F-1/A: Zenta Group Targets Nasdaq Listing with $6.75 Million IPO, Pivoting to Fintech Amid Macau Property Downturn

Zenta Group Company Limited, a Macau-based professional services provider, is seeking to raise $6.75 million in its initial public offering on the Nasdaq Capital Market, shifting its strategic focus towards rapidly growing fintech services following a decline in its traditional industrial park consultation business.

Summary

• Zenta Group Company Limited (ZGCL), a Cayman Islands holding company, is offering 1,500,000 Ordinary Shares in its initial public offering, representing 12.95% of its outstanding shares post-offering.
• The expected offering price is between $4 and $5 per share, with a midpoint of $4.50, aiming to raise approximately $6.75 million in gross proceeds.
• Net proceeds from the offering are estimated at approximately $5.06 million after deducting underwriting discounts and estimated offering expenses.
• Planned use of net proceeds includes 20% for business growth in Macau, Hong Kong, and Southeast Asia, 40% for fintech business development, 10% for brand development and team expansion, and the balance for working capital and general corporate purposes.
• The company's revenue significantly increased by 135.26% year-over-year to $2,030,855 for the fiscal year ended September 30, 2024, up from $863,228 in FY2023.
• Net income for FY2024 grew by 90.37% to $798,716, compared to $419,558 in FY2023.
• For the six months ended March 31, 2025, total revenues surged by 474.9% to $1,926,008 from $335,000 in the prior-year period, with net income reaching $789,391 compared to a net loss of $157,825.
• Fintech services, particularly algorithm and big data models, became the primary revenue driver, accounting for 67.6% of total revenue in FY2024 and 93.7% in the six months ended March 31, 2025, a significant shift from nil revenue in FY2023.
• The industrial park consultation business experienced a material impact, completing no projects in FY2024 due to pressure in the property markets of Mainland China and Macau, where investments in office buildings and commercial premises dropped by 9.0% and 13.9% year-over-year, respectively.
• The company acquired ownership of a set of fintech platform products (2 fintech platforms and 6 AI models) from its supplier, Guo Yan, on August 5, 2024.
• Ng Wai Ian, the controlling shareholder, will beneficially own 53.35% of the total issued and outstanding shares and voting power post-offering, making ZGCL a controlled company under Nasdaq Stock Market Rules.
• The company is subject to various risks related to operating in Macau and potential PRC government oversight, despite currently not requiring specific permissions for its U.S. listing or operations.

Sentiment

Score: 7

Explanation: The company shows strong revenue and net income growth, driven by a successful pivot to fintech, which is a high-growth sector. The IPO will provide significant capital for future expansion. However, the company faces substantial risks related to its concentration in Macau/China, regulatory uncertainties, customer concentration, and a decline in its traditional business segment. The cash position has also decreased, and there is immediate dilution for new investors. The overall sentiment is positive due to the strong financial performance and strategic shift, but tempered by the inherent risks of operating in the region and the early stage of the new business model's full impact.

Positives

• Total revenues increased significantly by 135.26% year-over-year to $2,030,855 for the fiscal year ended September 30, 2024, and by 474.9% to $1,926,008 for the six months ended March 31, 2025.
• Net income for FY2024 increased by 90.37% to $798,716, and the company turned a net loss of $157,825 in 6M March 2024 into a net income of $789,391 in 6M March 2025.
• The fintech business segment demonstrated strong growth, accounting for 70.5% of FY2024 revenue and 94.9% of 6M March 2025 revenue, indicating successful diversification and strategic pivot.
• The acquisition of proprietary fintech platform products (2 platforms, 6 AI models) in August 2024 enhances the company's technological capabilities and reduces reliance on third-party suppliers for certain fintech services.
• The company plans to expand its market position into Southeast Asian countries, indicating a proactive strategy for international growth beyond Macau and China.
• The company has a strong local resource network in Macau, including partnerships with local businesses and government, and its CEO founded the Macau International Investment Association.
• The company's management team possesses extensive experience in artificial intelligence, strategic consulting, investment management, and financial services, supporting its strategic direction.

Negatives

• The industrial park consultation services business experienced a significant decline, completing no projects in FY2024 compared to 8 projects in FY2023, due to pressure in the property markets of Mainland China and Macau.
• The company recorded a net cash outflow from operating activities of $340,501 for FY2024 and $394,542 for 6M March 2024, despite overall revenue growth.
• Cash and cash equivalents decreased from $524,383 as of September 30, 2023, to $327,111 as of September 30, 2024, and further to $188,486 as of March 31, 2025.
• The company had a working capital deficit of $26,893 as of September 30, 2024.
• The company is subject to customer concentration risk, with its top 5 customers accounting for 95.8% of total revenues in FY2024 and 88% in 6M March 2025.
• Historically, the company relied significantly on related party transactions for revenue, although this dependence decreased in FY2024, it still accounted for 3.3% of total revenue.
• The company does not intend to pay dividends in the near future, meaning investors may only see a return through share price appreciation.

Risks

• The Chinese government may exercise significant oversight and discretion over the conduct of business in Macau and intervene in operations at any time, potentially resulting in material changes to operations and/or the value of Ordinary Shares.
• Uncertainty exists regarding the interpretation and application of PRC laws and regulations, which could change rapidly with little advance notice and impact the company's operations or ability to offer securities.
• If the Chinese government expands the scope of cybersecurity reviews or foreign securities offering reviews to include the company, it could significantly limit or hinder operations and cause the value of securities to decline or become worthless.
• The company is subject to Macau laws and regulations concerning data security and anti-monopoly, and future violations or changes in interpretation could impact business.
• Reliance on key management and professional staff poses a risk, as the loss of such personnel may affect operations due to intense competition for talent.
• Any lack of requisite approvals, licenses, or permits, or non-compliance with relevant laws and regulations, may have a material adverse effect on the business.
• Supplier concentration in the fintech business, particularly with Guo Yan, exposes the company to significant performance risk if the supplier relationship is lost or interrupted.
• Failure to keep fintech services technology updated as the industry evolves may materially and adversely affect growth, revenues, and business prospects.
• The company may not be able to protect its intellectual property rights, including unregistered trademarks, copyrights, and patents, which could harm its reputation and business.
• Fintech products are vulnerable to cyber-attacks, which could adversely affect reputation, customer base, and business.
• Failure to protect customer data and privacy could materially and adversely affect reputation, financial condition, and results of operations.
• The company is subject to risks from potential violations of obligations and standards, including fraud, illegal acts, or misconduct by directors, employees, or third parties.
• The non-recurring nature of consultation business revenue makes profitability highly unpredictable, and the absence of long-term exclusive service agreements makes future results difficult to predict.
• Deterioration in clients' financial condition or slow fee settlements may adversely affect cash flows, working capital, and financial results.
• Pressure on service fees due to decreased demand or increased competition could materially and adversely affect business and profitability.
• Property development projects in industrial parks may not complete on time or at all, adversely affecting industrial park consultation business and reputation.
• Inability to identify or help clients acquire desired development sites at commercially reasonable costs could lead to client dissatisfaction and harm business.
• Economic volatility and market uncertainty, particularly in the industrial property sector, may impact demand for services and profitability.
• Uncertainty exists regarding the recognition and enforcement of U.S. court judgments in Macau, potentially making it difficult for investors to enforce civil liabilities.
• As a holding company, reliance on dividends and distributions from Macau subsidiaries means any limitation by Macau or PRC government on cash transfers could materially and adversely affect the ability to fund operations or pay dividends.
• There has been no public market for Ordinary Shares prior to this offering, and a liquid trading market may not develop or be sustained.
• Failure to meet applicable Nasdaq listing requirements could result in delisting, reducing liquidity and market price.
• Substantial future sales or perceived sales of Ordinary Shares by pre-IPO shareholders could cause the share price to decline.
• New investors will incur immediate and substantial dilution in the book value of their shares.
• The controlling shareholder, Ng Wai Ian, will have significant voting power (53.35%), potentially taking actions not in the best interests of other shareholders.
• Management has broad discretion over the use of IPO proceeds, which may not enhance results of operations or share price.
• The company will incur increased costs as a public company, particularly after ceasing to qualify as an emerging growth company.
• The market price of Ordinary Shares may be volatile or decline regardless of operating performance due to various factors beyond the company's control.

Future Outlook

The company plans to continue strengthening its industrial park and business investment consultation services while significantly increasing its focus and resources on fintech products and services, aiming for fintech to become one of its largest business segments. Future strategies include developing proprietary fintech solutions, potentially integrated with AI, expanding into Southeast Asian markets through acquisitions or partnerships, and enhancing brand recognition through marketing activities. The company aims to focus on providing marketing and risk control solutions to banks and financial institutions using AI and big data technology, with a future plan to develop solutions for the tourism industry.

Management Comments

• We believe that fintech products, with potential integration with AI, will offer us a large and promising development opportunity in terms of demand and market potential.
• By integrating consulting services with fintech services, we can differentiate ourselves from competitors and establish a higher brand value in the industry.
• We plan to continue strengthening our industrial park and business investment consultation services, while at the same time increasing our focus and resources for our fintech products and services.
• We believe that fintech services business will eventually become one of the largest business segments for our Company in the future.
• We are committed to playing an active role in the economic development of Macau and contributing to its prosperity.
• We believe that our culture of innovation and collaboration is a significant driving force in our growth, led by our founders and management team.
• We believe that a stronger consulting team will help improve our project execution capabilities, provide quality services to clients, and maintain effective systems and controls to ensure our compliance with relevant rules and regulations.
• We are not aware of any information or arrangement which would lead to a cessation or termination of our relationship with any of our clients.
• We are not aware of any information or arrangement which would lead to a cessation or termination of our relationship with Guo Yan (key supplier).

Industry Context

The company operates within the rapidly developing business investment consultation and industrial park consultation industries in China and Macau, which are influenced by regulatory reforms, technological innovation, and evolving client demands. The industrial park sector faces pressure from declining real estate investments in Mainland China and Macau. The fintech sector, particularly in banking and finance, is experiencing significant growth in the Asia-Pacific region, driven by digital payments, big data, AI, and supportive government policies like Macau's '1+4 strategy' and GBA fintech cooperation initiatives. The market for industrial park consultation is fragmented with over 1,000 participants, while business investment consultation is dominated by state-owned and large private enterprises. The company's pivot to fintech aligns with broader industry trends of digital transformation and increased demand for AI/big data solutions in financial services.

Comparison to Industry Standards

• The industrial park consultation services industry in China is highly fragmented with over 1,000 market participants, including major international players like CBRE, Jones Lang LaSalle, Savills, Cushman & Wakefield, and Colliers International. The company operates in this competitive landscape, focusing on pre-development stage services.
• China's business investment consultation industry is dominated by state-owned enterprises and large private enterprises (e.g., subsidiaries of major commercial and investment banks, securities companies) that offer a full array of financial service licenses. The company, as a smaller firm, focuses on general consultation and M&A for consultancy/brokerage fees, not requiring financial service licenses for securities trading advice.
• In the fintech sector, the company's focus on marketing and risk control solutions for banks and financial institutions using AI and big data technology aligns with global trends, with comparable solutions offered by companies like Alkami (Data & Marketing Solutions), Q2 Holdings (Data Driven Marketing platform), and nCino (Credit and Non-Credit Onboarding Platform) in the USA.
• The Asia-Pacific fintech market is estimated at US$147.69 billion in 2024, projected to reach US$310.88 billion by 2029 (CAGR >16%), indicating a high-growth environment for the company's new strategic focus.
• China and India are noted as the largest markets for digital payments, with China approaching a cashless society (over 80% daily consumption via mobile platforms), generating vast big data that drives demand for fintech services, providing a strong market backdrop for the company's fintech pivot.

Management Changes

Corporate Governance

Legal Proceedings

• As of the date of this prospectus, the company is not a party to, and is not aware of any threat of, any legal proceeding that is likely to have a material adverse effect on its business, financial condition, or operations.

Related Party Transactions

• Administrative services fees of $33,708 were received from Ione Group Company Limited (a shareholder) for the six months ended March 31, 2025, and $67,113 for the fiscal year ended September 30, 2024.
• Compensation and benefits totaling $92,359 were paid to Ng Wai Ian (controlling party), Sou Weng Seng (controlling party), Chan Kong Pan (Chief Strategy Officer), and Ieong Fong Hang (Chief Financial Officer) for the six months ended March 31, 2025.
• As of March 31, 2025, $372,115 was due from Ione Group Company Limited (a shareholder) as an advance for operational purposes, which was unsecured, non-interest bearing, and repayable on demand, and has since been settled.
• As of September 30, 2024, $369,050 was due to Ione Group Company Limited (a shareholder) as an advance for operational purposes, which was unsecured, non-interest bearing, and repayable on demand.
• Project research fees of $63,838 were received from Bay Area Macau Industrial Investment Company Limited (under significant influence of Chan Kong Pan) for the fiscal year ended September 30, 2023.
• Bank charges of $35 were paid on behalf of Zenta Investment Company Limited (controlled by Sou Weng Seng) for the fiscal year ended September 30, 2023, and were subsequently settled.

Stakeholder Impact

• **Shareholders**: New investors will experience immediate and substantial dilution. Existing shareholders, particularly the controlling shareholder, will retain significant voting power. The IPO aims to provide liquidity and potentially increase share value, but future sales by pre-IPO shareholders could cause price declines. No dividends are expected in the near future.
• **Employees**: The company plans to strengthen its teams through recruitment and team expansion, particularly in fintech, which could lead to new employment opportunities and career development. Compensation and benefits are expected to increase with the hiring of independent directors.
• **Customers**: The company aims to provide enhanced and diversified services, especially in fintech, potentially offering more integrated solutions. The shift in business focus may mean less emphasis on traditional industrial park consultation for some clients, but new fintech offerings could attract new customer segments.
• **Suppliers**: The company's reliance on a key fintech supplier (Guo Yan) for certain products and maintenance services means the supplier's performance and relationship are critical to the company's operations.
• **Creditors**: The company's liquidity needs are expected to be met by IPO proceeds and potential future equity financing from major shareholders, which could improve its ability to satisfy liabilities.

Next Steps

• Complete the initial public offering and list Ordinary Shares on the Nasdaq Capital Market under the symbol ZGM.
• Allocate approximately 20% of net IPO proceeds for growing business in Macau, Hong Kong, and Southeast Asia.
• Allocate approximately 40% of net IPO proceeds for developing the fintech business, including proprietary solutions and potential acquisitions.
• Allocate approximately 10% of net IPO proceeds for brand development and team expansion.
• Utilize the balance of IPO proceeds for working capital and other general corporate purposes.
• Recruit more experienced professionals (project managers, licensed representatives) to strengthen industrial park and business investment consultation teams.
• Begin operations on post-development stage services (investment and operation services) through its subsidiary LMS, subject to timing of industrial park projects.
• Develop proprietary fintech solutions and platforms, potentially integrated with AI, through its subsidiary LFT.
• Acquire fintech solution companies and/or recruit technical staff with relevant experience in fintech development.
• Expand market position in international markets, particularly Southeast Asian countries, through acquisitions, cooperation with local financial institutions, or establishing offices.
• Strengthen marketing and public relations activities, such as organizing seminars, training sessions, workshops, and forums in Macau, Hong Kong, and China.

Key Dates

Recommendation

Zenta Group is undergoing a significant business transformation, successfully pivoting towards high-growth fintech services, as evidenced by substantial revenue and net income increases in recent periods. The IPO provides crucial capital for this strategic shift and international expansion. However, the company is still in the early stages of fully realizing its fintech potential, and its traditional business has declined. Significant risks remain, particularly those associated with regulatory uncertainty in Macau/China, customer concentration, and the inherent volatility of a newly public company with a controlling shareholder. While the growth trajectory is promising, the speculative nature of the investment and the need for the new strategy to prove sustainable profitability warrant a 'hold' recommendation for seasoned investors, allowing for further observation of execution and risk mitigation.

Keywords

Fintech, Consulting Services, Macau, China, IPO, Nasdaq, Artificial Intelligence, Big Data, Industrial Park Consultation, Business Investment, SEC Filing, F-1/A, Cross-border Investment, Corporate Governance, Risk Management