Shengfeng Development Ltd. (SFWL), the parent of one of China’s leading B2B freight logistics companies, downsized its micro-cap IPO at pricing – to 2.4 million shares – down from 3.0 million shares in the prospectus – and priced the IPO at $4.00 – the low end of its $4.00-to-$5.00 range. The IPO was priced Thursday night (March 30, 2023). Shengfeng’s stock rose 10 cents to open at $4.10 at 10:33 a.m. EDT today (Friday, March 31, 2023) on the NASDAQ. Volume on the opening trade: 190,931 shares.
Shengfeng’s IPO raised $9.6 million – or $3.9 million less than the estimated IPO proceeds ($13.5 million) in the prospectus.
Shengfeng’s IPO was among several micro-cap deals with Chinese roots that were delayed last September after NASDAQ stepped up its scrutiny of these small-cap deals. NASDAQ began giving these exceptionally small deals a much more rigorous review after some wild opening-day swings by some IPOs in this category last year.
Univest Securities was the sole book-runner of Shengfeng’s IPO. The stock was issued by the Cayman Islands-incorporated holding company – and not by the underlying business in China.
Shengfeng Development says that its VIE subsidiary, Shengfeng Logistics, is one of China’s leading independent B2B freight logistics companies.
For the 12 months that ended June 30, 2022, Shengfeng Development earned net income of $7.4 million on revenue of $348.9 million.