IPO pricing | Clear Healthcare received 6.17 times more subscriptions, priced at HK$1.6 per share

Futu News, February 17, this Thursday$CLARITY MEDICAL (01406.HK)$The announcement announced that the company will issue 136 million shares, priced at HK$1.6 per share, and 1,250 shares per lot. It is expected to go public on February 18.

At the public sale stage, Clear Medical received 6.17 times more subscriptions. The final number of shares sold to the public sale was 13.6 million shares, accounting for about 10% of the total number of shares offered (before any over-allotment rights were exercised).A total of 8,642 valid applications were received. The first-hand winning rate was 40%, and the 8-hand subscription won the first hand.

Furthermore, the international offering has been slightly oversubscribed, and the final number of shares offered is approximately 122.4 million shares, equivalent to about 90% of the total number of shares offered (before any over-allotment rights are exercised). Futu News has compiled relevant data in the following table:

The company's net proceeds of approximately HK$177.3 million (assuming no over-allotment rights are exercised) will be used for the following purposes: 44.8% for the establishment of two new medical centres in Hong Kong, China to provide ophthalmology services; 30.5% for the acquisition of 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% for the establishment of ophthalmology clinics in mainland China with suitable partners to provide ophthalmic services; and 10.0% for working capital and other general corporate purposes.

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%.

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