NEWS WRAP: Lalatech relaunches IPO fueled by accelerating profits

The freight logistics company’s revenue rose 18% in the first half of this year, while its adjusted profit jumped by 41% on improving efficiencies

By Teri Yu

Logistics giant Lalatech Holdings Ltd. relaunched its IPO on Wednesday, aiming to woo investors with continuing strong growth and accelerating profits, even in the face of economic headwinds for its core markets in Hong Kong and Mainland China.

Last week’s Hong Kong stock rally, driven by new stimulus measures from Beijing, has created a sudden new window of opportunity for IPO candidates like Lalatech, which first filed to list early last year. A positive debut for Midea Group’s new Hong Kong listing in mid-September has also fueled optimism.

Lalatech runs two logistics brands, Lalamove in Hong Kong and Huolala in Mainland China, whose prominent fleet of orange delivery vans are popular among both businesses and individual customers. Its data-driven platform connects merchants with its massive network of drivers, enabling quick response to orders and cost-effective pricing.

Lalatech is the world’s largest logistics trading platform in terms of gross transaction value (GTV) of freight orders matched and paid for over its digital platforms, commanding 53.9% of the market globally, according to third-party data in its new listing document. In the first half of 2024 alone, the company helped fulfill over 338 million orders with a total global freight GTV of $4.6 billion, up 30% and 17%, respectively, year-on-year. The company served over 15 million average merchant MAUs and brought business to around 1.4 million average carrier MAUs during the same period.

Lalatech’s latest filing looks aimed at taking advantage of the recent stock market rally to wow investors with its continued growth story and improving profits. Its revenue rose 18% in the first half of this year to $709 million, extending a 28.8% increase for all last year when the figure reached $1.3 billion.

Its gross margin was at 59.4% in the latest six-month reporting period, as spending controls helped its operating expenses fall to 37% of revenue from 43.5% in the year-ago period. The company recorded its first annual adjusted profit last year, which typically excludes expenses related to stock-based employee compensation, and the figure jumped 41% in the first half of this year to $213 million compared with a year earlier.

Lalatech was founded in Hong Kong in 2013, and quickly expanded into Southeast Asia and Mainland China. It is a first mover among China-based freight transaction platforms to go global, and now operates in key Southeast Asian markets such as Thailand, the Philippines, Indonesia, Singapore and Malaysia and markets in Latin America such as Mexico and Brazil. The company has also launched its service in Japan.

In the first six months of 2024, Lalatech’s overseas freight GTV grew to $368 million with 79 million overseas freight fulfilled orders, up 26% and 28% year-over-year, respectively, presenting a growth driver for the company. Its overseas revenue grew 24% in the first half of the year to $66.2 million, accounting for 9.3% of its total.

Goldman Sachs, JP Morgan and BofA are sponsoring the IPO. The company’s close competitor Gogox (2246.HK) listed in Hong Kong in 2022, but its stock has struggled to find an audience and is now down nearly 98% from its listing price.

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