Hello, I'm Lu Xian. I research the investment field and share overseas information.

The previous post shared about BinHua Group. Today, let's look at a logistics company from Singapore - Yongkang Holdings. The company mainly operates empty container depots, providing storage, loading/unloading, maintenance, and transportation services for shipping companies and container leasing companies. The business isn't trendy, but it has been consistently profitable. The focus is on its industry position, revenue decline, and the share issuance structure without cornerstone investors.

1. IPO Overview

Company Name: Yongkang Holdings Limited (02523.HK)

Global Offering Shares: 51.60 million shares

Hong Kong Public Offering Shares: 5.16 million shares

International Offering Shares: 46.44 million shares

Offer Price: HK$2.20—HK$2.68

Board Lot: 2,000 shares

Minimum Subscription Fee: HK$5,414.05

Cornerstone Investors: None

Greenshoe: Yes

Sponsors: Hua Fu Jian Ye Enterprise Finance, Tong Ren Finance

Reallocation Mechanism: Mechanism B

Subscription Period: June 30 — July 8

Allotment Results Announcement: July 9

Grey Market Trading Time: July 10, 16:15-18:30

Listing Date: July 13

Market Capitalization: Approximately HK$965 million — HK$1.175 billion

Group A Tail: 900 board lots

Group B Head: 1,000 board lots

Top Hammer: 1,290 board lots

2. Company Fundamental Analysis

The core business of Yongkang Holdings is empty container depots. After cargo is unloaded, empty containers need temporary storage, maintenance, and dispatch. The company provides these services near ports, while also operating warehousing, freight forwarding, and container sales.

Based on 2025 container throughput, the company is Singapore's largest container depot operator with a 16.2% market share; it ranks second in Southeast Asia with a 5.9% market share. The company currently operates 18 depots in Singapore, China, Hong Kong, Malaysia, Thailand, and Vietnam, with a total usable area of about 590,000 square meters, capable of storing approximately 87,000 TEUs.

From 2023 to 2025, the company's revenue was SGD 156 million, SGD 165 million, and SGD 149 million respectively; net profit was SGD 8.37 million, SGD 11.62 million, and SGD 13.27 million respectively. In 2025, revenue decreased by 9.6%, while net profit increased by 14.2%, mainly related to reduced administrative expenses and improved gross profit margin of core business.

Gross profit margin for the same period was 30.2%, 26.2%, and 29.5% respectively, and net profit margin increased from 5.4% to 8.9%. After excluding items such as listing expenses, the adjusted net profit for 2025 was SGD 17.95 million, with an adjusted net profit margin of 12%.

Container depot business contributed SGD 109 million in revenue in 2025, accounting for 73.2% of total revenue. However, this part of revenue has declined continuously from SGD 118 million in 2023. Revenue from warehousing and container freight stations also decreased from SGD 15.46 million to SGD 4.93 million, indicating insufficient growth in traditional business.

The company's cash flow is relatively stable, with operating cash flow exceeding SGD 23 million in the past three years. In 2025, the top five customers accounted for 26.3% of revenue, with the largest customer accounting for 9.5%, indicating customer concentration is not high.

Future growth mainly relies on the Singapore Mega Depot project. After completion, the project is expected to have a storage capacity of 23,000 TEUs, but the total investment is about SGD 138 million, far exceeding the fundraising scale of this IPO, with most funds still relying on bank financing.

Risks mainly come from global trade and land leasing. Tariffs, route adjustments, and declining trade volumes will affect container demand. Most depots use leased land, and rent increases, inability to renew leases, or government land acquisition may also affect operations.

In terms of valuation, the company's market capitalization is about HK$965 million to HK$1.175 billion. Based on 2025 net profit, the P/E ratio is about 12 to 15 times; based on adjusted net profit, it's about 9 to 11 times, which is not high. However, the company's revenue has already declined, so we cannot only look at current profits.

3. IPO Subscription Analysis and My Action

The advantages of Yongkang Holdings are that it is already profitable, has stable cash flow, and holds a certain position in the Singapore and Southeast Asian markets. The company's market capitalization is less than HK$1.2 billion, the initial Hong Kong public offering is only 2,580 board lots, and the minimum subscription fee per board lot is about HK$5,400, meaning very few public shares are available. The one-lot winning rate is estimated to be less than 1%, with all Group A and Group B applications subject to balloting.

The disadvantages are the lack of cornerstone investors and an average sponsor lineup. Although there is a greenshoe, listing expenses are about SGD 4.7 million, accounting for about 22.5% of the estimated total fundraising amount, indicating relatively high financing costs. Revenue declined in 2025, and the core depot business also showed no significant growth.

After the conversion of pre-IPO convertible notes, related investors will hold about 18.4% of the post-listing shares. The company also needs to invest significant funds in the Mega Depot project, indicating significant growth.

After the conversion of pre-IPO convertible notes, related investors will hold about 18.4% of the post-listing shares. The company also needs to invest significant funds in the Mega Depot project, and subsequent financing pressure needs attention.

Overall, Yongkang Holdings is a small-cap, low-float, already profitable IPO, and its valuation is not expensive. However, revenue decline and large project capital expenditures limit its appeal. Although the company's fundamentals are average, small-cap stocks are all about excitement. As long as the main players want to play, there is also the possibility of a sharp surge. If you have spare money, you can try for one lot, but the winning rate is too low, as subscriptions have already exceeded 3600 times.

My action: I will not subscribe.

$EKH(02523.HK)