Ag-product firm rides organic trend in IPO

"Everyone wants to eat vegetables and mushrooms," Farmmi CEO Yefang Zhang said following her company's successful IPO on the Nasdaq Stock Market.

The Chinese organic agricultural product supplier rang the opening bell at the Nasdaq MarketSite on Monday, basking in a recent IPO that beat expectations.

In the company's initial public offering, which was on Feb 16, the Chinese New Year, it offered shares at $4 that were bid up more than 50 percent to close at $6.18.

Shares of the Lishui-based company, which trade under the ticker symbol "FAMI," increased another 11.2 percent to close at $6.67 in Monday trading.

"Listing on Nasdaq is a very important milestone for Farmmi," Zhang said on Monday. "We will strive to keep growing the business to ensure we meet our commitment to deliver the finest agricultural products.

"The IPO was higher than our expectations, and we are satisfied with that," she said. "We thought investors liked the product, but we didn't expect the price to go (so) high."

Zhang said she aims to build an "internet platform for organic and healthy eco-agricultural products".

Farmmi raised $6.72 million in its 1.68 million-share offering. The company increased the ceiling from the $5 million sought in November's original filing because of demand.

On Feb 23, ViewTrade Securities Inc, the sole underwriter, announced it had purchased an additional 252,000 ordinary shares at the IPO price of $4.

"The underwriter was full of confidence in Farmmi, so that is why we raised a higher range," Zhang said. "We have a huge market in China for organic food because China has the largest population in the world, and everyone wants to eat vegetables and mushrooms because they're healthy."

Founded in 2015, the company primarily sells shiitake mushrooms, mu er mushrooms, other edible fungi and other agricultural products - 200 in total. Farmmi hopes to raise its product offering to 5,000 in three years, Zhang said.

The company has about 100 employees and offers its products through online distributors Taobao and Jingdong Mall, as well as through an online store, Farmmi Liangpin Mall.

"We're full of confidence that we'll do better based on the role of the local geography," Farmmi said in an interview. "All mushrooms and organic foods are from a specific provinces (that) have rich and good-quality soil. That makes us competitive in a global environment."

The company's raw materials come from family farms in Lishui in Zhejiang province as well as other provinces in China. Farmmi's two processing plants are located in Lishui.

About 90 percent of the company's products are sold in China and the rest in the US, Japan, Canada, Europe and the Middle East.