Hongxing Logistics Faces CSRC Scrutiny Over IPO Shareholder Identification

Hongxing Logistics, a leading cold chain logistics company, has been asked by the China Securities Regulatory Commission (CSRC) to provide a clear and definitive opinion on the identification of its controlling shareholder as part of its planned initial public offering (IPO) on the Hong Kong Stock Exchange. The CSRC has requested that Hongxing Logistics clarify the inconsistent results in its filing materials regarding the identification of the controlling shareholder, as well as the standards used for this identification. This request comes as part of the regulatory process for Hongxing Logistics' planned IPO.

The CSRC's request is based on the relationship between Hongxing Group, Hongri Jingming, and Hongri Mingsheng, which are all part of the same group of companies. The regulatory body has asked Hongxing Logistics to explain the reasons for the inconsistent results in its filing materials and to provide a clear and definitive opinion on the identification of the controlling shareholder. This request is part of the regulatory process for Hongxing Logistics' planned IPO on the Hong Kong Stock Exchange.

The CSRC has also requested that Hongxing Logistics provide additional information regarding new shareholders who acquired company shares at a price of zero. The regulatory body has asked for the pricing basis and compliance of these transactions. Additionally, the CSRC has requested information on the company's and its subsidiaries' business scope, which includes real estate leasing, property management, housing leasing, non-residential real estate leasing, and enhanced telecommunications services. The CSRC has asked for details on whether these businesses are actually being conducted and if the necessary qualifications and permits have been obtained. The regulatory body has also requested information on the revenue and profit share of these businesses, as well as their compliance with relevant regulations.

Furthermore, the CSRC has asked Hongxing Logistics to provide information on whether the company's and its subsidiaries' business scope and actual operations involve foreign investment restrictions or prohibitions. The regulatory body has also requested information on whether the company's IPO and "full circulation" plans comply with foreign investment entry policies before and after the IPO. Additionally, the CSRC has asked for details on the IPO plan, including the par value per share, the number of shares to be issued (including oversubscription), the proportion of the total issued shares, and the expected amount of funds to be raised. The regulatory body has also requested a table showing the changes in the company's shareholding structure before and after the IPO, assuming that the oversubscription option is fully exercised.

The CSRC has also requested information on whether the company and its subsidiaries are involved in the development and operation of APPs, mini-programs, and public accounts. The regulatory body has asked for details on whether these products collect and use personal information, and if so, the scale of user information collected and stored, as well as the data collection and usage situation. Additionally, the CSRC has requested information on whether the shares held by shareholders participating in the "full circulation" plan are subject to any pledges, freezes, or other defects.

Hongxing Logistics is a leading cold chain food trading and cold storage service comprehensive service platform. According to a report by Zhenwei Consulting, in 2024, the company's cold chain food trading services achieved a transaction value of approximately 400 billion yuan, ranking second among all cold chain food trading service providers in central China and first in Hunan Province. Additionally, according to the same source, based on 2024 revenue, the company is the largest cold storage service provider in central China and Hunan Province.

Specifically, in the past three years of 2022, 2023, and 2024, Hongxing Logistics' operating income was 237 million, 202 million, and 234 million yuan, respectively, with a compound annual growth rate of -0.67%. The corresponding net profits were 79 million, 75 million, and 83 million yuan, respectively, with a compound annual growth rate of 2.35%. The company attributed the increase in revenue to the completion and operation of the fifth phase project's cold storage facilities and the increase in store rental prices.