F-1/A: New Century Logistics (BVI) Limited Eyes Nasdaq Listing with $5.6 Million IPO

New Century Logistics (BVI) Limited, a Hong Kong-based freight forwarding service provider, is planning an initial public offering of 1,250,000 ordinary shares, aiming to list on the Nasdaq Capital Market under the symbol NCEW.

Summary

• New Century Logistics (BVI) Limited is planning an IPO of 1,250,000 ordinary shares.
• The expected offering price is between $4.0 and $5.0 per share, potentially raising approximately $5.6 million.
• The company intends to list its ordinary shares on the Nasdaq Capital Market under the symbol NCEW.
• The offering is contingent upon final approval from Nasdaq for listing.
• NC Logistics is a holding company with operations conducted through its Hong Kong subsidiaries: New Century Logistics Company Limited (NCL (HK)), GLF Cargo Services Limited (GLF), and Win-Tec Transportation Company Limited (Win-Tec).
• The company provides air and ocean freight forwarding services to over 140 countries.
• For the year ended September 30, 2023, the company's total revenue was approximately $36.1 million, compared to $75.2 million in 2022.
• The company plans to use the IPO proceeds for business expansion, technology innovation, enhancing warehousing and distribution capabilities, recruitment, and general working capital.
• The underwriter is Eddid Securities USA.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While the IPO plan and potential for growth are positive, the significant revenue decline and various risk factors temper the overall outlook.

Positives

• The company has a long-standing history in the freight forwarding industry, tracing back to 2002.
• NC Logistics offers routes to over 140 countries, demonstrating a broad service network.
• The company intends to use the IPO proceeds for growth initiatives, including technology innovation and expanding warehousing capabilities.

Negatives

• The company's revenue decreased significantly from $75.2 million in 2022 to $36.1 million in 2023.
• The company operates in a highly competitive and fragmented industry.
• The company is subject to regulatory risks associated with operating in Hong Kong, including potential intervention by the PRC government.

Risks

• The company's revenues, operating income, and cash flows are likely to fluctuate.
• The company relies on a limited number of vendors.
• The company may be subject to cyber-attacks and data breaches.
• The company operates in a highly competitive industry.
• The company's results of operations are affected by international trading volumes and global economic conditions.
• There is uncertainty about future actions of the PRC government or authorities in Hong Kong.
• The company's Ordinary Shares may be prohibited from trading on a national exchange or over-the-counter market under the Holding Foreign Companies Accountable Act (the HFCA Act) if the Public Company Accounting Oversight Board (United States) (the PCAOB) is unable to inspect our auditors for three consecutive years.

Future Outlook

The company expects to remain an international airfreight gateway and anticipates growth in revenue, climbing from HK$68.5 billion in 2023 to HK$78.2 billion in 2027, at a CAGR of 3.4%.

Industry Context

The freight forwarding market in Hong Kong is highly fragmented with a large number of small and medium-sized players. The company faces competition from both tier-one global logistics groups and tier-two local and regional players.

Comparison to Industry Standards

• The company competes with large organizations such as Sinotrans Shipping Ltd, DSV Global Transport and Logistics, and DHL Global Forwarding.
• These competitors offer niche services that are the same or similar to services or products offered by one or more of our segments; and small firms and independent contractors that focus on specialized services.
• Some of our competitors have significantly more financial resources, a larger national or international presence, larger professional staffs and greater brand recognition than we do.
• Some have lower overhead and other costs and can compete through lower cost-service offerings.

Legal Proceedings

• The company filed a lawsuit against a PRC customer who defaulted in its payments owing to the Company of approximately U.S. $345,680 (HK$2.7 million).
• Based on the final rulings from the relevant courts, the PRC customer was ordered, among others, to repay the outstanding trade receivables in the amount of approximately U.S. $345,680 (HK$2.7 million) owed to the Company.
• The PRC customer since then has declared bankruptcy and the Company has decided to not pursue the enforcement against the PRC customer.

Related Party Transactions

• Loan advanced to related party Sin Yuk Hung
• Loan received from related party Asia International Securities Exchange Co., Limited
• Due (to) from related parties Lam Shing Kwan Henry, Ngan Ching Shun, Ng Yi To Peter

Stakeholder Impact

• Shareholders: Potential for capital appreciation if the company successfully executes its growth strategy.
• Employees: Potential for new job opportunities and career advancement as the company expands.
• Customers: Potential for improved services and expanded offerings as the company invests in technology and infrastructure.

Next Steps

• Obtain final approval from Nasdaq for listing.
• Complete the offering and begin trading on the Nasdaq Capital Market.
• Implement plans for business expansion, technology innovation, and infrastructure improvements.

Key Dates

Keywords

freight forwarding, logistics, IPO, Nasdaq, Hong Kong, ordinary shares, supply chain, air freight, ocean freight, warehousing