US IPO Preview | With Rapid Revenue Expansion, How Does Cheng Tian International (TTG.US) Seek New Growth Space in Cross-Border Logistics?

For cross-border e-commerce companies, logistics is no longer just a simple transportation link, but a comprehensive service covering multiple segments including warehousing, international transportation, customs clearance, and last-mile delivery. Recently, Cheng Tian International (TTG.US), which focuses on providing integrated comprehensive logistics solutions for cross-border e-commerce and cross-border trade enterprises, has submitted a prospectus to the SEC and plans to list on the Nasdaq Capital Market. From the perspective of its business model, Cheng Tian International has gradually built an integrated service system covering warehousing, international transportation, customs clearance, and last-mile delivery around cross-border logistics needs, mainly serving cross-border e-commerce platforms, freight forwarders, and related enterprises. In recent years, Cheng Tian International's cross-border logistics network has continued to expand. Can the company, relying on its overseas network and customer resources, further transform the rapid growth of its revenue scale into sustained profitability and long-term growth space? Revenue scale expands rapidly, cross-border logistics business releases momentum It is understood that in recent years, Cheng Tian International's business scale has expanded rapidly. In 2024, the company's revenue reached approximately RMB 648 million, a significant increase compared with approximately RMB 268 million in 2023, mainly driven by the expansion of its cross-border logistics business scale and the company's further expansion of large cross-border e-commerce platform and logistics enterprise customers. Among these, end-to-end cross-border logistics services are one of the company's core businesses. Compared with traditional freight forwarding, this type of business covers more segments, and the company can start from cargo pickup and further provide warehousing, international transportation, customs clearance, and overseas last-mile delivery services. For cross-border e-commerce customers, this integrated service can reduce coordination costs between different logistics segments and also help improve the traceability and stability of the transportation process. In addition, customer expansion is an important driving force behind Cheng Tian International's revenue growth. According to disclosures in the prospectus, the company has strengthened cooperation with large cross-border e-commerce ecosystems and logistics enterprises in recent years, including logistics business related to large Chinese cross-border e-commerce platforms. As these platforms continue to enter overseas markets, logistics orders have also grown, bringing new business increments to the company. In terms of markets, Cheng Tian International is not limited to a single market. The company's current main logistics destinations include Australia, the United Kingdom, the European Union, Canada, and the United States. In 2024, parcels sent by the company to Australia accounted for approximately 29.7% by weight, the United Kingdom approximately 26.64%, the European Union approximately 16.72%, and Canada and the United States approximately 12.36% and 12.11%, respectively. This multi-regional layout is of great significance for cross-border logistics enterprises. On the one hand, e-commerce demand in different countries and regions can complement each other, reducing the company's dependence on a single market; on the other hand, as overseas logistics nodes continue to increase, the company can undertake more customers and orders based on its existing network, thereby gradually forming economies of scale. It is worth mentioning that rapid expansion also means the company is still in a stage of "scale first, with efficiency improvement advanced in parallel." In 2024, the company's gross profit was approximately RMB 69.26 million, with a gross margin of approximately 10.7%, lower than approximately 15.6% in 2023; net profit decreased from approximately RMB 11.61 million in 2023 to approximately RMB 6.7 million, indicating that the company's revenue growth rate is currently significantly faster than profit growth. But on the other hand, as the logistics network gradually matures, there is still room for the company to further improve profitability efficiency in the future. For cross-border logistics enterprises, after order scale expands, unit costs can be reduced by optimizing transportation routes, improving the utilization of warehousing and distribution resources, and enhancing bargaining power with suppliers. If the company can gradually transform its rapidly growing business scale into improved operational efficiency, profitability is also expected to improve. Overseas network accelerates its formation, what is the future growth space? From a longer-term perspective, Cheng Tian International's growth space does not only come from the growth of existing businesses, but also from the further expansion of its overseas logistics network. It is understood that today, the development of cross-border e-commerce is driving the upgrading of logistics services from single transportation to comprehensive supply chain services. In the past, cross-border sellers may only have needed to solve the problem of "how to ship goods overseas." But as the scale of overseas orders expands, customers are placing increasingly higher demands on overseas warehousing, customs clearance, delivery timeliness, and full-process logistics management. As a result, enterprises capable of covering multiple logistics segments at the same time also have greater space to undertake business. At present, Cheng Tian International is strengthening localized operating capabilities in markets such as the United Kingdom and Australia, and continues to expand into other overseas markets. Among the uses of proceeds from the company's current listing are further upgrading its logistics system, researching and developing logistics technology, expanding its business network, and supplementing working capital. For cross-border logistics enterprises in the expansion stage, capital market funds can help them more quickly improve overseas warehousing and distribution networks, thereby undertaking more customer demand. On the other hand, the company's cooperation with large cross-border e-commerce platforms and logistics enterprises also provides a relatively good customer base for future growth. In particular, as large e-commerce platforms continue to expand into overseas markets, their logistics supply chains usually need strong stability and coverage capabilities. If Cheng Tian International can continue to expand its overseas network and continuously improve service efficiency, it has the opportunity to further upgrade from a service provider in a single logistics segment to a comprehensive cross-border supply chain service provider. It should be noted that the company's current profit scale is still relatively small, and there is still room for further improvement in gross margin. At the same time, the cross-border logistics industry itself is affected by factors such as international transportation prices, exchange rates, and changes in overseas policies. Therefore, after listing, whether the company can further improve operational efficiency while maintaining revenue growth will become an important indicator for measuring the quality of its growth. Overall, the core logic presented by Cheng Tian International's IPO is relatively clear: on the one hand, the company benefits from the growth in logistics demand brought by cross-border e-commerce and the globalization of Chinese enterprises, and its revenue scale has expanded rapidly in recent years; on the other hand, the company is further building comprehensive cross-border supply chain capabilities through overseas networks, digital systems, and cooperation with large customers. Therefore, what is worth watching about Cheng Tian International is not only its current revenue scale, but whether it can rely on the logistics network it has already established to transform new orders, overseas expansion, and digital capabilities into higher operational efficiency. If the company can continue to improve unit costs and profitability while expanding its business scale in the future, the scale effect of its business model is expected to be further reflected. From this perspective, Cheng Tian International is still in the expansion stage of the global cross-border logistics market. In the future, changes in the company's business scale, customer structure, and profitability will be several key dimensions for observing its growth space.