The Aspire PockeX Box, Aspire Global’s latest vaping device, an update from a cylinder-shaped traditional vape pen to a modern and compact box-style AIO. Credit: Aspire Global
Shenzhen-based e-cigarette maker Aspire Global filed a withdrawal request with the Securities and Exchange Commission, pulling out of its proposed listing filed last June as China’s new e-cigarette regulations make expansion, distribution, and fundraising more challenging for e-cigarette manufacturers. According to the South China Morning Post, the company did not provide a reason for the withdrawal in its filing. Aspire had originally planned to sell 15 million shares at US$7.00-9.00 each, raising US$135 million.
Per the new regulations, e-cigarette firms seeking a listing in China or abroad must seek pre-approval from the State Tobacco Monopoly Administration (STMA). Other rules include a ban on foreign investors in this sector that once attracted venture capital giants.
Founded in 2010, Aspire tobacco vaping products sell through a distribution network of more than 150 distributors in 30 countries. Its engineering teams are based in Los Angeles and Shenzen with over 200 patents in China, the US, and the European Union. The company’s draft prospectus showed that over half of Aspire’s sales last year came from Europe, with China and the US accounting for 18.5% and 10% respectively. In addition to e-cigarettes, Aspire also started marketing its cannabis vaping product under the brand Ispire in the US since late 2020.
“Our strategy is … directed at increasing our e-cigarette vaporizer technology products and developing our cannabis vapourizer technology products,” the company said in its draft prospectus.
Aside from regulations back home, Aspire also faced other regulatory headwinds that dampened US investors’ interest in Chinese investments. Starting as early as 2023, the new Holding Foreign Companies Accountable Act forces foreign companies to delist from US exchanges if they fail to turn over audit results for three straight years.
Only two IPOs by Chinese companies completed listings on US exchanges so far this year, compared with 24 deals a year ago.