SHENZHEN IVPS Technology Co., the firm behind e-cigarette device brand Smok, is considering an initial public offering (IPO) to raise at least US$500 million in Hong Kong as soon as next year, people with knowledge of the matter said.

The vaping device maker is working with an adviser to prepare for the potential share sale, said the people. The offering could raise between US$500 million and US$1 billion, the people said.

Deliberations are at an early stage and details of the potential offering such as timing and size may change, the people said. IVPS didn’t immediately respond to requests for comment.

Founded in 2010, Shenzhen IVPS makes vaping kits under its Smok brand. The devices are used by over 80 million consumers globally.

The Ministry of Industry and Information Technology proposed a draft regulation in March that would apply the same rules for the conventional tobacco industry to the e-cigarette sector.

The aim is to regulate production and marketing of new types of tobacco products and prevent false advertising and quality issues, the document said, without giving further details.

The move was seen as a further blow to the vaping industry after China banned online sales of e-cigarettes in 2019. Shares of several Chinese e-cigarette companies plunged following the draft’s release in March, and Hong Kong-listed device maker Smoore International Holdings Ltd.’s shares are down about 40 percent this year.

While rising regulatory scrutiny of the vaping industry could impact investor appetite for listings in the sector, Shenzhen IVPS could be less affected because it makes the device rather than the e-cigarette liquid, the people said. (SD-Agencies)