(CapitalWatch, Jan. 7, New York) China's QinHong International Group has applied for an initial public offering in New York, targeting to raise up to $15 million to scale up its operations in financial facilitation and referral business.
QinHong is a holding company with two VIEs in Chengdu, Sichuan province, launched in 2017. The company offers small- and medium-sized enterprises and institutions services related to the monetization of negotiable instruments, accounts receivable, and other rights to payment (RTPs).
For the year ended June 2021, QinHong generated $1.3 million in revenue, up 40% from the preceding 12 months. Net income nearly doubled year-over-year to about $1.2 million, according to the prospectus.
In the disclaimer on the regulatory risks, QinHong said in its filing that the company has not engaged in any monopolistic behavior and its business does not involve the collection of user data or involve cybersecurity. Further, under the current laws, the company is not mandated to seek clearance from Chinese authorities for a listing overseas.
The company seeks to sell 3.75 million ordinary shares at $4 apiece on the Nasdaq Capital Market under the ticker symbol "QHI."
QinHong said it intends to use the IPO capital to expand its business by hiring and training new employees, boosting marketing, and building an online platform to facilitate the monetization of negotiable instruments. A significant portion of the funds is planned for entering into the factoring business, the company said. Lastly, a portion of the capital will fund a 15-month escrow account under an agreement with the underwriters.
The Benchmark Co. LLC and Axiom Capital Management Inc. are the joint bookrunners on the IPO. Upon the flotation, they may acquire an additional 562,500 ordinary shares of QHI to cover any over-allotments.