SU Group to implement 1-for-10 reverse stock split next week

HONG KONG - SU Group Holdings Limited (NASDAQ:SUGP), a Hong Kong-based security engineering services company with a market capitalization of $8.43 million, announced Wednesday it will implement a 1-for-10 reverse stock split effective Monday, August 25, 2025. The announcement comes as the stock has declined over 67% in the past year, according to InvestingPro data.

The reverse split will reduce the company’s outstanding ordinary shares from approximately 13.85 million to 1.38 million, with the stock continuing to trade under the same "SUGP" symbol on the Nasdaq Capital Market. The company stated the action is primarily intended to bring it into compliance with Nasdaq’s $1.00 minimum bid price requirement. InvestingPro analysis indicates the company maintains strong liquidity with a current ratio of 3.37 and holds more cash than debt on its balance sheet, suggesting financial stability despite recent stock performance challenges.

In addition to the reverse split, SU Group will increase its authorized share capital from HK$7.5 million to HK$75 million and alter its share capital structure to create two classes of shares with different voting rights.

The restructuring will establish Class A ordinary shares carrying one vote each and Class B ordinary shares carrying fifty votes each. Following these changes, company chairman and executive officer Chan Ming Dave’s voting power will increase from approximately 65.84% to 98.96% through his beneficial ownership of all Class B shares.

No fractional shares will be issued in the reverse split, with all fractional shares being rounded up to the nearest whole number. Shareholders holding shares electronically through brokers will have their positions automatically adjusted, while certificate holders will need to exchange their old certificates.

The company’s board of directors approved these actions on June 26, 2025, with shareholders giving their approval at an Extraordinary General Meeting on July 31, 2025.

According to the company’s press release statement, SU Group provides security-related engineering services, security guarding, and screening services in Hong Kong. The company has demonstrated solid operational performance with 25% revenue growth in the last twelve months. InvestingPro analysis suggests the stock is currently trading below its Fair Value, with 8 additional exclusive insights available to subscribers.

In other recent news, SU Group Holdings Limited has secured a significant contract valued at approximately $11.3 million, marking the largest in the company’s history. This contract involves the design and implementation of comprehensive security and monitoring systems for a major hospital expansion project in Hong Kong. The project will see SU Group deliver various integrated technologies, including IP-based public address systems, CCTV, and access control systems. Additionally, SU Group Holdings has announced an extraordinary general meeting for shareholders. The company has distributed a proxy statement and notice regarding this meeting to inform shareholders and facilitate their participation and voting. These developments highlight SU Group’s ongoing efforts to expand its operations and engage with its shareholders.

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