China is estimated to have 287 million adult users of tobacco.
Michael Nagle/Bloomberg
Three more companies— RLX Technology, Patria Investments and Montauk Renewables —made their public market debuts Friday. The trio is a far cry from the series of biotech and tech companies that made the 2020 initial public offering market one of the busiest in years.
RLX (ticker: RLX) posted the day’s strongest performance, with shares more than doubling, while Patria (PAX) rose as much as 29% and Montauk (MNTK) gained nearly 76%.
RLX’s stock opened at $22.34 and surged 138% to hit a high of $28.61. The stock recently changed hands at $27.13, up 126.1%.
RLX’s strong performance came after the Chinese company reportedly raised $1.4 billion. It sold 116.5 million shares at $12, above its $8 to $10 price range. Citigroup is the underwriter on the deal.
Launched in 2018, RLX is a leading maker of e-cigarettes in China, which is estimated to have about 287 million adult tobacco users. The e-vapor market in China is expected to hit $11.3 billion in 2023, according to a CIC report. Sequoia Capital China will have voting power of 1% after the IPO.
RLX reported net income of 108.6 million Chinese yuan ($16 million) for the nine months ended Sept. 30, up from net income of 98 million yuan. Revenue nearly doubled to 2.2 billion yuan, according to the company’s prospectus. It had 661 employees as of Sept. 30.
Ying (Kate) Wang, RLX’s co-founder and CEO, will have voting power of 90%, the prospectus said.
Patria (PAX) also began trading. The stock opened at $21.50 and hit a high of $22. Shares recently changed hands at $20.65.
The Brazilian private-equity firm raised $511.7 million after boosting the size of its deal and selling stock for more than it had told investors to expect. The company sold 30,098,824 Class A shares at $17 each, up from the 26.65 million shares at $14 to $16 it had planned to offer.
J.P. Morgan, BofA Securities, and Credit Suisse are underwriters on the deal.
The firm has $12.7 billion in assets under management. It invests in Latin America, with more than 55 companies in its portfolio, and has 16 active funds.
The company reported $45.5 million net income for the nine months ended Sept. 30, up from $41.4 million for the same period in 2019. Revenue from services dropped 5.3% to $83.3 million, the prospectus for its IPO said. Patria employs 157 professionals, including 46 partners and directors.
Blackstone Group (ticker: BX) invested in Patria in 2010 and is selling 10 million shares in the IPO. Blackstone will have voting power of 2.7% after the IPO, the prospectus said.
Montauk Renewables (MNTK) also launched Friday. The stock opened at $13, hit a high of $14.93 and recently traded at $11.35, up 33.53%.
Late Thursday, Montauk collected nearly $26 million after selling 3 million shares at $8.50 each. That’s down from the 3.9 million shares Montauk had planned to sell, but above its $7 to $8 price range. Roth Capital Partners is the underwriter on the deal.
Montauk is a renewable-energy company that specializes in recovering and processing environmentally detrimental methane—known as”biogas”—from landfills, and other non-fossil fuel sources, to use as a replacement to fossil fuels. Plants for the Pittsburgh company convert the biogas into renewable natural gas or uses the processed biogas to produce renewable electricity, a prospectus said. Montauk operates 12 renewable natural gas and three renewable electricity projects.
Montauk is profitable, although net income dropped about 61% to $2.1 million for the nine months ended Sept. 30, from $5.4 million profit for the same period in 2019. Revenue fell nearly 10% to $75.6 million, a prospectus said. It employs 115 people.
Write to Luisa Beltran at [email protected]
