IPO | Clear Medical is now offering shares and is expected to go public on February 18

Futu News, January 31, this Monday$CLARITY MEDICAL (01406.HK)$ It was announced that it will issue 136 million shares from January 31 to February 10. The company plans to issue 136 million shares, of which 13.6 million shares will be publicly sold and 122.4 million shares will be sold internationally. The issue price is HK$1.6-3 per share, and 1,250 shares per lot. It is expected to be listed on February 18.

Clarity Medical is a private medical institution specializing in ophthalmology. It provides ophthalmology services to patients at Hong Kong Central Medical Centre and Mongkok Medical Center. It focuses on providing various refractive treatment services, including SMILE surgery, multi-focal intraocular lens replacement, and implantable contact lens implantation. In addition, it also provides patients with different treatments for other eye problems.

According to the Frost & Sullivan report, in terms of revenue from ophthalmology services, the Group ranked fourth among all private medical institutions in Hong Kong in 2020, with a market share of 5.0%.

In terms of financial conditions, the company's revenue increased by approximately 5.7% from approximately HK$207 million in 2019 to approximately HK$218 million in 2020, and further increased to approximately HK$222 million in 2021 (year ended March 31). For the three years ended 31 March 2021 and the four months ended 31 July 2021, net profit attributable to company owners was approximately HK$30 million, HK$26.4 million, HK$35.8 million and HK$5.1 million, respectively.

On the industry side, due to the high growth rate between 2016 and 2020, the market size of the private sector for ophthalmology services in Hong Kong surpassed the public sector in 2020. According to Frost & Sullivan's analysis, in terms of revenue, the market size of the private ophthalmology services market in Hong Kong increased from HK$3.5 billion in 2016 to HK$4.3 billion in 2020, with a compound annual growth rate of 5.4%.

In terms of fund-raising purposes, the company's net income was approximately HK$246 million (assuming no over-allotment rights were exercised, calculated at the median issue price). According to the prospectus, the company intends to use the net proceeds from the sale of shares for the following purposes:

44.8% was used to establish two new medical centres in Hong Kong, China to provide ophthalmology services, 30.5% to acquire majority and/or minority interests in one or two eye clinics, ophthalmology clinics or eye hospitals in selected cities in the Greater Bay Area, 14.7% to set up ophthalmology clinics with suitable partners in mainland China to provide ophthalmology services, and 10.0% for working capital and other general corporate purposes.

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