F-1: Kepler Group Files for Nasdaq IPO, Targets $6M Raise

Kepler Group Limited, a Hong Kong-based insurance brokerage, is seeking to raise up to $6 million in its initial public offering on the Nasdaq Capital Market to fund expansion into Southeast Asia and digital platform development.

Summary

• Kepler Group Limited is offering 1,400,000 ordinary shares, with an expected price range of $4.00 to $6.00 per share, for its initial public offering on the Nasdaq Capital Market under the symbol KPL.
• The company operates primarily in Hong Kong through its subsidiaries, Equator Asset Protection Limited, Kepler Global Advisors Limited, and Kepler Innovative Technology Limited, focusing on insurance brokerage, immigration, and software services.
• For the year ended March 31, 2025, revenue increased by 9.60% to HK$157.4 million (US$20.3 million) from HK$143.6 million in 2024.
• Gross profit grew by 22.36% to HK$21.1 million (US$2.7 million) in 2025 from HK$17.3 million in 2024, with the gross profit margin improving from 12.01% to 13.41%.
• Profit for the year, however, decreased by 17.27% to HK$6.6 million (US$0.85 million) in 2025 from HK$8.0 million in 2024, primarily due to increased administrative and listing expenses.
• Life insurance products accounted for approximately 95.0% of total revenue in 2025, demonstrating a strong focus on this segment.
• The company plans to use net proceeds for expansion into Southeast Asia (15%), expanding product offerings and marketing (25%), developing an integrated digital platform (35%), recruitment (10%), and general corporate purposes (balance).
• Mr. Kwok Yu Hin, the Director and CEO, will own 63.7% of the total voting power post-offering, making Kepler Group a controlled company under Nasdaq rules, which may allow it to rely on certain corporate governance exemptions.
• The company is subject to significant risks related to its Hong Kong operations, potential Chinese government oversight, and compliance with U.S. regulations like the HFCA Act regarding PCAOB auditor inspections.

Sentiment

Score: 5

Explanation: The company shows strong revenue and gross profit growth, and has clear strategic expansion plans. However, a notable decline in net profit for the most recent year, coupled with significant regulatory, geopolitical, and market-related risks, balances the positive aspects, leading to a neutral sentiment.

Positives

• Revenue increased by 9.60% to HK$157.4 million in 2025, indicating business growth.
• Gross profit increased by 22.36% to HK$21.1 million in 2025, with an improved gross profit margin of 13.41% (up from 12.01% in 2024).
• Immigration services income saw substantial growth, increasing by 33.39% to HK$7.4 million in 2025 due to a rise in successful cases.
• The company has a strong network of 28 insurance companies and over 220 Channels (Referrers and Consultants) in Hong Kong.
• Management team possesses extensive experience in the insurance brokerage industry, with the CEO having over 19 years of experience.
• Strategic plans include expanding into new geographic markets in Southeast Asia (Malaysia, Singapore, Thailand, Vietnam, Japan, Taiwan) and enhancing efficiency through an integrated digital platform.
• The company's auditor, Onestop Assurance PAC, is headquartered in Singapore and is currently inspected by the PCAOB, mitigating immediate HFCA Act concerns.

Negatives

• Profit for the year decreased by 17.27% to HK$6.6 million in 2025, despite revenue growth, primarily due to higher administrative and listing expenses.
• Administrative expenses increased significantly by 32.18% to HK$18.1 million in 2025, driven by increased staff costs and listing expenses.
• Key management personnel salaries and MPF contributions increased by 467.80% to HK$1.16 million in 2025, contributing to higher administrative costs.
• The company's effective tax rate for 2025 was 22.70% due to non-tax deductible listing expenses.
• Historical dividends have been paid to Mr. Kwok Yu Hin, the controlling shareholder, and not to all shareholders, and there are no current intentions to distribute further earnings.
• The company will be a controlled company post-offering, potentially relying on Nasdaq exemptions from certain corporate governance requirements, which may afford less protection to minority shareholders.

Risks

• Fluctuations in operating results may occur due to market acceptance of services and the ability to introduce new services.
• Reliance on the management team and Channels (Referrers and Consultants) for operations, with competition for talent being fierce.
• Dependence on business relationships with a select group of Insurance Companies, with the top five accounting for a significant portion of revenue (74.7% in 2025).
• Exposure to risks associated with compliance standards in Hong Kong, including potential changes in regulations and the need for license renewals.
• Challenges in successfully implementing future plans, particularly expansion into Southeast Asia, due to lack of experience in those markets and potential difficulties in recruiting local Channels.
• Operating in a highly competitive industry with established competitors, which could lead to price reductions and erosion of market share.
• Business performance is closely tied to the macro-economic situation in Hong Kong and the economic, social, and political development of the PRC.
• Uncertainty regarding the interpretation and application of laws and regulations in China (PRC), including cybersecurity review and regulatory review of overseas listings, which could impact operations or share value.
• Potential for the Chinese government to exercise significant oversight and discretion over business conduct, leading to material changes in operations or hindering the ability to offer securities.
• Risk of delisting from Nasdaq under the Holding Foreign Companies Accountable Act (HFCA Act) if the PCAOB is unable to inspect the company's auditors for two consecutive years.
• No public market for ordinary shares prior to this offering, and an active public market may not develop or be sustained, leading to price volatility.
• Increased costs as a public company, particularly after ceasing to qualify as an emerging growth company.
• Immediate and substantial dilution in book value for new investors purchasing ordinary shares in this offering.
• Difficulty for investors to enforce judgments against the company, its directors, and management due to incorporation in the Cayman Islands and officers residing outside the U.S.
• Differences in corporate law between the Cayman Islands and the United States may afford less protection to minority shareholders.

Future Outlook

Kepler Group plans to expand its insurance brokerage distribution network into Southeast Asia, including Singapore, Malaysia, Thailand, Vietnam, Japan, and Taiwan, within three to five years, starting with a branch office in Singapore within the next 12 months. The company also intends to expand its product offerings to include investment and asset management services and offshore Renminbi products, and will develop an integrated digital platform to enhance business efficiency and customer service quality. Management anticipates these initiatives will drive future sales growth and operational improvements.

Management Comments

• Our Directors are confident in our ability to continue achieving market acceptance for our services.
• We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future.
• Our management team has extensive industry knowledge and project experience in insurance brokerage service, immigration services and software upgrade and maintenance service.
• We have established a stable customer base comprising private high worth networks and individuals that require tailor-made insurance products and/or other insurance products or services.
• We have established long-standing and close working relationships with our major insurance companies.
• We believe that our strong in-house training program, which covers both product knowledge and sales skills, gives us a competitive edge over the other professional insurance intermediaries and helps us retain our sales force and improve our sales.
• Our Directors anticipate that the expenditure required for establishing our business presence in Singapore will be approximately US$500,000.
• The estimated cost for setting up new service centers in countries such as Vietnam and Thailand will be approximately US$250,000.
• Our Directors anticipate that the costs for expanding our product offerings will be approximately US$1.25 million, including US$1.0 million on developing investment and asset management services and licenses, and US$250,000 on offshore Renminbi products.
• Our Directors anticipate that the costs for developing and launching the integrated digital platform will be approximately US$1.75 million, including US$1.2 million on development, US$50,000 on regulatory approval, and US$500,000 on launching and promotion.

Industry Context

The Hong Kong insurance brokerage industry has shown robust growth, with total revenue increasing at a CAGR of 14.6% from HKD21.0 billion in 2020 to HKD36.3 billion in 2024, and is projected to reach HKD59.0 billion by 2029 (CAGR of 10.2%). Key drivers include the application of advanced technology, widespread adoption of mobile apps, increasing demand from Mainland Chinese customers, and rising health awareness. The Southeast Asian insurance industry is also experiencing substantial growth, with gross premiums growing at a CAGR of 10.2% over the past five years and projected to reach HKD1,547.7 billion by 2029 (CAGR of 8.5%). Kepler Group's expansion plans align with these regional growth trends, while its digital platform development addresses the industry's digital transformation.

Comparison to Industry Standards

• Kepler Group ranked around 5th in the 2nd Tier among all insurance brokerage companies in Hong Kong in terms of revenue in 2024, indicating a strong position within its segment.
• The company's gross profit margin of 13.41% in 2025 is a positive indicator of efficiency compared to its revenue growth.
• The Hong Kong insurance brokerage market is largely composed of small and medium-sized businesses, with the top 20 companies holding approximately 40% market share. Kepler Group's position within the 2nd Tier suggests it is a significant player among smaller firms.
• The industry is highly competitive, with competition based on service quality, market reputation, business networks, and pricing. Kepler Group emphasizes its premium brokerage service experience, experienced management, stable relationships with insurance companies, and commitment to training as competitive strengths.

Management Changes

Corporate Governance

Legal Proceedings

• Currently not a party to, and not aware of any threat of, any legal or administrative proceedings that are likely to have any material adverse effect on the business, financial condition, cash-flow or results of operations.

Related Party Transactions

• For the year ended March 31, 2024, HK$8,982,807 in commission expenses were paid to Yean Limited, a company controlled by the spouse of Mr. King Yeung Alvin Tam (a Director).
• For the year ended March 31, 2025, HK$661,514 in commission expenses were paid to Mr. King Yeung Alvin Tam (a Director).
• For the year ended March 31, 2024, Kepler Global Advisors Limited paid a dividend of HK$2,735,688 to Mr. Kwok Yu Hin (Director and CEO).
• For the year ended March 31, 2025, the company paid interim and special dividends totaling HK$3,277,462 to Mr. Kwok Yu Hin.
• As of March 31, 2024, there were amounts due from related companies (Kepler Group Limited (BVI) and Kepler Galaxy Culture and Entertainment Media Co. Limited) totaling HK$44,805, which were non-trade, unsecured, interest-free, and repayable on demand.
• As of March 31, 2024, there were commission payables of HK$333,378 to Yean Limited.
• Money advances from third parties (included in other payables) were interest-bearing at 3.375% to 3.5% in 2025 (1% in 2024) and were fully repaid in August 2025.
• Bank borrowings are personally guaranteed by Mr. Kwok Yu Hin and Ms. Chow Shui Yan (former director of a subsidiary).

Stakeholder Impact

• Shareholders: Will experience immediate and substantial dilution in book value due to the IPO pricing. Minority shareholders may have less protection due to the company's controlled company and foreign private issuer status. The value of shares could be significantly affected by regulatory changes in Hong Kong/China and U.S. delisting risks.
• Employees: The company plans to recruit additional personnel for expansion, potentially creating new employment opportunities. Remuneration policy includes salary, discretionary bonuses, and MPF contributions.
• Customers (Policyholders): The company aims to expand product offerings and enhance service quality through a new digital platform, potentially benefiting customers with more diverse options and efficient processes. The company is legally required to act in the interest of policyholders.
• Suppliers (Insurance Companies and Channels): The company relies on stable relationships with 28 insurance companies and over 220 Channels. Expansion plans include developing new relationships in Southeast Asia, potentially increasing business for new partners.
• Creditors: Bank borrowings are personally guaranteed by directors, providing some security. The company's liquidity is deemed adequate to meet operational and expansion requirements for the next 12 months.

Next Steps

• Complete the initial public offering and list ordinary shares on the Nasdaq Capital Market under the symbol KPL.
• Open a branch office in Singapore within the next 12 months, obtain the requisite insurance brokerage license, and establish relationships with local insurance companies.
• Establish new service centers in countries such as Vietnam and Thailand, subject to local regulations.
• Expand product offerings to include investment and asset management services, and obtain necessary licenses.
• Develop and launch an integrated digital platform to streamline the contract and document signing process, with a current plan to launch in approximately six months.
• Recruit additional personnel for the expansion of operations.
• Develop and implement significant policies and governance procedures related to risk management, such as a related party transactions policy and an enterprise risk management framework, as a public company.

Key Dates

Keywords

Insurance Brokerage, Hong Kong, IPO, Nasdaq, Kepler Group, Financial Services, Life Insurance, Southeast Asia Expansion, SEC F-1, PCAOB, HFCA Act, Controlled Company, Immigration Services, Digital Platform