Preview of US stocks | With only 4.2 million euros in cash on hand, how can AIGO Holdings (AIGO.US) support a $335 million IPO valuation?

As a leader in the global manufacturing sector, China's total export volume in 2024 broke through the 25 trillion yuan mark for the first time, reaching 25.45 trillion yuan, and has achieved positive growth for eight consecutive years. This achievement demonstrates the strong resilience of China's foreign trade industry in the current complex and changing international situation. Behind this dazzling achievement is the trade system built collectively by millions of wholesalers and distributors, which is like a "capillary network," precisely delivering high-quality products manufactured in China to every corner of the global market, including Aigo Holdings, which has already embarked on the path to listing in the United States. It was learned that Aigo Holdings, which secretly submitted documents to the SEC on June 28, 2024, submitted its initial public offering (IPO) application to the SEC on August 21 of this year and updated its prospectus on September 5, continuing to drive the company's IPO process. According to the prospectus, Aigo Holdings is a global consumer goods supplier from Fuzhou, China. The company plans to list on the Nasdaq with the stock symbol "AIGO" and intends to issue 2 million shares at a price of $4 to $6 per share in this IPO, with an expected fundraising amount of $10 million. At the midpoint of the offering price range, the company's IPO valuation will reach $335 million. Continuing to cultivate the European market, revenue and profits doubled in 2024 Since starting operations in Europe in 2011, Aigo Holdings has been deeply involved in the cross-border trade industry for over fourteen years. The company has built a vast ecosystem, with business covering more than 40 countries and regions across four continents. In terms of products, Aigo Holdings' product line covers four major categories: lighting products, electrical products, household appliances, and pet products. The company operates three independent brands, with AIGOSTAR focusing on smart lighting and home products, NOBLEZA specializing in pet products, and Taylor Swoden focusing on small household appliances. This multi-brand strategy allows Aigo to cover different consumer groups and price ranges, creating a synergistic effect. As of the end of 2024, the company has more than 6,000 SKUs. In addition, IoT products are one of Aigo Holdings' strategic focuses. As of December 31, 2024, the company had over 400 IoT-integrated products, but this series of products accounted for a low proportion of revenue, only 2.6% of total revenue in 2024. In terms of sales channels, Aigo Holdings employs a combination of Wuxi Online Offline Communication Information Technology Co., Ltd. In offline channels, the company has established sales teams in multiple locations in Europe, allowing it to have over 10,000 local customers in Europe, including 207 chain stores selling Aigo Holdings' products by the end of 2024. In online sales, Aigo Holdings operates online stores on over 20 global e-commerce platforms, including Amazon, to sell the company's products. In 2023, Aigo Holdings' offline and online channels accounted for 50.8% and 48.3% of total revenue, respectively, and by 2024, these proportions were 55.8% and 43.5%. In terms of regions, Aigo Holdings has now established a global presence in Europe, Asia, North America, Latin America, and Africa. In 2024, revenue came from approximately 40 countries and regions across four continents, with the EU market accounting for about 84% of revenue, of which Italy, Spain, and Germany accounted for 25.4%, 35.1%, and 10%, respectively. Additionally, revenue from the US market accounted for 4.2%. In terms of supply chain system construction, about 90% of Aigo Holdings' suppliers are in mainland China, fully leveraging the cost and efficiency advantages of Chinese manufacturing. The company operates a total of 12 local warehouses in Europe and China, allowing it to respond quickly to market demand. In 2024, its European warehouse's next-day delivery service covered over 60% of offline customers. In terms of performance, benefiting from increases in revenue from its four major product lines, Aigo Holdings' total revenue grew by 17.58% to 178 million euros in 2024. Building on this, the company improved operational efficiency, with sales and marketing expenses declining year-on-year, reducing total operating expenses as a percentage of total revenue from 48.4% in 2023 to 44.4% in 2024. This accelerated the release of net profit, with Aigo Holdings' net profit after foreign exchange adjustments in 2024 reaching 5.651 million euros, an increase of 50.57% year-on-year, achieving double growth in revenue and adjusted net profit. Online sales heavily rely on Amazon, global presence needs to accelerate From an industry perspective, the international market for Chinese products is a promising and broad track for development. With the gradual recovery of the global economy and the continued expansion of the consumer market, the demand for high-value and high-tech products from China in the international market will continue to increase. According to data from iResearch Consulting, the market size of the consumer goods industry in Southern Europe was 3.9 trillion euros in 2023, accounting for about 4.6% of the global market. It is expected to further increase to 5.2 trillion euros by 2028, with an annual compound growth rate of 5.8% from 2023 to 2025. Looking at specific product categories, the market sizes of the lighting, electrical products, household appliances, and pet products industries in Southern Europe are projected to have compound annual growth rates of 1.7%, 3.3%, 7.3%, and 6.6%, respectively, from 2023 to 2028. The stable growth of market sizes in various product categories will benefit Aigo Holdings, which continues to deepen its presence in Southern Europe. However, Aigo Holdings faces several potential operational challenges. Firstly, online sales channels are highly concentrated on a single platform. According to the prospectus, about 85% of online sales revenue for Aigo Holdings currently comes from the Amazon platform. This dependence on a single platform poses a potential risk, as any policy changes by the platform could impact the business. Secondly, operating its own brands will place higher demands on Aigo Holdings' operations. Although proprietary brands are more profitable, Aigo Holdings will need to spend more on the promotion and marketing of these brands, with sales and marketing expenses accounting for 40% of the company's total revenue. If market competition intensifies, Aigo Holdings may increase its spending on sales and marketing expenses, which could affect the company's profitability. Furthermore, a significant portion of Aigo Holdings' revenue currently comes from the EU market, with 84% of revenue in 2024 coming from the EU. Such a high proportion means that any slowdown in demand in the European market or changes in international situations affecting demand could impact Aigo Holdings' operations. Accelerating the globalization of its presence and diversifying the concentration of its business regions will be a necessary path for the long-term steady development of Aigo Holdings. In addition, Aigo Holdings currently has relatively tight cash flow. As of December 31, 2024, Aigo Holdings' total assets were 132 million euros, total liabilities were 102 million euros, with an asset-liability ratio of 77.27%. The current ratio is 1.21, with only 4.2 million in cash on hand. This may also be a key reason for Aigo Holdings to accelerate its listing in the United States.