E-cigarette manufacturer Kimree files for a $125 million US IPO

Kimree, which designs and manufactures electronic cigarettes for US tobacco companies, filed on Monday with the SEC to raise up to $125 million in an initial public offering.

Kimree claims it was the second largest e-cigarette designer and manufacturer in the world in terms of both revenue and production volume in 2013. The company recently launched its own brand of rechargeable e-cigarette, which it distributes through e-commerce channels. Its top five largest customers accounted for 94% of revenue in the 1H14, and its largest customer, which sources e-cigarettes to Altria, was 79% of sales. Customers in the US represented 90% of sales in the 1H14 and the EU represented 9% of sales.

Revenue increased 57% to $51 million during the six months ended June 30, 2014. Gross profit doubled to $20 million as gross margin expanded about over 8 percentage points to 39%. Operating income spiked 114% to $14 million.

Another e-cigarette company, Electronic Cigarettes International Group (ECIG), filed for a $173 million uplisting to the NASDAQ in May, and could launch soon.

The company is owned by its six founding Directors.

The Huizhou, China-based company, which was founded in 2010 and booked $98 million in sales for the 12 months ended June 30, 2014, plans to list on the NASDAQ under the symbol KREE. Kimree initially filed confidentially on July 10, 2014. Citi is the sole bookrunner on the deal. No pricing terms were disclosed.