Chinese surgical instruments manufacturer Kangji Medical is set to raise up to $404 million through its initial public offering (IPO) in Hong Kong. The company joins a growing list of Chinese firms now taking advantage of increased investor interest in medical-related stocks in Hong Kong.
Kangji Medical has set an indicative price range for its stocks of HK$12.36 to HK$13.88 per share. The offering of its stocks in Hong Kong is scheduled to start today, Tuesday, and last until Friday, June 19. The company's stocks will then be listed on the exchange's main board on June 29 after it announces its final pricing. Goldman Sachs, Citic Securities, and Bank of America are acting as the listing's bookrunners.
Major investors in the company such as Hillhouse Capital, FMR, BlackRock, Cormorant Asset Management, Lake Bleu Capital, Oaktree Capital, and OrbiMed Capital have already committed to buying a combined $165 million worth of the IPO's international placement tranche. Based on its 2021 expected earnings, the company is set to have a price-to-earnings multiple of up to 29.4 times.
Depending on the demand for its stock, US private equity firm TPG is set to sell an additional 33.81 million Kangji shares as part of an overallotment option. TPG is one of Kangji's largest investors. The company initially invested in the Chinese firm back in 2017, purchasing a 25 percent stake in the company when its stock prices were still worth about 76.84 yuan per share.
Since then, the company has grown significantly after expanding its operations throughout the nation. Last year, the company reported an annual net profit of 326.74 million yuan, a 46 percent increase compared to its profits in 2018. According to its preliminary prospectus filing in Hong Kong, Kangji plans to use the proceeds of the share sale to further expand its production capabilities. The company also plans to bolster its research and development activities as well as fund possible acquisitions.
Four Chinese healthcare companies have floated their stocks in Hong Kong so far this year, raising a combined $1.25 billion. In Shanghai, 13 healthcare companies have completed their share sales worth a combined $1.69 billion.
Another healthcare company that is planning to float its shares in Hong Kong is Shanghai-based radiotherapy service provider Hygeia Healthcare. The company is aiming to raise between $300 million and $400 million through its Hong Kong IPO. Hygeia Healthcare is expected to launch its IPO sometime this month at the earliest. Immunotherapy biopharmaceutical firm Immunotehc Biopharm is also set to launch an IPO in the city.
