Park Ha Biological Technology Co., Ltd. Announces Pricing of $4.8 Million Initial Public Offering

Rhea-AI Summary

Park Ha Biological Technology, a Chinese skincare company, announced the pricing of its Initial Public Offering (IPO) of 1,200,000 ordinary shares at $4.00 per share, expecting to raise $4.8 million in gross proceeds. The shares will trade on the Nasdaq Capital Market under symbol PHH starting December 27, 2024.

The underwriters have a 45-day option to purchase up to 180,000 additional shares. The IPO proceeds will fund expansion of directly-owned stores in China, purchase of product patents for proprietary products, and acquisition of ingredient suppliers to reduce production costs. Dawson James Securities and D. Boral Capital are serving as underwriters for the offering, which is expected to close around December 30, 2024.

Positive

• IPO will raise $4.8 million in gross proceeds
• Nasdaq Capital Market listing approval secured
• Firm commitment basis offering structure
• Strategic use of proceeds for store expansion and vertical integration

Negative

• Relatively small IPO size might limit market liquidity
• Potential dilution from underwriters' option for additional 180,000 shares

Insights

Financial Analyst

Park Ha Biological Technology's IPO reveals a strategic market entry with notable implications for the skincare industry. The $4.8 million raise at $4.00 per share, while modest by typical IPO standards, provides essential capital for three critical growth initiatives. The planned allocation towards store expansion, patent acquisition and vertical integration through supplier acquisition demonstrates a comprehensive approach to value chain optimization.

The firm commitment underwriting structure, backed by Dawson James Securities and D. Boral Capital, adds credibility to the offering. The 45-day overallotment option for an additional 15% of shares ($720,000 potential additional capital) provides flexibility for market stabilization and additional funding. The company's strategy to invest in proprietary product development while simultaneously pursuing vertical integration through ingredient supplier acquisitions suggests a focus on margin expansion and competitive differentiation in the crowded skincare market.

However, investors should note the relatively small float of 1.2 million shares, which could lead to significant price volatility post-listing. The timing of the IPO, amid challenging market conditions for Chinese companies listing in the US, warrants careful consideration of geopolitical and regulatory risks.

Market Research Analyst

This IPO represents a calculated entry into the premium skincare market segment, with Park Ha's focus on private label development aligning with growing consumer demand for personalized beauty solutions. The company's three-pronged expansion strategy targets key industry pain points:

• Retail footprint expansion to enhance direct consumer engagement
• Patent acquisition to build proprietary technology moat
• Supply chain optimization through vertical integration

The Chinese skincare market's robust growth trajectory, coupled with increasing consumer sophistication and preference for premium products, provides a favorable backdrop for Park Ha's expansion. The franchise alliance model suggests potential for rapid scalability with controlled capital expenditure. The decision to list on Nasdaq rather than domestic exchanges indicates ambitions for international brand recognition and access to global capital markets.

Wuxi, China, Dec. 26, 2024 (GLOBE NEWSWIRE) -- Park Ha Biological Technology Co., Ltd. (the "Company"), a company focused on developing private skincare labels, direct skincare product sales, and franchise alliance promotions, today announced the pricing of its initial public offering (the "Offering") of 1,200,000 ordinary shares at a public offering price of $4.00 per ordinary share. The ordinary shares have been approved for listing on the Nasdaq Capital Market and are expected to commence trading on December 27, 2024 under the ticker symbol "PHH."

The Company expects to receive aggregate gross proceeds of $4.8 million from the Offering, before deducting underwriting discounts and other related expenses. In addition, the Company has granted the underwriters a 45-day option to purchase up to an additional 180,000 ordinary shares at the public offering price, less underwriting discounts. The Offering is expected to close on or about December 30, 2024, subject to the satisfaction of customary closing conditions.

Net proceeds from the Offering will be used for (i) expanding the scale of directly-owned stores in the PRC; (ii) purchasing existing product patents to develop proprietary products; and (iii) acquiring ingredient suppliers to reduce production costs over the long term.

The Offering is being conducted on a firm commitment basis. Dawson James Securities, Inc. and D. Boral Capital LLC acted as underwriters for the Offering (the “Underwriters”). Ortoli Rosenstadt LLP is acting as U.S. securities counsel to the Company, and Hunter Taubman Fischer & Li LLC is acting as U.S. securities counsel to the Underwriters in connection with the Offering.

A registration statement on Form F-1 relating to the Offering was filed with the U.S. Securities and Exchange Commission (the "SEC") (File Number: 333-281783) and was declared effective by the SEC on December 20, 2024. The Offering is being made only by means of a prospectus, forming a part of the registration statement. Copies of the prospectus relating to the Offering may be obtained, when available, from Dawson James Securities, Inc. by standard mail to Dawson James Securities, Inc., 101 N. Federal Highway Suite 600 Boca Raton, Florida 33432, or by email at investmentbanking@dawsonjames.com, or by telephone at +1(561)-391-5555; or from D. Boral Capital LLC by standard mail to D. Boral Capital LLC, 590 Madison Ave 39^th Floor, New York, NY 10022, or by email at info@dboralcapital.com, or by telephone at +1(212)-970-5150. In addition, copies of the prospectus relating to the Offering may be obtained via the SEC's website at www.sec.gov.

Before you invest, you should read the prospectus and other documents the Company has filed or will file with the SEC for more information about the Company and the Offering. This press release has been prepared for informational purposes only and shall not constitute an offer to sell, or the solicitation of an offer to buy any of the Company's securities, nor shall there be any offer, solicitation or sale of any of the Company's securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

About Park Ha Biological Technology Co., Ltd.

Established in 2016, Park Ha Biological Technology Co., Ltd. is primarily engaged in developing its private skincare label, direct skincare products sales and franchise alliances promotions under the proprietary brand “Park Ha”, with a commitment to providing cost-effective solutions to skin problems and improving the confidence of women in need of skin treatment. As of April 30, 2024, the Company has two directly operated stores and 43 franchisees, of which 41 and two operate under the store name “Park Ha” and “Geni” respectively, in China. As part of its value-added service for the products, the Company offers “light beauty experience”, a quick complimentary after-sales beauty service performed in the directly-operated stores and franchise stores. For more information, please visit the Company’s website: http://ir.parkha.cn/.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements, including, but not limited to, the Company's proposed Offering. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs, including the expectation that the Offering will be successfully completed. Investors can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or other similar expressions in this prospectus. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the SEC.

For more information, please contact:

Park Ha Biological Technology Co., Ltd.
Investor Relations Department
Email: ir@parkha.cn

Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com

FAQ

What is the IPO price and size for Park Ha Biological Technology (PHH)?

Park Ha Biological Technology's IPO consists of 1,200,000 ordinary shares priced at $4.00 per share, totaling $4.8 million in gross proceeds.

When will PHH stock start trading on Nasdaq?

PHH stock is expected to commence trading on the Nasdaq Capital Market on December 27, 2024.

How will Park Ha Biological Technology use its IPO proceeds?

The company will use the proceeds to expand directly-owned stores in China, purchase product patents for proprietary products, and acquire ingredient suppliers to reduce production costs.

What is the underwriters' option in the PHH IPO?

The underwriters have a 45-day option to purchase up to an additional 180,000 ordinary shares at the public offering price, less underwriting discounts.

When is the expected closing date for Park Ha Biological Technology's IPO?

The IPO is expected to close on or about December 30, 2024, subject to customary closing conditions.