58 Freight, one of Asia’s biggest logistics carriers, has gotten the green light from the Hong Kong stock exchange to proceed with its listing, the company’s updated prospectus shows.
Why it matters: 58 Freight operates in both the Chinese mainland and the Hong Kong market, known as Kuaigou Dache in the mainland and GoGoX in Hong Kong. GoGoX, formerly known as GoGoVan, is the largest logistics service provider in Hong Kong and merged with 58 Suyun, the freight business unit of Chinese online marketplace 58 Daojia, in August 2017.
- In the mainland market, the company is a distant second to Lalamove in the on-demand logistics sector with just a 5.5% market share, compared to Lalamove’s 54.7% share, according to market research firm Frost & Sullivan.
Details: The company has received approval from the Hong Kong stock exchange for its initial public offering (IPO) with CICC, UBS, BOCOM International, and ABC International acting as underwriters on the deal, according to an updated prospectus released on Feb. 6.
- The company said it has more than 26.5 million registered users with a pool of nearly 5 million drivers as of September 2021. To compare, Lalamove stated that more than 20 million people used its services with over 3 million drivers as of March 2018.
- The company’s revenue increased 27% year-on-year to RMB 473 million ($74.4 million) for the first nine months of 2021, with a gross profit margin of 36%, an increase of 1.4% from the previous year. Its net losses reached RMB 660 million in 2020.
- 58 Daojia currently own a 51% stake of GoGoX. Alibaba’s online marketplace Taobao is the third largest shareholder with a 13% stake in the company, according to its prospectus.
Context: Lalamove initially weighed a $1 billion US IPO in June last year, but later shifted the listing plan to Hong Kong as the Chinese government tightens rules for technology companies listing overseas, Bloomberg reported.
- Another competitor of 58 Freight, Full Truck Alliance, went public in June 2021 and raised $1.6 billion on the New York stock exchange, just a week before the US listing of Chinese ride-hailing giant Didi. In July of the same year, Beijing launched a cybersecurity investigation into Full Truck Alliance’s logistics platforms.