IPO Pricing | Ligao Health Life was subscribed 1.99 times, priced at HK$4.1 per share

Futu News, March 30, this Wednesday$REDCO HEALTHY (02370.HK)$An announcement was issued. The company issued 50 million shares, priced at HK$4.1 per share, and 500 shares per lot. It is expected to be listed on March 31.

During the public sale phase, Ligao Health Life was subscribed about 1.99 times. The final number of shares distributed up to the public sale was 5 million shares, accounting for about 10% of the total number of shares offered (before any overallotment rights were exercised). A total of 1,671 valid applications were received. The first-hand winning rate was 48.62%, and the first-hand subscription was stable.

Furthermore, the international offering was slightly oversubscribed (about 1.14 times), and the final number of shares offered was 45 million shares, equivalent to about 90% of the total number of shares offered (before any overallotment rights were exercised). Futu Information collates relevant data in the following table:

The net proceeds of approximately HK$156 million will be used for the following purposes: about 55% will be used to seek selective strategic investment and acquisition opportunities to further expand the scale and geographical coverage of the business and expand the service portfolio; about 15% will be used to upgrade IT infrastructure and enhance smart community management; about 10% will be used to enhance lifestyle management services to enhance customer experience and satisfaction; about 10% will be used to expand community health services as health stewards; and about 10% will be used for general business purposes and working capital as the company continues to expand its business scope and scale.

According to reports, Ligao Healthy Living was split from$REDCO GROUP (01622.HK)$The company is a leading property management service provider in Jiangxi Province. The service network covers strategically important core regions such as the Yangtze River Delta region, the Greater Bay Area, the Bohai Rim region and central China.

As of September 30, 2021, the company has a total of 91 projects under management, with a total construction area of 15.1 million square meters, and the company has contracted to manage 133 projects located in 28 cities in 11 provinces, cities and autonomous regions of China, with a total contract construction area of 23.5 million square meters.

In terms of financial data, the company achieved steady growth during the record period. From 2018 to 2020, the company recorded revenue of RMB 124 million, RMB 181 million and RMB 222 million respectively, with a compound annual growth rate of 33.5%; net profit of RMB 11.122 million, RMB 29.804 million and RMB 44.01 million during the same period was achieved, with a CAGR of 99.1%. In the first nine months of 2021, the company recorded revenue of RMB 260 million and net profit of RMB 27.535 million.

On the industry side, in recent years, with rapid urbanization and continuous growth in per capita disposable income, the construction area and number of properties managed by the top 100 property service companies have increased rapidly. The average total floor area under management of the top 100 property service companies increased from about 23.6 million square meters in 2015 to about 48.8 million square meters in 2020, with a compound annual growth rate of about 15.63%.

Due to the increase in the floor area and number of properties under management, the average revenue of the top 100 property service companies increased from approximately RMB 540.8 million in 2015 to approximately RMB 1,173 million in 2020, with a CAGR of approximately 16.7%.

236K Views