Chinese e-cigarette maker Kimree files for U.S. IPO

By Reuters

Sep 30, 2014 02:54 AM EDT

Chinese e-cigarette maker Kimree Inc filed to list its shares in the United States at a time when e-cigarette companies are finding it harder to raise capital amid rising competition and increasing regulatory oversight.

E-cigarettes were seen as the future for tobacco as demand for traditional cigarettes fell in many countries due to heath concerns.

However, the entry of Big Tobacco and slowing sales of e-cigarettes from a 2011 peak are weighing on independent e-cigarette makers.

Kimree's largest customer, American Accessories International LLC, sources e-cigarettes for a subsidiary of Marlboro-maker Altria Group Inc (MO.N).

E-cigarettes are slim, reusable, metal tube devices containing nicotine-laced liquids that come in exotic flavors. When users puff, the nicotine is heated and released as a vapor containing no tar, unlike conventional cigarette smoke.

The global e-cigarette market is expected to grow to $39.2 billion in 2018 in terms of retail revenue, from $4.8 billion in 2013, the company said in its filing quoting a report from market researcher Frost & Sullivan.

Kimree's net revenue grew about 57 percent to $51.3 million in the first half of 2014 from a year earlier, while net income more than doubled to $10.2 million.

Citigroup is underwriting the IPO, the Guangdong-based company told the U.S Securities and Exchange Commission in a filing on Monday.

Kimree intends to list its American depositary shares on the Nasdaq under the symbol "KREE".

The filing did not reveal how many shares the company planned to sell or their expected price.

The $125 million the company said it planned to raise is used to calculate registration fees. The final size of the IPO could be different.

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