Zhengye Biotechnology Holding Limited Announces Closing of Initial Public Offering

Rhea-AI Summary

Zhengye Biotechnology (Nasdaq: ZYBT), a Chinese veterinary vaccine manufacturer, has announced the closing of its Initial Public Offering. The company successfully offered 1,500,000 ordinary shares at $4.00 per share, raising gross proceeds of $6 million. Trading commenced on January 7, 2025, on the Nasdaq Capital Market under the symbol 'ZYBT'.

The company has granted the underwriter a 45-day option to purchase up to an additional 225,000 ordinary shares to cover potential over-allotments. The IPO proceeds will be allocated towards acquiring vaccine production companies and conducting R&D projects. Kingswood Capital Partners served as the sole book-running manager for the offering.

Positive

• Successful IPO raising $6 million in gross proceeds
• Nasdaq Capital Market listing achieved
• Strategic plans for acquisition and R&D investment
• Potential for additional capital through 225,000 share over-allotment option

Negative

• Relatively small IPO size of $6 million may limit growth potential
• Underwriting discounts and expenses will reduce net proceeds

Insights

IPO Analyst

The IPO of Zhengye Biotechnology represents a modest market entry with a $6 million raise at $4.00 per share. While the deal size is relatively small for a Nasdaq listing, the strategic focus on China's veterinary vaccine market positions the company in a growing sector. The allocation of proceeds towards acquisitions and R&D suggests an aggressive growth strategy.

The over-allotment option of 225,000 additional shares could potentially increase the total raise by $900,000 if exercised within the 45-day window. The involvement of Kingswood Capital as the sole book-runner indicates a boutique approach to the offering, which may impact initial trading liquidity.

For context, this IPO's size places it in the micro-cap category, which typically faces higher volatility and liquidity challenges. The China-based operation adds both opportunity and risk factors, particularly given the current regulatory environment for Chinese companies listing in the U.S.

Biotech Industry Analyst

The veterinary vaccine market in China presents significant growth potential, driven by increasing protein consumption and stricter livestock health regulations. Zhengye's integrated business model covering R&D through sales creates operational advantages, though the relatively small capital raise may limit initial expansion capabilities.

The company's focus on livestock vaccines aligns with China's emphasis on food security and agricultural modernization. The planned acquisition strategy could accelerate market penetration, while R&D investments are important for maintaining competitiveness in the rapidly evolving vaccine space.

Think of this as planting a seed in fertile soil - the Chinese veterinary market is expanding rapidly due to industrialization of farming practices and increased focus on animal health. However, the modest IPO proceeds may require careful capital allocation between acquisitions and research initiatives to achieve meaningful market impact.

Jilin, China, Jan. 08, 2025 (GLOBE NEWSWIRE) -- Zhengye Biotechnology Holding Limited (Nasdaq: ZYBT) (the "Company" or "Zhengye"), a veterinary vaccine manufacturer that encompasses research, development, manufacturing, and sales of veterinary vaccines, with a focus on livestock vaccine in China, today announced the closing of its initial public offering (the "Offering") of 1,500,000 ordinary shares at a public offering price of US$4.00 per ordinary share. The ordinary shares have been approved for listing on the Nasdaq Capital Market and commenced trading on January 7, 2025 under the ticker symbol "ZYBT."

The Company received aggregate gross proceeds of $6 million from the Offering, before deducting underwriting discounts and other related expenses. Additionally, the Company has granted the underwriter an option, exercisable within 45 days from the closing date of the Offering, to purchase up to an additional 225,000 Ordinary Shares at the public offering price, less underwriting discounts, to cover the over-allotment, if any.

Proceeds from the Offering will be used for acquiring vaccine production companies and conducting R&D projects.

Kingswood Capital Partners, LLC ("Kingswood") acted as the sole book-running manager for the Offering. Hunter Taubman Fischer & Li LLC acted as U.S. securities counsel to the Company, and VCL Law LLP acted as U.S. counsel to Kingswood 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: 333-276436) and was declared effective by the SEC on December 20, 2024. The Offering was 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 from Kingswood, Attn: Tower 56, 126 E. 56th Street, Suite 22S, New York, NY 10022, or by telephone at +1-732-910-9692. In addition, a copy of the prospectus relating to the Offering may be obtained via the SEC's website at www.sec.gov.

This press release does 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 Zhengye Biotechnology Holding Limited

Through Jilin Zhengye Biological Products Co., Ltd., the Company’s operating entity based in Jilin, China, Zhengye Biotechnology Holding Limited focuses on the research, development, manufacturing and sales of veterinary vaccines, with an emphasis on vaccines for livestock. For over 20 years, the operating entity has been committed to enhancing the health of animals. The operating entity has 44 veterinary vaccines, including vaccines for swine, cattle, goats, sheep, poultry, and dogs. The operating entity’s products are available in 28 provincial regions across China and are exported overseas to Vietnam, Pakistan, and Egypt. The operating entity has three GMP veterinary vaccine production floors, including 13 GMP vaccine production lines, one quality examination center, and one animal facility for vaccine development. The operating entity has 49 employees who have over a decade of experience in the veterinary vaccine industry. For more information, please visit the Company’s website: http://ir.jlzybio.com.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. 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. 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:

Zhengye Biotechnology Holding Limited
Investor Relations Department
Email: ir@jlzybio.com

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

FAQ

How much did Zhengye Biotechnology (ZYBT) raise in its IPO?

Zhengye Biotechnology raised $6 million in gross proceeds through its IPO by offering 1,500,000 ordinary shares at $4.00 per share.

When did ZYBT stock begin trading on Nasdaq?

ZYBT began trading on the Nasdaq Capital Market on January 7, 2025.

What is the over-allotment option for ZYBT's IPO?

The underwriter has a 45-day option to purchase up to an additional 225,000 ordinary shares at the public offering price to cover over-allotments.

How will ZYBT use its IPO proceeds?

ZYBT plans to use the IPO proceeds for acquiring vaccine production companies and conducting R&D projects.

What was ZYBT's IPO price per share?

ZYBT's IPO was priced at $4.00 per ordinary share.