Quick Take

Intelligent Living Application Group (ILAG) has filed to raise $19 million in an IPO of its ordinary shares, according to an F-1 registration statement.

The firm sells mechanical locksets in the U.S. and Canada.

ILAG has suffered topline revenue contraction and its financial information is outdated.

I’ll provide an update when we learn more about the IPO from management.

Company & Technology

Hong Kong, China-based Intelligent Living was founded to design, manufacture and sell mechanical locksets for indoors and outdoors as well as smart locks for the connected home market.

Management is headed by Chairman and CEO Mr. Bong Lau, who has more than 20 years experience in the door security hardware industry.

The company sells its products to major retailers as well as property developers and hotel/service apartment developers.

The firm began work on its smart locks initiative several years ago but has since focused its resources on its core business due to the trade conflict between the U.S. and China and more recently the effects of the Covid-19 pandemic.

Currently, 98% of the firm’s revenue is from sales to the U.S. market.

Intelligent Living has received at least $4.2 million from investors including senior management.

Customer Acquisition

The company pursues large customers through a direct sales and marketing force and attendance at trade shows and conferences.

Management believes its focus on producing higher quality products has ‘hurt our profit margin in light of cut-throat price competition.’The firm intends to perform test marketing of its self-branded products in the Southeast Asian region.

Sales and Marketing expenses as a percentage of total revenue have been dropping as revenues have decreased, as the figures below indicate:

Selling and Marketing

Expenses vs. Revenue

Period

Percentage

2019

1.6%

2018

1.9%

Source: Company registration statement

The Sales and Marketing efficiency rate, defined