Logistics start-up GoGoX's steps up Hong Kong IPO plan with investor education process after receiving HKEX approval

GoGoX, an Asian app-based logistics services provider, has started an investor education process for its initial public offering, according to a source familiar with the transaction. The IPO is reportedly targeting between US$400 million and US$500 million.

The loss-making start-up updated its preliminary prospectus on the Hong Kong Exchanges and Clearing’s website on Sunday after getting approval for its listing plan late last week, the source said, who is not authorised to speak publicly about the deal. The news was reported earlier by other mainland media on Monday.

If the pre-marketing goes smoothly, GoGoX plans to proceed with the IPO’s bookbuilding process and retail offering later this month, the source said. He, however, added that the timing could still change as it is subject to prevailing market conditions.

“We incurred [a] net loss … because our intracity logistics business is at its early stage and we have made substantial investments to drive the growth of our business,” the company said in the preliminary prospectus.

GoGoX is an Asian intracity logistic platform operating in over 340 cities. Photo: Handout

GoGoX, which operates under the brand name Kuaigou Dache on the mainland, expects to remain loss-making up to 2024, it said in the document. For the nine months ended September 2021, GoGoX’s net loss stood at 392.8 million yuan (US$61.8 million).

The joint sponsors of the deal are CICC, UBS, Bocom International and ABC International. They were not immediately available for comment on Monday.

GoGoX’s plans come as investors’ appetite for IPOs globally has been tempered by poor stock market performances in January. The Hang Seng Index gained just 1.7 per cent last month, the slowest start to a year since 2020. In the US, the Nasdaq Composite had its worst month in two years as the tech-heavy index lost 9.5 per cent in January.

In Hong Kong, there were just four IPOs last month, which raised a combined US$747.9 million versus 15 deals worth a total of US$7.6 billion a year earlier, data from Refinitiv shows.

A successful IPO by GoGoX might encourage others, such as its Hong Kong-based rival Lalamove, to switch its planned IPO to the city after it reportedly abandoned its original US listing plan last year.

The parent of GoGoX, 58 Daojia, currently owns 50.5 per cent of the Beijing-headquartered firm. Other shareholders include Alibaba Group Holding and its subsidiaries e-commerce platform Taobao China, logistics arm Cainiao Smart Logistics Network and Alibaba Hong Kong Entrepreneurs Fund, which together own a combined 15.8 per cent. Alibaba owns the Post.

Apart from China, GoGoX also operates in Hong Kong, Singapore, Korea and India under the GoGoX brand. It operates in over 340 cities in Asia, and claims to have 5.5 per cent and 52.8 per cent share of the Chinese and Hong Kong market, respectively, in terms of gross transaction volume.

Unlike other express delivery couriers, GoGoX fulfils delivery orders by matching drivers with shippers on its platform. The company does not hire drivers as its employees or owns the vans the drivers use.

For servicing individuals and small businesses, GoGoX generates revenue from charging drivers service fees for using its platform to complete logistics services. For servicing larger enterprises, it charges the companies a fee.

GoGoX plans to use the net proceeds raised to expand its user base, strengthen its brand, develop new services and tech capabilities.