F-1/A: Haoxin Holdings Limited Announces Initial Public Offering of Class A Ordinary Shares

Haoxin Holdings Limited is set to launch its initial public offering of 1,750,000 Class A ordinary shares, aiming for a Nasdaq listing under the ticker HXHX.

Summary

• Haoxin Holdings Limited, a Cayman Islands-based company, is planning an initial public offering (IPO) of 1,750,000 Class A ordinary shares.
• The expected offering price is between $4.00 and $6.00 per share.
• The company has applied to list its Class A ordinary shares on the Nasdaq Capital Market under the symbol HXHX, but completion of the offering is contingent on Nasdaq approval.
• Haoxin Holdings has a dual-class share structure with Class A shares carrying one vote and Class B shares carrying twenty votes.
• The company's operations are primarily located in the PRC, making it subject to legal and operational risks associated with doing business in China, including regulatory changes and government intervention.
• The company submitted initial filing materials to the CSRC on June 16, 2023, and received notification of completion on June 28, 2024.
• The audit report included in the prospectus is issued by Marcum Asia CPAs LLP, a U.S.-based accounting firm registered with the PCAOB.
• The company intends to use the offering proceeds for new vehicle purchases, IT systems upgrades, working capital, and potential acquisitions and alliances.

Sentiment

Score: 6

Explanation: The document presents a balanced view, highlighting both the company's strengths and the risks associated with its operations and the IPO. The forward-looking statements are tempered by cautionary language, resulting in a neutral to slightly positive sentiment.

Positives

• The company has over 21 years of experience in the transportation industry.
• The company has been recognized and accredited by the China Federation of Logistics and Purchasing as a 3A-Grade transportation service provider.
• The company operates a truckload fleet with 88 tractors, 94 trailers and 46 vans.
• The company uses a digitized management system with advanced vehicle GPS positioning and real-time temperature monitoring.
• The company has implemented safety systems and warning systems on each vehicle to reduce likelihood of accident.

Negatives

• The company's operations are subject to legal and operational risks associated with operations in China.
• PRC laws and regulations governing the company's business operations are sometimes vague and uncertain.
• The Chinese government exerts substantial influence over, and may intervene at any time in, the manner in which the company must conduct its business activities.
• The company may face difficulties enforcing their legal rights under United States securities laws against us or our directors and officers who are located outside of the United States.
• The company is a holding company, and will rely on dividends paid by its subsidiaries for its cash needs.
• The company is dependent on subcontractors.
• The company operates in a competitive industry.
• The company faces risks related to the products it transports.
• The company may not have sufficient insurance coverage.
• The company faces risks related to its dual class share structure.
• There is no established public market for the company's shares prior to this offering.
• The company's management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance the company's results of operations or the price of its Class A ordinary shares.
• Nasdaq may apply additional and more stringent criteria for the company's initial and continued listing because the company plans to have a small public offering and insiders will hold a large portion of the company's listed securities.

Risks

• New regulations and government oversight in China could adversely affect the company.
• Future government control over foreign offerings of China-based companies could hinder the company's ability to offer securities.
• Uncertainties in the interpretation and enforcement of Chinese laws could limit legal protections.
• Limitations on the ability to receive dividends from PRC subsidiaries could affect the company's cash needs.
• The company may be required to obtain permissions from PRC authorities to issue ordinary shares to foreign investors.
• Adverse changes in China's economic, political, or social conditions could affect the company's operations.
• The company may face difficulties in enforcing foreign judgments or bringing actions against the company's management in China and Hong Kong.
• PRC regulations on loans to and direct investment in PRC entities by offshore holding companies may affect the company's ability to fund its operations.
• Fluctuations in exchange rates could have a material adverse effect on the company's results of operations and share price.
• Governmental control of currency conversion may limit the company's ability to utilize its net revenues effectively.
• Certain PRC regulations may make it more difficult for the company to pursue growth through acquisitions.
• PRC regulations on the establishment of offshore special purpose companies by PRC residents may affect the company's operations.
• The company may be classified as a PRC resident enterprise for PRC income tax purposes, resulting in unfavorable tax consequences.
• The company may be unable to have U.S. regulatory bodies conduct investigations or inspections of its operations in China.
• The company's ability to pay dividends may be limited.
• The company is dependent on subcontractors.
• The company may lose business to competitors or customers developing their own solutions.
• The company faces risks related to the products it transports.
• The company may not have sufficient insurance coverage.
• The company's internal controls may be ineffective.
• The company's dual class share structure concentrates voting control.
• There may not be an active trading market for the company's shares.
• The company's management has broad discretion in the use of the offering proceeds.
• Nasdaq may apply additional listing criteria due to the small public offering and large insider holdings.

Future Outlook

The company aims to capture additional market share by leveraging its strengths and implementing strategies to expand its fleet, install urban delivery services, expand its business in the cold chain industry, establish cold storage and warehouse, establish a platform of logistics supply chain management system, provide supply chain financial services, strengthen its information technology systems, continue to attract, train and retain skilled employees to support future growth and expansion, further expansion into new markets by enhancing its sales and marketing efforts, maintain stable relationships with its major customers and suppliers and expand its customer base, and acquire and invest in strategic entities.

Management Comments

• Our mission is to become the most reliable and sustainable transportation company that specialize in temperature-controlled truckload services in China by offering punctual, cost-effective, capable and intelligent transportation services, while maintaining a sizeable fleet of transportation vehicles of our own as well as reliable subcontracting arrangements.

Industry Context

The document highlights the growth potential of the temperature-controlled truckload service market in China, which is expected to increase from RMB 547 billion in 2024 to RMB 747 billion in 2027, representing a CAGR of 8.1 percent. The document also notes that the transportation industry is highly impacted by China economic activities and that the COVID-19 pandemic slows down the economic activities in China and shock our industry.

Comparison to Industry Standards

• The document mentions that the average in the United States and Japan is one refrigerated truck for every 1,000 people, while in China it is one refrigerated truck for every 4,760 people.
• The document mentions that the per capital temperature-controlled storage in developed countries is almost 3-4 times that of China.

Related Party Transactions

• The document discloses various related party transactions, including loans, payments, and guarantees involving the company's officers, directors, and their affiliated entities.

Stakeholder Impact

• Shareholders: Dilution of ownership for new investors; potential for capital appreciation.
• Employees: Potential for job creation and career advancement due to company growth.
• Customers: Improved service quality and expanded service offerings.
• Suppliers: Increased business opportunities due to company expansion.
• Creditors: Increased financial stability and ability to repay debts.

Next Steps

• Obtain Nasdaq approval for listing.
• Complete the filing procedure with the CSRC.
• Remit the offering proceeds to the PRC.
• Implement the intended use of proceeds for fleet expansion, IT upgrades, working capital, and strategic acquisitions.

Key Dates