China's circular packaging service provider ALSCO POOLING has launched its global offering and is expected to list on the main board of the Hong Kong Stock Exchange on March 9, with China Securities (International) Finance Holding Company Limited acting as the sole sponsor for the IPO. Market subscription data indicates strong demand during the Hong Kong public offering segment, with margin financing from securities firms reaching HKD 117.5 billion. Based on a public offering fundraising amount of HKD 28.48 million, the oversubscription rate reached 4124 times. However, gray market performance showed the stock price opening 30% higher before quickly retreating. As of the latest update, the gray market trading price was slightly below the issue price, indicating weak momentum after the initial market enthusiasm faded and revealing early signs of market divergence.
Behind the extreme oversubscription and gray market volatility, the company's offering reveals multiple underlying signals. Combined with issues such as declining net profits, high accounts receivable, a highly fragmented industry lacking solid competitive barriers, and a rush to expand overseas without establishing core competitiveness in the domestic market, multiple operational risks are intertwined, potentially posing significant challenges for its post-listing development.
According to the prospectus, ALSCO POOLING plans to issue 20.34 million shares in its base offering, with an issue price range set at HKD 11 to HKD 14 per share. Gray market information suggests the final issue price was set at the lower end of this range. Notably, while setting the price range, the company also reserved the right to adjust the issue price downward, allowing for a potential 10% reduction to HKD 9.9 per share. Although the company ultimately did not exercise this right, it implies that it may not have secured full confidence and support from institutional investors during the early marketing phase, indicating underlying concerns from the company and its sponsor.
Additionally, ALSCO POOLING did not secure any cornerstone investors. While there have been IPOs in the Hong Kong market without cornerstone investors, for a company with a relatively small market capitalization like ALSCO POOLING, having cornerstone investors could further reduce the free float. From this perspective, the absence of cornerstone investors may have some rationale.
Historically, however, IPOs without cornerstone investors often experience more volatile post-listing share price performance, a characteristic typically related to the nature of the company's industry. Generally, small-cap companies in less prominent sectors with modest fundamentals, coupled with the downward price adjustment option, may reflect insufficient pre-arranged orders from related parties or partners during the international placement, indicating a lack of stable early funding support. It is advisable to monitor whether the company has implemented a greenshoe option, which could be crucial for stabilizing its share price after listing.
The widely discussed oversubscription rate of over 4124 times is closely tied to the company's very small public float. The Hong Kong public offering constituted only 10% of the global offering, corresponding to a fundraising amount of just HKD 28.48 million. The extremely small float size is the primary driver behind the high oversubscription multiple, which does not necessarily reflect strong market confidence in the company's fundamentals.
Leading in Niche Segment but Industry Highly Fragmented with Lack of Core Competitive Barriers In terms of its main business, ALSCO POOLING primarily focuses on the automotive industry, providing circular packaging services mainly to automotive parts manufacturers and OEMs. According to Frost & Sullivan data, based on 2024 revenue, ALSCO POOLING is the second-largest circular packaging service provider in China, with a market share of 1.5%, and leads the automotive shared operation services market with an 8.2% share.
However, its strong position in niche segments cannot掩盖 the highly fragmented nature of the overall industry. In 2024, China's logistics packaging solutions market was valued at USD 118.7 billion, with over 3,500 companies competing. The top five players collectively held only 4.7% of the market, while ALSCO POOLING's share in the overall logistics packaging solutions market was a mere 0.1%. The industry is dominated by logistics companies with self-operated packaging businesses and third-party logistics packaging solution providers, resulting in intense competition. ALSCO POOLING has yet to establish replicable core competitive barriers, posing significant challenges to maintaining and growing its market share.
Revenue Growth Slowing, Profits Declining, Overseas Expansion Adds Risks Amid Unstable Domestic Footing Financially, the company's revenue growth has slowed noticeably, while net profit has continued to decline. From 2022 to 2024, its operating revenue was RMB 648 million, RMB 794 million, and RMB 838 million, respectively, with a three-year compound annual growth rate of approximately 13.7%. However, in the first eight months of 2025, revenue was only RMB 533 million, with year-on-year growth dropping significantly to 5.1%, indicating clearly weakening growth momentum.
Profit performance is even weaker. Net profit attributable to owners for 2022-2024 was RMB 23.7 million, RMB 50.82 million, and RMB 40.11 million, respectively, with a 21.1% decline in 2024. For the first eight months of 2025, net profit fell further to RMB 22.03 million, down 7.8% year-on-year. According to the prospectus, the company expects full-year 2025 net profit to be no less than RMB 40 million. Even if this target is met, performance would still not recover to the 2023 peak level.
More notably, the company's accounts receivable and notes remain persistently high, indicating low capital turnover efficiency and underlying financial risks. From 2022 to 2024 and the first eight months of 2025, accounts receivable and notes were RMB 311 million, RMB 361 million, RMB 382 million, and RMB 325 million, respectively, showing an overall upward trend. The corresponding days sales outstanding were 168 days, 160 days, 168 days, and 169 days, consistently exceeding 160 days.
Regarding the use of IPO proceeds, ALSCO POOLING has allocated 25% of the funds to advance its overseas expansion strategy. However, the company's current overseas revenue contribution is minimal, accounting for only 1.1%, 0.4%, 0.4%, and 0.9% in 2022-2024 and the first eight months of 2025, respectively, indicating an almost non-existent overseas presence. Without establishing core competitiveness domestically in an already highly competitive industry, the company's rush to invest in overseas expansion introduces numerous uncertainties, including local competition, operational model adaptation, and building local teams. The difficulties and high risks associated with overseas expansion further increase the company's operational uncertainty.
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