Chanson International Holding debuted on the Nasdaq Stock Exchange under the ticker symbol “CHSN” on Thursday.
Chanson International Holding, which operates a chain of bakeries located in China and New York City, debuted on the Nasdaq Stock Exchange under the ticker symbol “CHSN” on Thursday. The company raised $13.56 million by offering 3,390,000 Class A ordinary shares at a public offering price of $4.00 per Class A ordinary share.
Founded in 2009, Chanson is a provider of bakery, seasonal, and beverage products through its chain stores in China and the United States. Headquartered in Urumqi, China, Chanson directly operates stores in Xinjiang, China and New York, United States. Chanson currently manages 33 chain stores under the “George Chanson” brand in Xinjiang and 2 stores in New York City while selling on digital platforms and third-party online food ordering platforms.
Chanson offers packaged bakery products, made-in-store pastries, and eat-in services, serving freshly prepared bakery products and extensive beverage products. Chanson aims to make healthy, nutritious, and ready-to-eat food through advanced facilities based on in-depth industry research, while creating a comfortable and distinguishable store environment for customers.
Bakery products have become more popular among Chinese consumers. According to the Frost & Sullivan Report, the retail sales value of bakery products in China had increased from approximately $24.30 billion in 2015 to approximately $31.85 billion in 2020, representing a compound annual growth rate of 5.6%.
However, the bakery product market in China and the U.S. are both highly competitive and fragmented, with a number of small to medium size manufacturers specializing in a wide variety of bakery products. As a result, the company has been trying to steadily bring in new customers and increase the frequency of its existing customers’ visits by continuously refining its product formulas and offering new products. As of December 2022, Chanson’s Chinese stores had more than 707 types of bakery products and seasonal products on sale, including over 145 types of new products introduced to the market since 2021, and the U.S. stores had 131 types of eat-in menu items and bakery products on sale, including 36 types of new products introduced to the market since 2021.
Looking into the company’s financials, for the six months ended June 30, 2022 and 2021, Chanson has earned revenue of $8,543,803 and $6,742,121, and net income of $220,793 and $422,685, respectively, despite the adverse impact caused by the COVID-19 pandemic on the retail industry. The Chinese stores accounted for 78.6% and 89.2% of the total revenue for those periods, respectively, and the U.S. stores accounted for 21.4% and 10.8%, respectively.
Revenue from the U.S. increased by $1,106,446, or 152.4%, from $725,848 for the six months ended June 30, 2021 to $1,832,294 for the six months ended June 30, 2022. The increase was due to increased revenue from all three segments of bakery products, beverage products, and eat-in services. The growth rate in revenue driven by its U.S. stores is more significant than its Chinese stores, and thus Chanson plans to use all of the net proceeds to open new stores in the U.S.
Taking advantage of the listing on the Nasdaq and the economies of scale, the company is likely to expand its multinational bakery chain business and enhance its brand image and reputation. Chanson plans to continue its expansions in China and the U.S. In particular, the company plans to open seven new stores in China and eight new stores in the U.S. this year.