Alsco delivers new application on rocky road to a Hong Kong IPO

Slowing growth, a shaky valuation and high receivables could cloud the latest listing attempt by China’s top provider of reusable packaging materials for the auto sector

Key Takeaways:

• Alsco has filed to list in Hong Kong, reporting its profit fell by 20% in 2024, as its revenue growth slowed sharply during the year
• The application is the second by the provider of reusable packaging for the automotive industry, after an earlier attempt lapsed amid compliance issues

By Edith Terry

Alsco Pooling Service Co. Ltd.’s second application to list on the Hong Kong Stock Exchange, filed last week, marked a comedown from its original application last November, when the company’s business was riding high but later got tripped up by compliance issues. Notably, the latest filing shows Alsco’s business slowed sharply in the second half of last year, after the earlier application showed a much stronger start to 2024.

But after some house cleaning to address the earlier compliance issues, Alsco may still beat some of its competitors in the logistics-sharing business to market, like Lalatech, which has also made several applications but has yet to list in Hong Kong. Alsco’s close ties to China’s auto sector, now leading the world in both production and exports, could give its IPO some positive momentum.

Chairman Sun Yan’an founded a logistics equipment and services company in 1998 that would eventually become Alsco. Since then, his company, formerly known as Anwood Logistics, has risen to become China’s largest container and packaging sharing firm for the auto industry. 

Alsco manufactures foldable containers and boxes as well as metal racks and specialized containers that can be used by auto companies and later returned for reuse. Their foldability means they can be easily shipped to and from customers, and customers pay based on the number of times the packaging containing their products is circulated.

Actual containers are made from high-strength polypropylene materials at Alsco’s major factory in Lianyungang, one of China’s top ports in Jiangsu province. A second factory in Yancheng, built in 2022 down the coast from Lianyungang, recycles plastic parts for reuse.  This “returnable” model is aimed primarily at small and medium sized suppliers of batteries and other products to the major auto brands.

According to independent research in the listing document, Alsco was the second largest shared packaging company in China last year and the largest provider for the auto services market. The company controlled 1% of China’s overall logistics packaging solution market that was worth $118.7 billion. The big majority of that market, 93.7%, was for container sales.

Rather than competing with an estimated 3,500 companies that supply containers to the domestic market, Alsco was among the first in the shared container services market – which the company refers to as “pooling.” The market size of this niche was a much smaller 16.9 billion yuan ($2.3 billion) in 2023, with Alsco as a leader in the category.

Alsco also engages in the larger container industry, but only 12.9% of its revenue in 2023 and 8.5% in 2024 came from container sales. Most of the rest came from its “pooling” or sharing services.

The intervening six months since Alsco’s initial IPO application have clearly tarnished the outlook for the listing. The original IPO application may have been tripped up in January, when the China Securities and Regulatory Commission (CSRC) raised questions about some of Alsco’s practices, including equity transfers, private placements and disputes regarding its employee stock ownership plan.

The company appears to have cleaned up those issues since then. But as we’ve already noted, the latest listing document includes data for all of last year, as well as selected disclosure through April 2025, which reveal a business slowdown in the second half of the year.

Revenue growth slowdown

Notably, Alsco’s revenue growth slowed sharply in the second half of the year from the first half, and its profit also began to contract. Alsco reported its revenue for all 2024 rose 5% to 837.6 million yuan, representing a sharp slowdown from its 17% growth in the first half of the year. Its annual profit of 50.7 million yuan was down 21% year-over-year, reversing its 80% profit growth in the first half of the year. 

One issue dogging the company is its receivables, which remain stubbornly high. Its largest customer, which appears to be automotive giant BYD, switched its payment method from bank transfer to bills receivable in 2024, with its credit period extended from 30 days to 60 days.

After that, Alsco’s accounts and notes receivable increased by 6% year-on-year to 382.4 million yuan in 2024. Its accounts and notes receivables equaled 72% of its current assets at the end of last year – well above the 10% to 15% range generally considered healthy. Turnover periods for the company’s trade and bill receivables increased as well, from 159.9 days in 2023 to 167.9 days in 2024, also well above the 30 to 60 days considered healthy.

Alsco’s latest listing document shows it has tried to tackle its high level of outstanding payments this year. The company said it was able to settle 83.3% of its trade receivables, worth 312.9 million yuan, by the end of April this year. Alsco’s high level of receivables may reflect difficulties being faced by China’s auto industry, which is suffering from big overcapacity built up after years of explosive growth.

Alsco’s valuation based on its various financing rounds and share transfers has been unsteady as well. Its Series A financing round in 2017 valued it at 540 million yuan. That rose to 800 million yuan during its Series B round in July 2022, when investment from municipal entities in the company’s hometown of Suzhou gave those entities about 10% of the company. But the valuation sank to 672 million yuan in September and October 2022, based on two equity transfers at that time, according to media sources.

In the early 2020s, Suzhou set the goal of building up its auto industry with a policy called the Suzhou Automobile Complete Vehicle, Electronics and Parts Industry Innovation Cluster Action Plan (2023-2025). It helped Alsco launch its recycling facility, with an annual capacity of 30,000 tons of automotive plastic pellets and 2,000 tons of hollow board linings.

Despite China’s economic slowdown and problems facing its auto industry, the country’s sharing economy for logistics companies is far from dead. Hong Kong-based Lalatech, which operates a network of logistics vans for hire, similar to Uber’s car-sharing network, submitted its fifth application for a Hong Kong IPO in April, with heavyweights Goldman Sachs, BofA Securities and JPMorgan as joint underwriters.

The similar Gogox Holdings (2246.HK), which went public in July 2022, has seen its share price drop to HK$3.90 from its IPO price of HK$21.60, which doesn’t bode too well for the other shared-economy logistics companies. But for now, at least, Alsco is probably hoping its recent housecleaning to address earlier compliance issues will be good enough to woo investors to its second listing attempt despite its recent business slowdown.

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