Qilian Reports Recent Financials in Anticipation of $28 Million U.S. IPO

The Chinese producer of traditional medicine, chemicals and fertilizers has updated its SEC filings, showing declining revenue.
Belinda ZhouJan 04,2020,07:55

Qilian International Holding Group Ltd., a retailer of traditional medicine in China, summited its prospectus on Thursday and reported increased income.

The Jiuquan, Gansu province-based company said that its revenue in the fiscal year through September reached $46.1 million, down 8.5% year-over-year. Net income was $5.9 million, or 18 cents per American depositary share, compared with $5.2 million, or 17 cents per American depositary share, in the corresponding period in 2018, according to the updated filing.

“QLI's operating results have improved, but revenue growth appears to be decelerating, which makes its IPO roadshow a more challenging sell to investors,” Donovan Jones, the founder of VentureDeal, said in his analysis on CapitalWatch.

Qilian is targeting to raise up to $28 million by offering 4 million ordinary shares priced between $5 and $7 each. The company said it will use 96.64% of the proceeds of its offering to increase production capacities and 3% to boost marketing, as well as for acquiring upstream and downstream companies manufacturing traditional Chinese medicine pieces.

The pharmaceutical and chemical  firm provides produces and markets traditional Chinese medicine-based health products, and those products are sold in more than 20 provinces in China, the company said in its prospectus.

Qilian's product portfolio consists of Gan Di Xin, Qilian Shan Licorice Extract, and Qilian Shan.

Gan Di Xin is an antitussive and expectorant medicine made from raw licorice materials, Qilian Shan Licorice Extract is a primary ingredient for pharmaceutical companies to manufacture traditional licorice tablets and Qilian Shan Licorice Liquid Extract is the primary ingredient for medical preparation companies to produce compound licorice oral solutions.

The total output of chemical medicines in China is expected to reach 5,252.8 thousand tons in 2022, with growth rate of approximately 8.2% from 2018, according to the National Bureau of Statistic of China and a research firm Frost & Sullivan Report. 

Qilian has applied to trade its shares on the New York Stock Exchange under the ticker symbol “QLI.” 

Univest Securities, LLC is acting as the representative and sole book-running manager.