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A new small company that combines distribution of Asian foods with indoor home products made its public debut this month.
Irvine-based Marwynn Holdings Inc. opened on the Nasdaq on March 13 at $4 per share under the ticker “MWYN,” raising $8 million in gross proceeds. Marwynn in January had anticipated a share price ranging between $4 and $5.
Marwynn, which was incorporated last year, owns and manages two businesses in the supply chain business. The bulk of its revenue, around 75%, is Grand Forest Cabinetry Inc., which provides indoor home products like kitchen cabinets. Its smaller unit, FuAn Enterprise Inc., distributes specialty grocery products from Lychee Ice Cream Bar to Japanese Kabayaki Eel Fried Rice to Shanghai Scallion Pancakes. Its biggest customer is Costco Wholesale Corp.
“We are committed to becoming a leading supply chain company in the U.S. for food, non-alcoholic beverages and indoor home improvement products,” said its prospectus.
“We wanted to form a company that could trim operations as well as consolidate resources and therefore can create some efficiency under one roof,” Chair, Chief Executive and President Yin Yan told the Business Journal.
For the past eight years, Yan has also been serving as CEO and chairperson of Bio Essence Corp., an herbal health, diet and nutrition company (OTC-Pink market: BIOE). The lightly traded penny stock is worth 21 cents each with a $7.8 million market cap. Bio Essence, which is in a unit at 12 Chrysler, reported 2023 sales fell 11% to $552,000.
Marwynn recently leased a new office space in Irvine on Jamboree Road and Main St. and has 27 full-time employees as of December.
“We’d seen that many companies in Orange County had blossomed in the past few years. They showed me a great opportunity that we could go through the public platform (and) raise capital to continue to enhance our financial position as well as increase visibility,” Yan said.
In the trading days since going public, Marwynn’s gone from as low as $3.75 to as high as $5.20 a share. At press time, it traded at $4.22 and a $71 million market cap (Nasdaq: MWYN).
Possible Acquisitions
Chicago-based American Trust Investment Services Inc. (ATIS) was the sole underwriter for Marwynn’s IPO.
“Bringing Marwynn Holdings to the public markets reflects the type of high-conviction transaction we prioritize at ATIS—one where we see a clear growth narrative, a strong management team, and real market opportunity,” ATIS Chief Executive James F. Dever told the Business Journal.
“What makes this IPO especially meaningful is the story behind it. Nearly 30 years ago, Marwynn’s founder came to the U.S. to build a life, a family, and a business. Today, through the combined efforts of ATIS and Nasdaq, that vision has become a public company. This transaction is a powerful example of how collaboration can enable the American Dream—and we’re proud to have been part of it.”
“We’re very pleased with the way the deal has been performing. We feel that $4 a share aligns very well with investor demand,” said ATIS Chief Operating Officer Ian E. Lippy. “For a small company that’s growing like this, this is the capital that’s going to take them to the next phase of growth.”
Marwynn plans to use the $8 million in proceeds to develop its supply chain management and for possible acquisitions.
“Our goal is to continue to grow our business by increasing the scale of our current operations and expanding into new services and locations,” Marwynn said in its filing.
The global market size of the packaged food and non-alcoholic beverage supply chain and brand managing solutions is an estimated $172 billion this year, growing about 6.6% annually until 2028, according to the filing that cited marketing firm Frost & Sullivan Ltd.
For fiscal 2024, which ended April 30, Marwynn’s sales rose 5.9% to $11.9 million while net income climbed 36% to $998,000. In the six-month period ended Oct. 31, sales dropped by 3.5% to $5.5 million.
Its sales to Costco decreased by 46% in fiscal 2024, particularly because of lower demand for an ice cream called “White Rabbit.”
“We are in the process of a product rotation and update for White Rabbit brand products with Costco and are waiting for Costco’s approval before we can relaunch the sale of the White Rabbit brand product,” the filing said. “We are also working with Costco on bringing more new products to their stores.”
Grand Forest supplies kitchen cabinets, flooring, sinks and other home improvement products sourced from suppliers overseas to dealers and customers. The company currently counts two cabinet stores in Santa Clara and Union City. Marwynn plans to introduce new product lines, launch an online store, open additional showrooms and add a new smart home offering.
The company lists several risk factors, such as low margins that are notorious in the distribution industry as well as the ongoing tariff disputes.
“The U.S. government is currently imposing increased tariffs on certain products imported into the U.S., including products imported from China, which may have an adverse impact on our future operating results,” the filing said.
Ships from U.S. to China as Well
Yan, who has over 20 years experience in real estate, international trade and management, is a registered lawyer admitted in NSW High Court of Australia. Yan has 94% of the voting shares of Marwynn.
Several of its executives have experience in China, such as Chief Financial Officer Zhifen Zhou, who has worked for 20 years in finance, operations and management in China and the U.S.; and Chief Operating Officer Tuan Tran, who has over 20 years in quality and operations working in the nutrition and dietary supplement industries.
It partners with Lineage Logistics LLC, which the filing described as one of the largest cold food storage and logistics companies, with over 450 warehouse locations internationally.
Marwynn’s prospectus says it also ships from the U.S. to China, where it has an office in Zhuhai City.
“As a result of our experience in shipping goods from Asia to the United States and vice versa, we have established a strong logistic and supply chain management operation,” the prospectus said. “This allows us to share our expertise to our client in terms of cost savings.”