De Well Holdings Limited, a provider of cross-border logistics solutions, submitted an application for a listing to the Hong Kong Stock Exchange (HKEx) on Wednesday night, with Citigroup and CICC as co-sponsors.
The firm said that this fundraising plan is intended to expand its global network and strengthen its regional share in major markets. In addition, the funds will be used to enhance the company’s integrated supply chain services and solutions, and to invest in technologies.
De Well Holdings’ prospectus shows that it is an end-to-end cross-border supply chain services provider. It offers integrated, digital and customized solutions to meet the differentiated needs of customers all over the world. Its scope includes freight services and performance value-added services.
According to Frost & Sullivan, De Well Holdings was the largest Chinese end-to-end cross-border supply chain solutions and services provider in the Asia-North America trade lanes in terms of revenue in 2021.
The firm’s prospectus also shows revenue of $292 million in 2019, $382 million in 2020 and $1.131 billion in 2021. Profits during the same reporting period were $1.774 million in 2019, $7.345 million in 2020 and $9.733 million in 2021. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were $9.992 million in 2019, $20.852 million in 2020 and $182 million in 2021. Non-IFRS net profits during the three years was $1.774 million, $7.345 million and $125 million, respectively.
It is worth mentioning that on September 14, 2021, the company received an investment of $67.2255 million from Cainiao, a major Chinese logistics company. Cainiao is an indirect non-wholly owned subsidiary of domestic tech giant Alibaba. As of the reporting date of the prospectus, Cainiao owned 29.50% of the issued shares in De Well Holdings.
In terms of potential risks, De Well Holdings stated in its prospectus that business depends on service providers, including sea and air carriers, and if operating costs increase or partnerships fail, it may adversely affect the company’s financial performance. Moreover, customer demand is difficult to predict, which may impact the company’s profit margin and operating performance, together with the influence of fierce competition within the industry.