The IPO Buzz: Asia in the Micro-Cap IPO Spotlight

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Asia is the theme of this week’s IPO Calendar of seven micro-cap IPOs – with four from China,  one from Singapore and one from Japan. An American ED (erectile dysfunction) telehealth company’s mini IPO is also in the playbook. For the week of March 20, 2023, Wall Street’s eyes will be fixed on the Fed’s response to trouble in the U.S. banking sector and the drama surrounding the rescue of Credit Suisse.

If all seven micro-cap deals get priced, bankers will raise about $81.25 million. All are NASDAQ listings.

The views on what the Fed will do at its Tuesday-Wednesday (March 21-March 22) meeting run from:

  • No rate increase – signaled Wednesday (March 15) by interest-rate futures investors, according to The Wall Street Journal, to

  • A 25-basis-point rate increase – indicated Friday (March 17) by the swap market, according to Bloomberg.

  • Both camps think the Fed’s rate-increase cycle could be over, due to turmoil in the banking sector after two U.S. regional banks – Silicon Valley Bank and Signature Bank in New York – failed within days of each other (SVB on March 10, 2023, and Signature Bank on March 12, 2023).

UBS agreed to buy its rival Credit Suisse on Sunday (March 19) in an all-stock government-backed deal for about $3.25 billion, Bloomberg reported. That price is less than half of Credit Suisse’s valuation of $8 billion at the close of trading on Friday. The historic transaction ends Credit Suisse’s nearly 167-year history as a stand-alone bank.

“It could be rough for a while,” a veteran IPO trader says. “It’s going to take some time for things to calm down. I might play a little, but it’s mostly ‘risk off’ for now.”

Big IPOs in the $100 million-and-up class are likely to stay on the sidelines until the bank failure fears subside. Three big IPOs – New Ruipeng Pet Group Inc., Fogo Hospitality Inc. and Steinway Musical Instruments Holdings Inc. – updated their SEC filings last week, but they did not disclose terms.

Most of this week’s IPO action is scheduled to take place on Monday night, when four micro-cap deals are set for pricing. Let’s take a look at this week’s deals, organized by pricing date.

Pricing Monday Night to Trade Tuesday

A Chinese amusement park operator, an American ED (erectile dysfunction) telehealth company, a Singapore property tech platform and a Chinese oat products manufacturer are planning to price their micro-cap IPOs on Monday night (March 20). All are set to start trading on Tuesday (March 21). In the case of the Chinese companies, the stock in their IPOs will be offered by their Cayman Islands-incorporated holding companies – and not by the underlying businesses in China. Here’s the lineup:

  • Golden Heaven Group Ltd. (GDHG proposed) – Revere Securities and R.F. Lafferty & Co. are the joint book-runners of this IPO – 2.0 million shares at $4.00 to $5.00 to raise $9.0 million. Golden Heaven Group, a holding company incorporated in the Cayman Islands, is offering the stock in the IPO. Through its subsidiaries in the People’s Republic of China, the Fujian Province-based company operates six amusement parks and water parks in southern China.

  • Mangoceuticals Inc. (MGRX proposed)  – Boustead Securities, LLC is the sole book-runner of this IPO – 1.25 million shares at $4.00 to raise $5.0 million. Mangoceuticals’ ED (erectile dysfunction) pill is not approved by the FDA. The Dallas, Texas-based company plans to sell its Mango pill and offer telehealth services to men by licensed professionals through its website: http://www.mangorx.com/

  • Ohmyhome Ltd. (OMH proposed) – Prime Number Capital LLC is the sole book-runner of this IPO – 3.25 million shares at $4.00 to $5.00 to raise $14.63 million. Ohmyhome Ltd., based in Singapore, runs a “one-stop-shop property platform” that provides brokerage services, home renovation and furnishing services, listing and research, mortgage referral, legal services and insurance referral services.

  • YanGuFang International Group Co., Ltd. (YGF proposed) – EF Hutton is the sole book-runner of this IPO – 2.5 million shares at $4.00 to $6.00 to raise $12.5 million. YanGuFang, based in Shanghai, is involved in the production, R&D and sales of oat and grain products through its own sales team and distribution network. Its products include oatmeal, oat flour, oat bran, oat biscuits, oat hand cream and soap, and oat toothpaste.

Pricing Wednesday Night to Trade Thursday

One of China’s leading contract logistics service providers is expected to price its IPO on Wednesday night (March 22) to trade Thursday (March 23):

Shengfeng Development Ltd. (SFWL proposed) – Univest Securities is the sole book-runner of this IPO – 3.0 million shares at $4.00 to $5.00 to raise $13.5 million. The stock in the IPO is being offered by Shengfeng’s Cayman Islands-incorporated holding company. Shengfeng Development, the VIE (variable interest entity) based in Fuzhou City, Fujian Province, offers logistics services in three segments: (1) B2B freight transportation; (2) cloud storage and (3) value-added services. Xiaomi, a Chinese “smart phone” company, is a client.

Pricing “Week of March 20”

A Japanese luxury real estate developer and a Chinese EV battery company are on the IPO Calendar for “week of March 20” pricing:

 

  • Lead Real Estate Co. Ltd. (LRE proposed) – EF Hutton is the sole book-runner of this IPO – a carry-over from last week – 1.14 million shares at $7.00 to $9.00 to raise $9.12 million. Lead Real Estate Co., incorporated in Japan and based in Tokyo, develops luxury single-family homes for wealthy families and luxury condos for corporate customers in Tokyo and Kanagawa prefecture (Yokohama). It also operates hotels in Tokyo and leases apartments to customers in Japan and Dallas, Texas.

  • U Power Ltd. (UCAR proposed) – AMTD and WestPark Capital are the joint book-runners of this IPO – 2.5 million shares at $6.00 to $8.00 to raise $17.5 million. The Cayman Islands-incorporated holding company is offering the stock in the IPO. U Power, based in Shanghai, is developing its EV (electric vehicle) battery swapping technology for the commercial EV market.

 Looking Ahead

The IPO Calendar is blank for the week of March 27. No doubt, bankers are waiting to assess market conditions before launching more deals.

As for the IPO market, IPOs thrive when the U.S. stock market is strong and the Fed is friendly.

Stay tuned.

(For more information about these companies, please check the IPO Calendar and the individual IPO Profiles found on IPOScoop.com’s website.)

Note: Never trade on proposed symbols. They have been known to change and you might buy something on the OTC Bulletin Board. 

To see what time the NASDAQ IPOs are expected to trade, please log in to: NASDAQTrader.com then scroll down to IPO Message. 

Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums) is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.