4 Companies To Join Hot IPO Market This Week, Bringing Exposure to Vaping Sales In China And Luxury E-Commerce

The hot IPO market continues with four more additions in the shortened four-day trading week ahead.

Here's a preview of what's coming.

Dream Finders Homes: One of the nation’s fastest growing homebuilders is set to go public this week under the Nasdaq ticker symbol DFH with an offer of 9.6 million shares at a price point of $12 to $15.

The company designs, builds and sells homes in high-growth areas like Jacksonville and Orlando, Florida; Austin, Texas; Denver and Washington, D.C. The company also offers title and mortgage banking services.

Dream Finders acquired H&H Homes in Oct. 2020, which gives it access to fast-growing markets like Raleigh and Charlotte. Dream Finders Homes sold its first home in 2009 and has sold over 9,100 since then. The H&H acquisition made it the 11th largest private homebuilder based on 2019 revenue, according to the prospectus.

The company says it has been profitable every year since inception. Revenue was $672.7 million for the first nine months of 2020, or $843.6 million with H&H factored in. Revenue for fiscal 2019 was $744.3 million and $976.6 million with H&H included.

Dream Finders Homes has a return on equity of 41% as of September, compared to an industry average of 15% for public homebuilders, according to the prospectus.

The first nine months of 2020 were the company's most successful months for new-order volume in its history.

MYT Netherlands: This luxury e-commerce company owns the Mytheresa brand and is seeking to sell 15.65 million shares at a price point of $16 to $18. It will be listed on the New York Stock Exchange under the ticker symbol MYTE.

The company has brand relationships with Alexander McQueen, Burberry, Dolce & Gabbana, Gucci and Prada.

MYT ended the last fiscal year with 486,000 active customers, according to the prospectus. The company shipped over 1,092,000 orders to 133 countries in the last fiscal year, representing 449.5 million euros in revenue. Sales have grown at a compounded annual growth rate of 25% in the last four fiscal years.

The company expanded into the kids' category and men’s category in 2019 and 2020, respectively, which could be growth areas in the future. The company has retained 100% of its brand partners since inception, according to the prospectus. The online luxury market is expected to triple from 33 billion euros ins 2019 to 115 billion euros in 2025.

Related Link: Playtika IPO: What Investors Need To Know

Patria: Private market investment firm Patria plans on offering 26.65 million shares under the Nasdaq ticker symbol PAX, at a price point of $14 to $16. 

The company has over 30 years' experience in the industry and has $14 billion of assets under management. The company’s investment portfolio is made up of more than 55 companies.

Patria has been an investment of partner Blackstone Group since 2010.

The company intends to pay dividends as a public company. Around 85% of distributable earnings will be paid out to shareholders, according to the prospectus.

RLX Technology: This Beijing-based company sells vaping products for smokers and claims to be the No. 1 "e-vapor" brand in China. It is set to make its public debut on the New York Stock Exchange under the ticker symbol RLX.

RLX Technology had a 48% market share in 2019 and 62.6% in the first nine months of 2020 for e-vapor in China, according to the prospectus. The company sold 4.3 million devices and 73.8 million cartridges in 2019. In the first nine months of 2020, the company sold 5.6 million devices and 124.6 million cartridges.

Revenue for RLX Technology was $228.2 million in fiscal 2019 and $324.2 million for the first nine months of 2020.

E-vapor was a $1.5 billion market in China in 2019 and is expected to grow to $11.3 billion by 2023, the company says. China had 286.7 million tobacco users as of 2019. This ranks China first in the world and significantly higher than the U.S. total of 33.8 million tobacco users, good for fourth place on the list. Companies like RLX Technology, which claims strong brand awareness and products found in over 100,000 retail outlets and 250 Chinese cities, stand to benefit from tobacco users who switch to vaping products.

The company plans to sell 116.5 million American depositary shares at a price point of $8 to $10.

Photo by Thorn Yang from Pexels.