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Three Chinese issuers and a nano-cap began trading this past week. Fintech spin-off AMTD Digital (HKD) led the group with its $125 million deal, a rare feat in a year that has only produced a dozen $100+ million IPOs.
In the pipeline, four small IPOs and one SPAC submitted initial filings. The most notable news came from thrift store chain Savers Value Village (SVV) and girl’s fashion retailer Claire’s (CLRS), both of which furnished updated financials, and human capital management platform Justworks (JW), which withdrew its IPO plans.
AMTD Digital priced above the midpoint to raise $125 million at a $1.4 billion market cap. Spun out of AMTD Group, AMTD Digital states that it operates a comprehensive digital solutions platform in Asia. The company is profitable and primarily generates revenue from fees and commissions in two lines of business. AMTD Digital finished up 108%.
Chinese chip designer Nano Labs (NA) priced near the top of the range to raise $20 million at a $637 million market cap. Fast growing and highly unprofitable, the company designs fabless computing chips primarily for the mining of various cryptocurrencies. Nano Labs finished down 41%.
Chinese lock maker Intelligent Living Application Group (ILAG) priced below expectations to raise $20 million at a $72 million market cap. The company manufactures and sells mechanical locksets to customers in the US and Canada and has been looking to expand into smart locks. Intelligent Living Application finished down 44%.
While not counted below, OTC-listed Netcapital (NCPL) raised $5 million at an $18 million market cap in a unit offering on the Nasdaq.
| 3 IPOs During the Week of July 11th, 2022 | |||||
|---|---|---|---|---|---|
| Issuer Business | Deal Size | Market Cap at IPO | Price vs. Midpoint | First Day Return | Return at 07/15 |
| AMTD Digital (HKD) | $125M | $1,443M | 4% | +108% | +108% |
| Digital financial services provider spun out of China’s AMTD Group. | |||||
| Nano Labs (NA) | $20M | $637M | 10% | +5% | -41% |
| Fabless chip designer in China focused on cryptocurrency mining. | |||||
| Intelligent Living (ILAG) | $20M | $72M | -11% | +53% | -44% |
| Chinese manufacturer of mechanical locksets. | |||||
The IPO market’s slow summer is set to continue, with one IPO scheduled to price in the week ahead. Other small deals may also join the calendar during the week.
After delaying its debut this past week, Virax Biolabs (VRAX) plans to raise $7 million at a $57 million market cap. Operating in the UK and Hong Kong, Virax Biolabs provides a portfolio of diagnostics test kits and med-tech and PPE products for viral diseases. The company has a limited operating history and is highly unprofitable.
| U.S. IPO Calendar | |||
|---|---|---|---|
| Issuer Business | Deal Size Market Cap | Price Range Shares Filed | Top Bookrunners |
| Virax Biolabs (VRAX)London, United Kingdom | $7M$57M | $51,350,000 | Boustead |
| UK-based provider of diagnostic tests and PPE for viral diseases. | |||
Street research is expected for one company in the week ahead.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 7/14/2022, the Renaissance IPO Index was down 47.5% year-to-date, while the S&P 500 was down 19.8%. Renaissance Capital’s IPO ETF (IPO) tracks the index, and top ETF holdings include Airbnb (ABNB) and Snowflake (SNOW). The Renaissance International IPO Index was down 32.8% year-to-date, while the ACWX was down 20.9%. Renaissance Capital’s International IPO ETF (IPOS) tracks the index, and top ETF holdings include Kuaishou (OTCPK:KUASF, OTCPK:KSHTY) and Nongfu Spring (OTCPK:NNFSF).
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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