{"id":16312,"date":"2023-05-31T14:16:27","date_gmt":"2023-05-31T18:16:27","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/ipo-update-chi-ko-holdings-readies-8-million-u-s-ipo-pendingckhl\/"},"modified":"2023-05-31T14:16:28","modified_gmt":"2023-05-31T18:16:28","slug":"ipo-update-chi-ko-holdings-readies-8-million-u-s-ipo-pendingckhl","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=16312","title":{"rendered":"IPO Update: Chi Ko Holdings Readies $8 Million U.S. IPO (Pending:CKHL)"},"content":{"rendered":"<div data-test-id=\"content-container\">\n<p><figure class=\"getty-figure\" data-type=\"getty-image\"><picture>  <\/picture><figcaption> <\/figcaption><\/figure>\n<\/p>\n<h2>A Quick Take On Chi Ko Holdings Limited<\/h2>\n<p>Chi Ko Holdings Limited (CKHL) has filed to raise $7.8 million in an IPO of its ordinary shares, according to an amended F-1\/A registration statement.<\/p>\n<p>The firm provides construction<span class=\"paywall-full-content invisible\"> contracting services in Hong Kong.<\/span><\/p>\n<p class=\"paywall-full-content invisible\">Given CKHL\u2019s slowing revenue growth rate, reduced net margin and ongoing risks from operating in the PRC, I&#8217;m on Hold for the IPO.<\/p>\n<h2 class=\"paywall-full-content invisible\">Chi Ko Overview<\/h2>\n<p class=\"paywall-full-content invisible\">Hong Kong, PRC-based Chi Ko Holdings Limited was founded to provide site formation, general building construction and demolition services to commercial and residential properties located in the greater Hong Kong region.<\/p>\n<p class=\"paywall-full-content invisible\">Management is headed by Chief Executive Officer Mr. Chan Lee Chuen, who has been with the firm since 2021 and has nearly thirty years of experience in various types of construction engineering in Hong Kong.<\/p>\n<p class=\"paywall-full-content invisible\">The company\u2019s primary<span class=\"paywall-full-content invisible no-summary-bullets\"> offerings include the following:<\/span><\/p>\n<ul class=\"paywall-full-content invisible no-summary-bullets\">\n<li>\n<p>Foundation and site formation<\/p>\n<\/li>\n<li>\n<p>General building work<\/p>\n<\/li>\n<li>\n<p>Demolition<\/p>\n<\/li>\n<\/ul>\n<p class=\"paywall-full-content invisible no-summary-bullets\">As of March 31, 2022, Chi Ko has booked fair market value investment of $2 million in equity and debt from investors, including Chairman Mr. Keung Yun Yuen.<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">Chi Ko &#8211; Customer Acquisition<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The firm bids on new projects in both residential and commercial sectors in the greater Hong Kong region.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The company pursues a &#8216;one-stop shop strategy&#8217; to provide a wide range of services either in-house or through hired subcontractors.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">General &amp; Administrative expenses as a percentage of total revenue have fluctuated as revenues have increased, as the figures below indicate:<\/p>\n<p> <span class=\"table-responsive paywall-full-content invisible no-summary-bullets\"><span class=\"table-scroll-wrapper\"><span data-intersection-boundary=\"start\"><\/span><\/p>\n<table>\n<colgroup>\n<col>\n<col> <\/colgroup>\n<tr>\n<td>\n<p><strong>General &amp; Administrative<\/strong><\/p>\n<\/td>\n<td>\n<p><strong>Expenses vs. Revenue<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Period<\/p>\n<\/td>\n<td>\n<p>Percentage<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Six Mos. Ended September 30, 2022<\/p>\n<\/td>\n<td>\n<p>1.7%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2022<\/p>\n<\/td>\n<td>\n<p>2.2%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2021<\/p>\n<\/td>\n<td>\n<p>2.0%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n<p> <span data-intersection-boundary=\"end\"><\/span><\/span><button class=\"table-enlarge-button\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 16 16\" class=\"table-enlarge-icon\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 11a5 5 0 0 1-5 5H5a5 5 0 0 1-5-5V5a5 5 0 0 1 5-5h6a5 5 0 0 1 5 5v6zm-4.5-2.5h2v-6h-6v2h4v4zm-9-1h2v4h4v2h-6v-6z\"><\/path><\/svg>Click to enlarge<\/button><\/span> <\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">(Source &#8211; SEC)<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The General &amp; Administrative efficiency multiple, defined as how many dollars of additional new revenue are generated by each dollar of General &amp; Administrative expense, fell to 11.9x in the most recent reporting period, meaning the company has become less efficient at generating additional revenue, as shown in the table below:<\/p>\n<p> <span class=\"table-responsive paywall-full-content invisible no-summary-bullets\"><span class=\"table-scroll-wrapper\"><span data-intersection-boundary=\"start\"><\/span><\/p>\n<table>\n<colgroup>\n<col>\n<col> <\/colgroup>\n<tr>\n<td>\n<p><strong>General &amp; Administrative<\/strong><\/p>\n<\/td>\n<td>\n<p><strong>Efficiency Rate<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Period<\/p>\n<\/td>\n<td>\n<p>Multiple<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Six Mos. Ended September 30, 2022<\/p>\n<\/td>\n<td>\n<p>11.9<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2022<\/p>\n<\/td>\n<td>\n<p>21.1<\/p>\n<\/td>\n<\/tr>\n<\/table>\n<p> <span data-intersection-boundary=\"end\"><\/span><\/span><button class=\"table-enlarge-button\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 16 16\" class=\"table-enlarge-icon\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 11a5 5 0 0 1-5 5H5a5 5 0 0 1-5-5V5a5 5 0 0 1 5-5h6a5 5 0 0 1 5 5v6zm-4.5-2.5h2v-6h-6v2h4v4zm-9-1h2v4h4v2h-6v-6z\"><\/path><\/svg>Click to enlarge<\/button><\/span> <\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">(Source &#8211; SEC)<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">Chi Ko\u2019s Market &amp; Competition<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\">According to a 2023 market research report by GlobalData, the Hong Kong market for construction services was an estimated $31.3 billion in 2022.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The market is forecast to grow at an Average Annual Grow Rate [AAGR] of over 2% from 2024 to 2027.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The main drivers for this expected growth are a further investment in &#8216;transportation, electricity, housing and industrial sectors.&#8217;<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Also, the government is planning a large increase in investment in the construction of renewable energy and completion of projects &#8216;to upgrade and expand university healthcare teaching facilities&#8230;&#8217;<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The Hong Kong construction services market is extremely fragmented, with hundreds of registered companies of all sizes resulting in a generally high degree of bidding competition.<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">Chi Ko Holdings Limited Financial Performance<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The company\u2019s recent financial results can be summarized as follows:<\/p>\n<ul class=\"paywall-full-content invisible no-summary-bullets\">\n<li>\n<p>Growing top-line revenue but at a reduced rate of growth<\/p>\n<\/li>\n<li>\n<p>Decreasing gross profit and reduced gross margin<\/p>\n<\/li>\n<li>\n<p>Higher operating profit<\/p>\n<\/li>\n<li>\n<p>Uneven cash flow from operations<\/p>\n<\/li>\n<\/ul>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Below are relevant financial results derived from the firm\u2019s registration statement:<\/p>\n<p> <span class=\"table-responsive paywall-full-content invisible no-summary-bullets\"><span class=\"table-scroll-wrapper\"><span data-intersection-boundary=\"start\"><\/span><\/p>\n<table>\n<colgroup>\n<col>\n<col>\n<col> <\/colgroup>\n<tr>\n<td>\n<p><strong>Total Revenue<\/strong><\/p>\n<\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p>Period<\/p>\n<\/td>\n<td>\n<p>Total Revenue<\/p>\n<\/td>\n<td>\n<p>% Variance vs. Prior<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Six Mos. Ended September 30, 2022<\/p>\n<\/td>\n<td>\n<p>$ 35,017,951<\/p>\n<\/td>\n<td>\n<p>25.9%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2022<\/p>\n<\/td>\n<td>\n<p>$ 60,724,303<\/p>\n<\/td>\n<td>\n<p>87.4%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2021<\/p>\n<\/td>\n<td>\n<p>$ 32,395,056<\/p>\n<\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td> <\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p><strong>Gross Profit (Loss)<\/strong><\/p>\n<\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p>Period<\/p>\n<\/td>\n<td>\n<p>Gross Profit (Loss)<\/p>\n<\/td>\n<td>\n<p>% Variance vs. Prior<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Six Mos. Ended September 30, 2022<\/p>\n<\/td>\n<td>\n<p>$ 3,375,974<\/p>\n<\/td>\n<td>\n<p>-3.8%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2022<\/p>\n<\/td>\n<td>\n<p>$ 5,949,838<\/p>\n<\/td>\n<td>\n<p>35.1%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2021<\/p>\n<\/td>\n<td>\n<p>$ 4,403,583<\/p>\n<\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td> <\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p><strong>Gross Margin<\/strong><\/p>\n<\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p>Period<\/p>\n<\/td>\n<td>\n<p>Gross Margin<\/p>\n<\/td>\n<td>\n<p>% Variance vs. Prior<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Six Mos. Ended September 30, 2022<\/p>\n<\/td>\n<td>\n<p>9.64%<\/p>\n<\/td>\n<td>\n<p>-3.0%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2022<\/p>\n<\/td>\n<td>\n<p>9.80%<\/p>\n<\/td>\n<td>\n<p>-27.9%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2021<\/p>\n<\/td>\n<td>\n<p>13.59%<\/p>\n<\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td> <\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p><strong>Operating Profit (Loss)<\/strong><\/p>\n<\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p>Period<\/p>\n<\/td>\n<td>\n<p>Operating Profit (Loss)<\/p>\n<\/td>\n<td>\n<p>Operating Margin<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Six Mos. Ended September 30, 2022<\/p>\n<\/td>\n<td>\n<p>$ 2,770,548<\/p>\n<\/td>\n<td>\n<p>7.9%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2022<\/p>\n<\/td>\n<td>\n<p>$ 4,609,527<\/p>\n<\/td>\n<td>\n<p>7.6%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2021<\/p>\n<\/td>\n<td>\n<p>$ 3,771,359<\/p>\n<\/td>\n<td>\n<p>11.6%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td> <\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p><strong>Net Income (Loss)<\/strong><\/p>\n<\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p>Period<\/p>\n<\/td>\n<td>\n<p>Net Income (Loss)<\/p>\n<\/td>\n<td>\n<p>Net Margin<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Six Mos. Ended September 30, 2022<\/p>\n<\/td>\n<td>\n<p>$ 2,297,079<\/p>\n<\/td>\n<td>\n<p>6.6%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2022<\/p>\n<\/td>\n<td>\n<p>$ 3,769,428<\/p>\n<\/td>\n<td>\n<p>10.8%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2021<\/p>\n<\/td>\n<td>\n<p>$ 3,290,181<\/p>\n<\/td>\n<td>\n<p>9.4%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td> <\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p><strong>Cash Flow From Operations<\/strong><\/p>\n<\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p>Period<\/p>\n<\/td>\n<td>\n<p>Cash Flow From Operations<\/p>\n<\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p>Six Mos. Ended September 30, 2022<\/p>\n<\/td>\n<td>\n<p>$ 1,237,018<\/p>\n<\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2022<\/p>\n<\/td>\n<td>\n<p>$ 661,261<\/p>\n<\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p>FYE March 31, 2021<\/p>\n<\/td>\n<td>\n<p>$ 1,628,876<\/p>\n<\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td> <\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<tr>\n<td>\n<p>(Glossary Of Terms)<\/p>\n<\/td>\n<td> <\/td>\n<td> <\/td>\n<\/tr>\n<\/table>\n<p> <span data-intersection-boundary=\"end\"><\/span><\/span><button class=\"table-enlarge-button\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 16 16\" class=\"table-enlarge-icon\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 11a5 5 0 0 1-5 5H5a5 5 0 0 1-5-5V5a5 5 0 0 1 5-5h6a5 5 0 0 1 5 5v6zm-4.5-2.5h2v-6h-6v2h4v4zm-9-1h2v4h4v2h-6v-6z\"><\/path><\/svg>Click to enlarge<\/button><\/span> <\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">(Source &#8211; SEC)<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">As of September 30, 2022, Chi Ko had $2.3 million in cash and $24.5 million in total liabilities.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Free cash flow during the twelve months ending September 30, 2022, was $4.0 million.<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">Chi Ko\u2019s IPO Details<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\">CKHL intends to sell 1.74 million shares of common stock at a proposed midpoint price of $4.50 per share for gross proceeds of approximately $7.83 million, not including the sale of customary underwriter options.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">No existing or potentially new shareholders have indicated an interest in purchasing shares at the IPO price.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Assuming a successful IPO at the midpoint of the proposed price range, the company\u2019s enterprise value at IPO (excluding underwriter options) would approximate $55.7 million.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The float to outstanding shares ratio (excluding underwriter options) will be approximately 13.39%. A figure under 10% is generally considered a \u2018low float\u2019 stock which can be subject to significant price volatility.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">As a foreign private issuer, the company can choose to take advantage of reduced, delayed or exempted financial and senior officer disclosure requirements versus those that domestic U.S. firms are required to follow.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The firm is an \u2018emerging growth company\u2019 as defined by the 2012 JOBS Act and may elect to take advantage of reduced public company reporting requirements; prospective shareholders would receive less information for the IPO and in the future as a publicly-held company within the requirements of the Act.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Per the firm\u2019s most recent regulatory filing, it plans to use the net proceeds as follows:<\/p>\n<blockquote class=\"paywall-full-content invisible no-summary-bullets\">\n<p>Approximately 40% for purchasing machinery and robotics equipment;<\/p>\n<p>Approximately 20% for employing additional staff; and<\/p>\n<p>The balance to fund working capital and for other general corporate purposes.<\/p>\n<p>(Source &#8211; SEC)<\/p>\n<\/blockquote>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Management\u2019s presentation of the company roadshow is not available.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Regarding outstanding legal proceedings, management says the firm is not subject to any legal proceedings that would have a material adverse impact on its financial condition or operations.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The sole listed bookrunner of the IPO is EF Hutton.<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">Valuation Metrics For Chi Ko Holdings<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Below is a table of the firm\u2019s relevant capitalization and valuation metrics at IPO, excluding the effects of underwriter options:<\/p>\n<p> <span class=\"table-responsive paywall-full-content invisible no-summary-bullets\"><span class=\"table-scroll-wrapper\"><span data-intersection-boundary=\"start\"><\/span><\/p>\n<table>\n<colgroup>\n<col>\n<col> <\/colgroup>\n<tr>\n<td>\n<p>Measure [TTM]\n<\/td>\n<td>\n<p>Amount<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Market Capitalization at IPO<\/p>\n<\/td>\n<td>\n<p>$58,455,000<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Enterprise Value<\/p>\n<\/td>\n<td>\n<p>$55,663,986<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Price \/ Sales<\/p>\n<\/td>\n<td>\n<p>0.86<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>EV \/ Revenue<\/p>\n<\/td>\n<td>\n<p>0.82<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>EV \/ EBITDA<\/p>\n<\/td>\n<td>\n<p>12.98<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Earnings Per Share<\/p>\n<\/td>\n<td>\n<p>$0.26<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Operating Margin<\/p>\n<\/td>\n<td>\n<p>6.32%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Net Margin<\/p>\n<\/td>\n<td>\n<p>5.15%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Float To Outstanding Shares Ratio<\/p>\n<\/td>\n<td>\n<p>13.39%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Proposed IPO Midpoint Price per Share<\/p>\n<\/td>\n<td>\n<p>$4.50<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Net Free Cash Flow<\/p>\n<\/td>\n<td>\n<p>$3,983,443<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Free Cash Flow Yield Per Share<\/p>\n<\/td>\n<td>\n<p>6.81%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Debt \/ EBITDA Multiple<\/p>\n<\/td>\n<td>\n<p>0.98<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>CapEx Ratio<\/p>\n<\/td>\n<td>\n<p>23.68<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Revenue Growth Rate<\/p>\n<\/td>\n<td>\n<p>25.85%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>(Glossary Of Terms)<\/p>\n<\/td>\n<td> <\/td>\n<\/tr>\n<\/table>\n<p> <span data-intersection-boundary=\"end\"><\/span><\/span><button class=\"table-enlarge-button\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 16 16\" class=\"table-enlarge-icon\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 11a5 5 0 0 1-5 5H5a5 5 0 0 1-5-5V5a5 5 0 0 1 5-5h6a5 5 0 0 1 5 5v6zm-4.5-2.5h2v-6h-6v2h4v4zm-9-1h2v4h4v2h-6v-6z\"><\/path><\/svg>Click to enlarge<\/button><\/span> <\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">(Source &#8211; SEC)<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">Commentary About Chi Ko Holdings<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\">CKHL is seeking U.S. public capital market investment to fund additional equipment purchases and for other general corporate purposes.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The firm\u2019s financials have shown increasing top-line revenue but at a reduced rate of growth, lowered gross profit and reduced gross margin, increased operating profit and variable cash flow from operations.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Free cash flow for the twelve months ending September 30, 2022, was $4.0 million.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">General &amp; Administrative expenses as a percentage of total revenue have varied as revenue has increased; its General &amp; Administrative efficiency multiple fell to 11.9x in the most recent reporting period.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The firm currently plans to pay no dividends and to retain any future earnings for reinvestment back into the business. However, the company has paid substantial dividends in past years.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">CKHL\u2019s CapEx Ratio indicates it has spent moderately on capital expenditures as a percentage of its operating cash flow.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The market opportunity for providing construction services in Hong Kong is large but expected to grow at a slow rate of growth in the coming years. The industry is also highly fragmented and intensely competitive.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Like other firms with Asian country operations seeking to tap U.S. markets, the proposed listing entity operates as a Cayman Islands corporation that owns interests in its other country operations.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">U.S. investors would only have an interest in an offshore firm with interests in or only agreements with operating subsidiaries (i.e., potentially no equity interests), some of which may be located in or have substantial operations in China or other Asian countries with restrictions or unpredictable regulatory environments regarding those interests.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Additionally, restrictions on the transfer of funds between subsidiaries within China or other Asian countries may exist.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Prospective investors would be well advised to consider the potential implications of specific laws regarding earnings repatriation and changing or unpredictable regulatory rulings that may affect such companies and their U.S. stock listings.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Additionally, post-IPO communications from the management of smaller Asian companies that have become public in the U.S. has been spotty and perfunctory, indicating a lack of interest in shareholder communication, only providing the bare minimum required by the SEC and a generally inadequate approach to keeping shareholders up-to-date about management\u2019s priorities.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">EF Hutton is the sole underwriter and IPOs led by the firm over the last 12-month period have generated an average return of negative (58.7%) since their IPO. This is a bottom-tier performance for all major underwriters during the period.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Risks to the company\u2019s outlook as a public company include recent changes in the Chinese government\u2019s regulatory structure for governing Hong Kong and Macau Special Administrative Regions.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">As for valuation expectations, management is asking IPO investors to pay an Enterprise Value \/ Revenue multiple of 0.82x.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Given the firm\u2019s slowing revenue growth rate, reduced net margin and ongoing risks from operating in the PRC, I&#8217;m on Hold for the IPO.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Expected IPO Pricing Date: To be announced<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/seekingalpha.com\/article\/4608533-ipo-update-chi-ko-holdings-readies-8-million-us-ipo?source=feed_all_articles\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A Quick Take On Chi Ko Holdings Limited Chi Ko Holdings Limited (CKHL) has filed to raise $7.8 million in an IPO of its ordinary shares, according to an amended F-1\/A registration statement. The firm provides construction contracting services in Hong Kong. Given CKHL\u2019s slowing revenue growth rate, reduced net margin and ongoing risks from [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":16313,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[236],"tags":[83],"class_list":["post-16312","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-news","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>IPO Update: Chi Ko Holdings Readies $8 Million U.S. IPO (Pending:CKHL) | iFintechWorld<\/title>\n<meta name=\"description\" content=\"A Quick Take On Chi Ko Holdings Limited Chi Ko Holdings Limited (CKHL) has filed to raise $7.8 million in an IPO of its ordinary shares, according to an\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=16312\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"IPO Update: Chi Ko Holdings Readies $8 Million U.S. IPO (Pending:CKHL) | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"A Quick Take On Chi Ko Holdings Limited Chi Ko Holdings Limited (CKHL) has filed to raise $7.8 million in an IPO of its ordinary shares, according to an\" \/>\n<meta property=\"og:url\" content=\"https:\/\/ifintechworld.com\/?p=16312\" \/>\n<meta property=\"og:site_name\" content=\"iFintechWorld\" \/>\n<meta property=\"article:published_time\" content=\"2023-05-31T18:16:27+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-05-31T18:16:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/05\/1685556987_image_1284154090.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1536\" \/>\n\t<meta property=\"og:image:height\" content=\"1023\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"8 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/ifintechworld.com\/?p=16312#article\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=16312\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\"},\"headline\":\"IPO Update: Chi Ko Holdings Readies $8 Million U.S. IPO (Pending:CKHL)\",\"datePublished\":\"2023-05-31T18:16:27+00:00\",\"dateModified\":\"2023-05-31T18:16:28+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=16312\"},\"wordCount\":1517,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"keywords\":[\"Featured\"],\"articleSection\":[\"News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/ifintechworld.com\/?p=16312#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/ifintechworld.com\/?p=16312\",\"url\":\"https:\/\/ifintechworld.com\/?p=16312\",\"name\":\"IPO Update: Chi Ko Holdings Readies $8 Million U.S. IPO (Pending:CKHL) | iFintechWorld\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/#website\"},\"datePublished\":\"2023-05-31T18:16:27+00:00\",\"dateModified\":\"2023-05-31T18:16:28+00:00\",\"description\":\"A Quick Take On Chi Ko Holdings Limited Chi Ko Holdings Limited (CKHL) has filed to raise $7.8 million in an IPO of its ordinary shares, according to an\",\"breadcrumb\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=16312#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/ifintechworld.com\/?p=16312\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/ifintechworld.com\/?p=16312#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/ifintechworld.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"IPO Update: Chi Ko Holdings Readies $8 Million U.S. IPO (Pending:CKHL)\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/ifintechworld.com\/#website\",\"url\":\"https:\/\/ifintechworld.com\/\",\"name\":\"Repay Down\",\"description\":\"Latest Personal Finance News, Tips and Updates\",\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/ifintechworld.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/ifintechworld.com\/#organization\",\"name\":\"Repay Down\",\"url\":\"https:\/\/ifintechworld.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"width\":558,\"height\":90,\"caption\":\"Repay Down\"},\"image\":{\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/ifintechworld.com\"],\"url\":\"https:\/\/ifintechworld.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"IPO Update: Chi Ko Holdings Readies $8 Million U.S. IPO (Pending:CKHL) | iFintechWorld","description":"A Quick Take On Chi Ko Holdings Limited Chi Ko Holdings Limited (CKHL) has filed to raise $7.8 million in an IPO of its ordinary shares, according to an","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/ifintechworld.com\/?p=16312","og_locale":"en_US","og_type":"article","og_title":"IPO Update: Chi Ko Holdings Readies $8 Million U.S. IPO (Pending:CKHL) | iFintechWorld","og_description":"A Quick Take On Chi Ko Holdings Limited Chi Ko Holdings Limited (CKHL) has filed to raise $7.8 million in an IPO of its ordinary shares, according to an","og_url":"https:\/\/ifintechworld.com\/?p=16312","og_site_name":"iFintechWorld","article_published_time":"2023-05-31T18:16:27+00:00","article_modified_time":"2023-05-31T18:16:28+00:00","og_image":[{"width":1536,"height":1023,"url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/05\/1685556987_image_1284154090.jpg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"8 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/ifintechworld.com\/?p=16312#article","isPartOf":{"@id":"https:\/\/ifintechworld.com\/?p=16312"},"author":{"name":"News Room","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61"},"headline":"IPO Update: Chi Ko Holdings Readies $8 Million U.S. IPO (Pending:CKHL)","datePublished":"2023-05-31T18:16:27+00:00","dateModified":"2023-05-31T18:16:28+00:00","mainEntityOfPage":{"@id":"https:\/\/ifintechworld.com\/?p=16312"},"wordCount":1517,"commentCount":0,"publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"keywords":["Featured"],"articleSection":["News"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/ifintechworld.com\/?p=16312#respond"]}]},{"@type":"WebPage","@id":"https:\/\/ifintechworld.com\/?p=16312","url":"https:\/\/ifintechworld.com\/?p=16312","name":"IPO Update: Chi Ko Holdings Readies $8 Million U.S. IPO (Pending:CKHL) | iFintechWorld","isPartOf":{"@id":"https:\/\/ifintechworld.com\/#website"},"datePublished":"2023-05-31T18:16:27+00:00","dateModified":"2023-05-31T18:16:28+00:00","description":"A Quick Take On Chi Ko Holdings Limited Chi Ko Holdings Limited (CKHL) has filed to raise $7.8 million in an IPO of its ordinary shares, according to an","breadcrumb":{"@id":"https:\/\/ifintechworld.com\/?p=16312#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/ifintechworld.com\/?p=16312"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/ifintechworld.com\/?p=16312#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/ifintechworld.com\/"},{"@type":"ListItem","position":2,"name":"IPO Update: Chi Ko Holdings Readies $8 Million U.S. IPO (Pending:CKHL)"}]},{"@type":"WebSite","@id":"https:\/\/ifintechworld.com\/#website","url":"https:\/\/ifintechworld.com\/","name":"Repay Down","description":"Latest Personal Finance News, Tips and Updates","publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/ifintechworld.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/ifintechworld.com\/#organization","name":"Repay Down","url":"https:\/\/ifintechworld.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","width":558,"height":90,"caption":"Repay Down"},"image":{"@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","caption":"News Room"},"sameAs":["https:\/\/ifintechworld.com"],"url":"https:\/\/ifintechworld.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/16312","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16312"}],"version-history":[{"count":1,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/16312\/revisions"}],"predecessor-version":[{"id":16314,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/16312\/revisions\/16314"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/media\/16313"}],"wp:attachment":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16312"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16312"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16312"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}