Fantastic developments in Nasdaq-listed Chinese microcaps

The IPO window is (maybe, hopefully, please?) open again – especially for companies based in Singapore or China.

Per Renaissance Capital’s list of US market debuts last week:

• Acquisition of YHN I (YHNAU) – China
  Offer size: 60 million dollars Change: Nasdaq
  Primary insurer: Clear capital markets
  Blank check company run by executives from boutique SPAC firm Norwich Capital.

• Cuprina Holdings (CUPR) – Singapore
  Offer size: 15 million USD Change: Nasdaq
  Primary insurer: Network 1 Financial Securities
  Supplier of skin care and chronic wound care products in Singapore.

• Autozi Internet Technology (AZI) – China
  Offer size: 11 million USD Change: Nasdaq
  Primary insurer: Kingswood Capital Markets
  Sell ​​parallel import cars and auto parts in China.

• Trident Digital Tech Holdings (TDTH) – Singapore
  Offer size: 11 million USD Change: Nasdaq
  Primary insurer: The capital WallachBeth
  It provides business consulting, marketing and IT services to SMEs in Singapore.

• Powell Max (PMAX) – China
  Offer size: 8 million USD Change: Nasdaq
  Primary insurer: The capital WallachBeth
  Provides financial communication services in Hong Kong

FTAV wishes each of these companies well, although we’ll pay particular attention to Curpina given the track record of its underwriter, Network 1 Financial Securities, whose previous IPOs have both risen and fallen spectacularly. And the group’s intriguing re-emergence after a period of neglect provides as good an excuse as any to check out some of Nasdaq’s other small-cap Chinese constituents.

UTime, for example, is a Shenzhen-based, US-listed company “mainly engaged in the design, development, production, sale and operation of the brand of mobile phones, accessories and related consumer electronics”.

On Wednesday, following a sharp pivot to “disease prevention and health management on a global scale” earlier this year, the company made an interesting announcement — the signing of a non-disclosure agreement with Bowen Therapeutics, which happens to be working on a vaccine. for mpox:

SHENZHEN, China , Aug. 28, 2024 /PRNewswire/ — UTime Limited (NASDAQ: WTO ) (“UTime” or the “Company”) has officially announced the signing of a non-disclosure agreement (“NDA”) with Bowen Therapeutics Inc (“Bowen Therapeutics” ) for the acquisition of the Bowen Therapeutics laboratory at UMASS Medical School. This strategic move not only marks UTime’s deep expansion into the global vaccine market, but also provides strong support for the registration of the relevant vaccine through the US Food and Drug Administration (“FDA”). . . .

Bowen Therapeutics, which UTime plans to acquire, is a company dedicated to the research and development of vaccines for infectious diseases. His laboratory has previously published a number of research papers on the monkeypox virus and proposed a variety of potential vaccine designs. The Noval hexavalent recombinant protein vaccine developed through these studies was designed based on the characteristics of the monkeypox virus using the latest recombinant technology. The technology can effectively increase the level of virus-neutralizing antibodies and significantly enhance the protective effect of the vaccine.

Under the NDA, UTime will take over Bowen Therapeutics’ entire laboratory at UMASS Medical School and be responsible for ongoing clinical trials and future vaccine development programs. In addition, UTime will use its resources and expertise to help the monkeypox vaccine complete the FDA registration process quickly and efficiently. Using this acquisition, Bowen’s core technologies and products are also expected to be more widely used and promoted globally.

Unfortunately, investors weren’t too enthusiastic. Shares of UTimes fell 94% on Wednesday, becoming the Nasdaq’s worst-performing stock. Trading volumes were slightly higher than usual at 1,072 times the average.

Why the drop? To begin with, there are few traces online of a connection between Bowen Therapeutics and UMass Medical School.

A secretary at the university’s chancellor’s office said they had “never heard” of Bowen Therapeutics, and the company’s website is unhelpful: the group says only that it “has a team of leading scientists in many biopharmaceutical disciplines” as well as a biosafety level 2 laboratory, convenient access to many shared basic research facilities. . . and USDA accredited alpaca farms in close proximity”.

I have called Bowen Therapeutics several times to no avail and our letters to the email address listed have bounced back. A call to UTime’s headquarters in Shenzhen also went unanswered, but we’ll update this post if we hear back from either company.

Still, UTime investors had a rollercoaster ride even before the mobile phone kit company’s vaccine switch.

One day after its IPO in August 2021, UTime’s stock briefly surged 2,600%, pushing the company’s market value to around $350 million.

Shares ended the day a modest 875 percent lower, with Bloomberg reporting at the time that the move marked “the best U.S. debut since Internet service provider Freeserve Plc soared 1,261 percent during the 1999 dot-com frenzy.” .

The IPO was backed by a motley crew: Boustead Securities, which readers may recall; Brilliant Norton Securities, a Hong Kong bank that closed abruptly in early 2023; and Fosun Hani Securities, a Hong Kong securities brokerage. There is no suggestion that any of these three firms did anything wrong.

Last week second worst One US-listed China performer (per stock analysis) was AI-powered auto insurance group U-BX Technology, whose 95% drop but destroyed a 450% rally, nothing to see here that started. at the beginning of August. (ZombiEF Hutton acted as sole bookkeeper to the company’s IPO earlier this year.)

UBXG shares were allegedly sent to mom-and-pop investors via WhatsApp, according to a retail trader we spoke to who played the fool and added himself to the group chat.

WhatsApp groups like these are quite common: The WSJ published a great piece in March about a series of ads on Facebook and other social media sites that appeared to have been posted by bigwigs like Cathie Wood, Peter Lynch, Ray Dalio, Bill Ackman and Steve Cohen. The ads were all fake, of course, but they managed to entice. . .

. . . . victims to join WhatsApp groups to receive stock tips from alleged associates of high-profile investors. In reality, they are just a new interpretation of the classic pump and dump scheme. Small investors collectively lost millions of dollars. . .

. . . . Some of the victims of the Cathie Wood scam ads were directed to a Facebook page inquiring about their investment history and then to a series of WhatsApp groups. often moderated by two fictitious people who claimed to be Wood’s associates at a separate imaginary company called Red Sea Fortune Investment.

Victims were then prompted to join a “VIP room” to obtain certain shares. One victim said a fake assistant, who called herself Ava Evans, would share photos of her breakfast and flowers and ask personal questions while encouraging her to invest more with each transaction.

Judging by the tone of the messages sent, the UBXG WhatsApp group appears to have been run by “the same Red Sea syndicate” and Wisdom Capital Management, the retailer told us, referring to another fictitious firm.

Whoever is behind Wisdom and the Red Sea has been at it for a while. In January, Singapore’s sovereign wealth fund Temasek was forced to issue a press release to clarify that Wisdom Capital’s co-founder and chief investment officer were not, in fact, former Temasek employees, as the Wisdom website claimed.

Chris Brown may not be real at all. The image above (in higher resolution on Wisdom Capital Management’s site) has plenty of signs of AI generation: the glasses fade into the right eyebrow and fade into the hairline, the bank behind his left shoulder is tilted the wrong way, and the suit breast pocket line is unusually wavy. The separate pictures I found of “Chris” at a wedding are also oddly warped and blurry. We he did finds a guy who plays a lot of basketball in Sheffield who bears a striking resemblance to “Chris Brown”, but suspects it’s a total coincidence.

However, the WhatsApp trader tells us to “keep watching” another Shenzhen-based company, Baiyu Holdings, whose shares have risen 400% in the past 30 days.

Additional reporting by Sam Learner.