Tian Ruixiang (TRX) Picks up U.S. IPO Efforts, Reports 35% Revenue Drop

The Chinese insurance broker, seeking to raise up to $13.5 million in IPO, posted weakened performance for the year through October 2019.

Author: CapitalWatch Staff   

Tian Ruixiang Holdings Ltd. (TRX) has updated its filing with the SEC, showing weakened performance in the year ended October 2019.

The Beijing-based insurance broker reported its revenue declined 35% year-over-year to $2 million in the twelve-month period. Net income, TRX said in its prospectus, was $175,000 compared with $1.1 million in the year through October 2018.

TRX seeks an initial public offering of up to $13.5 million on the Nasdaq Capital Market. It hopes to sell 3 million Class A ordinary shares in the price range of $4 to $4.5 apiece.

The company operates an insurance broker through its variable interest entity (VIE), TRX ZJ, and its subsidiaries in China. It sells "(1) property and casualty insurance, such as automobile insurance, commercial property insurance, liability insurance; and (2) life insurance, such as individual and group life insurances," TRX said in its prospectus.

TRX does not assume underwriting risks, but rather sells other agencies products. It generates revenues from commissions paid by those insurance agencies. In the year through October, 80.3% of its commissions came from TRX's top five insurance partners, according to the filing.

As of October 2019, TRX had 1,182 customers and now operates eight branches in China. Over the next two years, the company plans to launch between 10 to 15 more branches, it said. For that it wants to use the majority of the capital from the IPO.

The company first filed for an IPO in December, when it could yet show a 5% year-over-year improvement in revenue for the six months through April 2019.

Tian Ruixiang has reserved the symbol "TIRX" for its listing.

Network 1 Financial Securities Inc. is securing the deal.