F-1/A: Oriental Rise Holdings Files Amendment No. 6 for Form F-1 Registration, Eyes Nasdaq Listing

Oriental Rise Holdings Limited, a Cayman Islands holding company with PRC-based tea operations, has filed Amendment No. 6 to its Form F-1 registration statement, signaling progress towards its initial public offering and Nasdaq Capital Market listing.

Summary

• Oriental Rise Holdings Limited, a Cayman Islands holding company, has filed Amendment No. 6 to its Form F-1 registration statement with the SEC.
• The company is pursuing an initial public offering of 2,000,000 Ordinary Shares, with a potential resale of up to 1,000,000 Ordinary Shares by Selling Shareholders.
• The company intends to list its Ordinary Shares on the Nasdaq Capital Market under the symbol ORIS.
• The initial public offering price is expected to be $4.00 per Ordinary Share.
• The company's founders will retain significant voting power post-IPO, with approximately 54.5% ownership.
• Oriental Rise conducts its operations through subsidiaries in mainland China and faces regulatory risks associated with doing business there.
• The company has completed the required filing application procedures with the CSRC for this offering.
• The document highlights risks related to the company's business, the tea industry, its corporate structure, and doing business in China.
• The company's business strategy includes expanding tea gardens, constructing a new production plant, and purchasing automatic production lines.
• The underwriters have an option to purchase up to an additional 15% of the Ordinary Shares to cover over-allotments.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook for the company, highlighting its growth potential and strategic initiatives. However, it also acknowledges significant risks associated with operating in China and the tea industry, which tempers the overall sentiment.

Positives

• The company has completed the required filing application procedures with the CSRC for this offering.
• The company's business strategy includes expanding tea gardens and constructing a new production plant.
• The company operates tea gardens of approximately 7,212,000 square meters in Zherong County, Fujian Province.
• The company has been recognized in mainland China as a Leading Enterprise in City-level Agricultural Industrialization in Ningde City in Fujian Province from 2015 through 2020.

Negatives

• The company faces regulatory risks associated with doing business in China.
• The company's organizational structure involves unique risks to investors.
• The company is exposed to legal and operations risks associated with having substantially all of its operations in China.
• The company is an emerging growth company with a limited operating history and limited sales to date.
• The company does not expect to pay dividends in the foreseeable future.

Risks

• The PRC regulatory authorities could disallow the company's operating structure.
• Changes in China's economic, political, or social conditions or government policies could materially and adversely affect the company's business and operations.
• The New Administrative Rules regarding Overseas Listings may significantly limit or completely hinder the company's ability to offer or continue to offer securities to investors.
• Restrictions under PRC law on the company's PRC Subsidiaries' ability to make dividends and other distributions could materially and adversely affect the company's ability to grow.
• Governmental control of currency conversion may limit the company's ability to utilize its cash balance effectively.
• The trading price of the company's Ordinary Shares is likely to be volatile.
• The company is dependent on its contractual management rights agreements with the village committees in respect of the cultivation of its tea leaves.

Future Outlook

The CIC Report estimates mainland China domestic sales value of white tea to approximately US$2.4 billion (RMB 16.0 billion) by 2026.

Industry Context

The document provides context on the tea industry in mainland China, including market size, geographic distribution of tea plantation regions, and competitive landscape.

Comparison to Industry Standards

• The CIC Report indicates that the percentage of revenue generated from the top five customers usually ranges from 20% to 50% and can be over 80% for some companies in the tea industry.
• The document mentions that Fujian accounts for approximately 67.2% of the total production volume of white tea in mainland China in 2021.
• The document mentions that the domestic sales value of white tea in mainland China has experienced a strong growth between 2017 and 2021, increasing from approximately US$400 million (RMB 2.9 billion) to approximately US$1.3 billion (RMB 9.1 billion), representing a compound annual growth rate of approximately 32.80%.

Related Party Transactions

• The company has entered into an employment agreement with its Chief Executive Officer Dezhi Liu and its Chief Financial Officer Bangjie Hu.
• The company has, from time to time, taken advances from Zhuo Wang, its Director and the beneficial owner of 28% of its ordinary shares, and from Chun Sun Wong, the beneficial owner of 48% of its ordinary shares.
• On January 19, 2023, the company issued 4,480,000 ordinary shares to WZ Global (BVI) Limited, a company controlled by its Director Zhuo Wang, for consideration of $2,240,000.

Stakeholder Impact

• Shareholders: Potential for capital appreciation and dividends (though no dividends are expected in the near future).
• Employees: Continued employment and potential for career growth.
• Customers: Access to high-quality tea products.
• Suppliers: Continued business relationships.
• Creditors: Repayment of debt obligations.

Next Steps

• Complete the initial public offering of 2,000,000 Ordinary Shares.
• Obtain approval for listing on the Nasdaq Capital Market.
• Implement business strategies to expand tea gardens, construct a new production plant, and purchase automatic production lines.

Key Dates

Keywords

Ordinary Shares, Oriental Rise Holdings, Registration Statement, Initial Public Offering, Nasdaq, Tea Industry, China, CSRC, Filing, Securities