate had USD 13.9 million in its accounts, with complete liabilities of USD 135.2 million.

Strengths and weaknesses of Shengfeng Growth

Strengths:

  • A promising addressable market
  • A shopper base of standard prospects
  • Certified administration
  • Income progress
  • Growing internet revenue
  • Collaboration with well-known and huge corporations

Weaknesses:

  • Fierce competitors
  • Dependence on the authorized framework of the PRC
  • Dependence on gas costs

What we all know concerning the Shengfeng Growth IPO

The underwriter of the IPO is Univest Securities, LLC. Shengfeng Growth Restricted plans to promote three million odd shares on the supplied common worth of 4.5 USD per unit. Gross proceeds from the sale of the shares will quantity to USD 13.5 million, excluding the sale of choices by the underwriter. Nonetheless, the agency’s market capitalisation may attain USD 185 million.

There’s a risk that the issuer’s P/E a number of (capitalisation/internet revenue) will attain 25, which P/E worth is taken into account extreme for the sector. The issuer’s P/S (capitalisation/revenues) multiplier may attain 0.53. The common P/S of competing logistics corporations is 1.5. By this indicator, the inventory of Shengfeng Growth Restricted has a progress potential of 183% ((1.5/0.53-1)*100%).

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Materials is ready by

Has been out there since 2012. Has the next schooling in finance and economic system. Began buying and selling within the Foreign exchange foreign money market, then acquired within the inventory market, and now makes a speciality of analyzing IPOs and portfolio investments.

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