Hongli Group (HLP) shares rode Wall Street’s roller coaster today (Wednesday, March 29, 2023) in their NASDAQ debut. The stock opened at $4.40 – up 40 cents from their $4.00 IPO price for a 10 percent gain at the first tick. At the closing bell, Hongli’s stock was at $3.50 – down 50 cents from its issue price for a 12.5 percent decline in its first day of trading. On Tuesday night (March 28, 2023), the IPO was downsized again at pricing to 2.06 million shares (2,062,500 shares) – down from 2.5 million shares, the recently trimmed size in the prospectus – and priced at $4.00 – the low end of the $4.00-to-$6.00 range – to raise $8.25 million. Hongli, the Cayman Islands parent of a profitable Chinese cold roll formed steel business, raised $4.25 million less – or about 34 percent less than the $12.5 million in estimated IPO proceeds in the prospectus. That estimate was based on the $5.00 mid-point on 2.5 million shares – the terms in the prospectus. (Editor’s Note: This column, published early Wednesday, was updated after the close.)
This pricing marked the third small Chinese IPO to get done this week. Bankers have also priced two SPAC IPOs this week, including Trailblazer Merger Corp. I (TBMCU), which was done last night. Trailblazer Merger I shares closed at $10.11, up 11 cents for a 1.1 percent gain in their first day of NASDAQ trading. The stock had opened at $10.14 – up 14 cents from its $10.00 unit IPO price – at 11:43 a.m. EDT today on NASDAQ.
Bankers have raised about $144.25 million in IPO proceeds so far this week.
EF Hutton was the sole book-runner of Hongli Group’s IPO.
China’s Cold Steel Cash
Hongli Group, based in Weifang in China’s Shandong Province, says its operating business in the People’s Republic of China (PRC) is one of China’s leading manufacturers of cold roll formed steel profiles. A profile is a specific product designed for a specific use. The company’s PRC operating entities design, customize and manufacture cold roll formed steel profiles for machinery and equipment in a variety of sectors, including mining and excavation, automotive, construction, agriculture and transportation.
The business, founded in 1999, serves customers in more than 30 cities in China. It also serves clients in South Korea, Japan, the U.S. and Sweden. Sungjin Tech Co. Ltd., also known as “South Korean Volvo,” and Katsushiro Machinery Co. Ltd., the excavation and construction equipment company known as “Japan Katsushiro,” are among Hongli Group’s customers.
For the 12 months that ended June 30, 2022, Hongli Group earned net income of $3.61 million on revenue of $21.94 million.
More Micro-Caps on the IPO Runway
The “priced” column this week includes Jin Medical International (ZJYL) and YanGuFang (YGF), and another SPAC IPO, TMT Acquisition Corp. (TMTCU) – all priced Monday night for Tuesday trading.
Looking ahead to the rest of the week, the IPO Calendar has another nine or so small-cap companies aiming to go public.
Stay tuned.
(For more information about these companies, please check the IPO Calendar and the individual IPO Profiles found on IPOScoop.com’s website.)
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