New Share Offering | Yun Kang Group starts soliciting for public listing today, expected to be listed on May 18th.

Futu News on May 5th reported that this Thursday$YUNKANG GROUP (02325.HK)$Announced that the IPO will be conducted from May 5th to May 11th, with the company planning to issue 0.138 billion shares, including 13.819 million shares for public offering, 0.124 billion shares for international offering, at an offer price of HKD 7.89 per share, with a board lot of 500 shares, expected to be listed on May 18th.

Covestro Group is a medical operation service provider that offers a full range of diagnostic services to healthcare institutions. According to Frost & Sullivan, by revenue, its market share in China's medical operational services market in 2020 was 3.7%.

Medical operation services primarily relate to diagnostic testing services provided to healthcare institutions, which can be divided into diagnostic outsourcing services and diagnostic testing services provided to medical communities. The company provides these diagnostic testing services to healthcare institutions in its six independent clinical laboratories ('Independent Clinical Laboratories') and on-site diagnostic centers within medical institutions, and charges diagnostic service fees based on the type and number of tests performed.

As of December 31 in 2018, 2019, 2020, 2021 and the last feasible date, the company has assisted in establishing and operating 79, 132, 199, 275, and 322 on-site diagnostic centers.

According to Frost Sullivan, by revenue, the company's market share in the diagnostic testing services of the medical consortium market in China was 12.5% in 2020. The company is still developing and expanding its business. According to Frost Sullivan, during the previous reporting period and up to the last feasible date, the company serviced approximately 1.0% of all medical consortia.

In terms of financial condition, the company's total revenue from 2019 to 2021 was 0.678 billion yuan, 1.2 billion yuan, and 1.697 billion yuan respectively, with a compound annual growth rate of 58.22% from 2019 to 2021. The net income for the same period was -31.544 million yuan, 0.26 billion yuan, and 3.82 billion yuan, respectively.

In terms of the industry, With the bullish policies in China and the increasing public awareness of medical care, China's medical operation service market is rapidly developing.The market has grown from 11.739 billion yuan in 2016 to 30.695 billion yuan in 2020, with a compound annual growth rate of 27.2%. The market is expected to increase from 30.695 billion yuan in 2020 to 47.946 billion yuan in 2025, with a compound annual growth rate of 9.3%.

At the same time,With the bullish policies and the increasing public awareness of medical care, the total market size of China's medical consortium diagnostic testing services is showing a growing trend.The market size increased from RMB 0.618 billion in 2016 to RMB 2.201 billion in 2020, with a compound annual growth rate of 37.4% from 2016 to 2020.

By 2025, the market size in China is expected to grow to RMB 5.903 billion, with a compound annual growth rate of 21.8% from 2020 to 2025.

Regarding cornerstone investors, multiple cornerstone investors have agreed to subscribe for the available shares at the offer price, totaling approximately USD 37.79 million (assuming the offer price is HKD 7.89). Cornerstone investors include Harvest Fund and Yahui Long Hong Kong.

In terms of the use of funds, the company's net proceeds amount to approximately HKD 0.761 billion (assuming the over-allotment option is not exercised, calculated at the offer price of HKD 7.89 per share). According to the prospectus, the company intends to use the net proceeds from the share sale for the following purposes:

Approximately 55% will be used to expand and deepen the medical consortium network over the next five years, about 20% will be used to upgrade and enhance the company's operation capabilities as a medical operation services provider to improve operational efficiency and digital testing services, approximately 10% will be used to expand the company's diagnostic capabilities and focus on the development of key technologies, about 5% will be used to search for potential investment and acquisition opportunities, about 5% will be allocated for recruiting and training a talent pool focusing on management and technical personnel, and the remaining 5% will be used as operating capital and for general corporate purposes.

Editor/Kelly

48K Views