F-1/A: New Century Logistics Eyes Nasdaq Listing with Proposed IPO

New Century Logistics (BVI) Limited plans to offer 1,250,000 ordinary shares in an initial public offering, aiming for a Nasdaq Capital Market listing.

Summary

• New Century Logistics (BVI) Limited is planning an initial public offering of 1,250,000 ordinary shares.
• The company intends to list its shares on the Nasdaq Capital Market under the ticker symbol NCEW.
• The expected offering price is between $4.00 and $5.00 per share.
• Craft Capital Management LLC is the underwriter for the offering.
• The company has granted the underwriter an option to purchase up to an additional 15% of the ordinary shares.
• The company intends to use the proceeds for business expansion, technology innovation, enhancing warehousing and distribution capabilities, recruitment, and general working capital.
• The offering is contingent upon final approval from Nasdaq for listing.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While the company is pursuing an IPO and has plans for growth, there are significant risks and uncertainties related to its operations, regulatory environment, and financial performance.

Positives

• The company has a clear plan for utilizing the IPO proceeds to grow the business.
• The company has secured an underwriter for the offering.
• The company is seeking to list on a major U.S. stock exchange.

Negatives

• The offering is contingent on Nasdaq approval, which is not guaranteed.
• There is no assurance that the offering will close or that the shares will trade on the Nasdaq Capital Market.
• The company is subject to uncertainty about any future actions of the PRC government or authorities in Hong Kong.

Risks

• The company's operations in Hong Kong are subject to political and regulatory risks related to the PRC government.
• The company may be prohibited from trading on a national exchange under the Holding Foreign Companies Accountable Act if the PCAOB cannot inspect its auditors.
• The company is an emerging growth company and may take advantage of reduced reporting requirements.
• The company relies on dividends from its subsidiaries to fund cash requirements.
• The company operates in a highly competitive industry.
• The company's revenues are subject to seasonal fluctuations.
• The company is dependent on a limited number of vendors.
• The company may be subject to cyber-attacks and data breaches.

Future Outlook

The revenue of air freight forwarding services in Hong Kong is estimated to increase with its gradually resumed merchandise trade, 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 considered a highly fragmented market with a large number of small and medium-sized players.

Comparison to Industry Standards

• Tier-one freight forwarders are generally the global leading mega logistics groups with worldwide logistics network and business coverage.
• Tier-two freight forwarders are generally local and regional players with networks covering certain focused logistic locations and categories of goods.
• Examples of tier-one freight forwarders include Company A (a global logistics company based in Switzerland), Company B (a global transport and logistics service provider based in Denmark), Company C (a multinational logistics company), Company D (a subsidiary of a German multinational package delivery and supply chain management company), and Company E (a global logistics company based in Seattle).
• Examples of tier-two freight forwarders include Company F, Company G, Company H, and Company I.

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).
• 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

• On December 1, 2022, the Company entered into a facility letter with a shareholder, Sin Yuk Hung to offer facility of up to HK$2 million ($256,410).
• On December 22, 2022, the Company entered into a loan and sale and purchase agreement with Ngan Ching Shun and Asia International Securities Exchange Co., Ltd (AISE), pursuant to which AISE acquired 21% shareholding in the Company from Mr. Ngan and as part of the Agreement, AISE agreed to lend the Company up to the amount of $2 million in order to finance the expenses of the offering.

Stakeholder Impact

• Shareholders may experience dilution due to the issuance of new shares.
• Shareholders are subject to risks related to the company's operations in Hong Kong and its relationship with the PRC government.
• Employees may benefit from the company's plans to recruit talented personnel.
• Customers may benefit from the company's plans to enhance warehousing and distribution capabilities.

Next Steps

• Obtain final approval from Nasdaq for listing on the Nasdaq Capital Market.
• Close the offering and begin trading on the Nasdaq Capital Market.
• Implement the planned use of proceeds for business expansion, technology innovation, and other initiatives.

Key Dates

Keywords

IPO, initial public offering, Nasdaq, New Century Logistics, Craft Capital Management, ordinary shares, freight forwarding, logistics, Hong Kong