The IPO Buzz: Chanson International (CHSN) Prices Slimmer IPO at $4.00 – Low End

The parent of Chinese bakery chain Chanson International Holding (CHSN) priced a slimmed-down version of its micro-cap IPO at $4.00 – the low end of its $4.00-to-$6.00 range – on Wednesday night (March 29, 2023). Chanson’s stock opened flat at $4.00 at 10 a.m. EDT today (Thursday, March 30) on the NASDAQ. By 10:12 a.m. EDT, though, Chanson hit a session low of $2.79 and then regained some ground to trade at $3.28 – down 72 cents or off 18 percent from its $4.00 IPO price – at 10:25 a.m. EDT. At pricing, Chanson’s IPO was trimmed by 360,000 shares. Chanson priced 3.39 million shares – down from 3.75 million shares in the prospectus – at $4.00 to raise $13.56 million. The IPO raised about $5.2 million less – or about 27.7 percent less – than the $18.75 million in estimated IPO proceeds, which had assumed pricing at the $5.00 mid-point on the full 3.75 million shares in the prospectus.

EF Hutton was the sole book-runner.

The stock in the IPO was offered by the Cayman Islands-incorporated holding company – and not by the underlying bakery business in China.

Chanson International Holding, based in Urumqi in Xinjiang Province in China, operates a bakery chain of 32 stores in the People’s Republic of China through Xinjiang United Family and the VIEs under the George Chanson brand in Xinjiang. The U.S. stores sell their products in New York City.  The company’s New York locations include Patisserie Chanson on West 23rd Street, where “messy chocolate croissants” are among the items featured on its website.

The company plans to use some of the IPO proceeds for expansion, the prospectus says. Chanson intends to add three to five new stores in China annually and eight new stores in the U.S. during the next five years. The stores in China and the U.S. also sell their products on their own digital platforms as well as through third-party online food ordering platforms. 

Chanson International is profitable. For the 12 months that ended June 30, 2022,  Chanson reported net income of $0.3 million ($300,000) on revenue of $16.49 million.

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