Qilian International Holding Group Ltd. prepares to lift off in the first Chinese IPO of 2021 on Times Square next week, raising up to $35 million.
The price range has been set at $5 to $7 per ordinary share, for 5 million shares.
Underwriters are Univest Securities LLC, Loop Capital Markets LLC, and Alexander Capital, L.P.
Qilian sells traditional Chinese medicine products, specifically, “licorice products, oxytetracycline products, traditional Chinese medicine derivatives (TCMD) product, heparin product, sausage casings, and fertilizers.”
For the six months through March 2020, Qilian reported $27.8 million in revenue, up 2% year-over-year. It managed to lower its selling, general, and administrative expenses 18% to $1.4 million, though net income also declined to $3.9 million from 4.3 million in the same period of 2019, according to the prospectus.
The company achieved revenue growth during the period despite reduced supply of raw materials amid the Covid-19 outbreak and the early 2020 lockdowns. As it adjusted to the changing market, Qilian halted the sales of heparin products “because of a significant increase in the price of pig small intestine,” and resumed the sales in September 2020.
For the year through September 2020, Qilian estimated net revenue growth of between 5% and 8% thanks to the rebounding market conditions.
Qilian first publicly filed for a U.S. IPO in November 2019. Apparently, the Covid-19 outbreak has halted its run-up to a listing. The company picked up its listing efforts only in August 2020 and now seems to be on the final countdown.
Qilian expects to become publicly traded on Tuesday, Jan. 12, on the Nasdaq Global Market under the symbol “QLI”.
The company said it intends to use the net proceeds from the offering “for production capacities expansion, marketing purposes, and acquisition of upstream and downstream companies manufacturing traditional Chinese medicine pieces.”
Specifically, Qilian said it plans to invest $1.28 million in a new organic waste treatment facility with increased fertilizer production capacity for turning waste into high quality production materials “to reap substantial business benefits from a Chinese government proposal of ‘Zero Growth of Chemical Fertilizer and Pesticide Use by 2020’.”