(CapitalWatch, Dec. 5, New York) Chinese e-cigarette company Aspire Global Inc. has picked up its IPO efforts, seeking to raise up to $135 million on the Nasdaq Global Market.
Aspire is a holding company whose operational entity, the VIE, is based in Shenzhen and focuses on the R&D, design, commercialization, manufacturing, sales, marketing, and distribution of e-cigarettes and related products.
The company sells both open system and closed system vaping devices to more than 30 countries, with the European market generating more than 57% of its revenues in the year through June 2021. Another 10% came from North America: Aspire sells its ISPIRE cannabis vaping technology products in the U.S. since late 2020.
In the 12 months through June 2021, Aspire booked $93.9 million in revenue, up 32% year-over-year. Net income was $547,000 compared with $19.1 million in the preceding year. Over the past couple of years, Aspire sold about 100% of its products directly offline. Prior to China's policy forbidding online vaping sales, the company sold its products on various portals including Alibaba's Taobao and JD.com.
The terms of the offering have not changed since Aspire first filed for a U.S. listing in July 2021. The company is offering 15 million ordinary shares at $7 to $9 apiece, seeking to float its stock under the ticker "ASPG." In addition, a certain stockholder of the company is offering 3.75 million shares in the public offering.
The VIE structure is one of Aspire's risk factors: the company may have to obtain approval from China before a listing, as the company said in its prospectus, updated on Monday. Further, Aspire may face risks of delisting should the U.S. PCAOB be unable to inspect its audits as required under the U.S. Holding Foreign Companies Accountable Act.
Aspire said it intends to use the proceeds from its listing to expand and automate production in both China and the United States, boost its R&D, improve marketing and promotion of its branded products, and for general administration and working capital.
Underwriting Aspire's IPO are Tiger Brokers, EF Hutton, China Merchants Securities (HK), and TFI Securities and Futures.
U.S. investors may be familiar with another Chinese vaping stock, RLX Technology Inc. (NYSE: RLX). RLX was one of the biggest U.S.-China IPOs of 2021, raising $1.4 billion on Wall Street a year ago. RLX claimed to be the leader in China's vaping market, holding 62.6% of the market share – but regulatory tightening and macro uncertainties pummeled the stock's value. Since Day One in trading, RLX stock is down 89%, trading today at $3.32 per share.