IPO | Maingene will be offering shares now and is expected to go public on June 22

Futu News, June 10, this Friday$MEGA GENOMICS (06667.HK)$The announcement was announced that the shares will be offered from June 10 to 15. The company plans to issue 11.9618 million shares, including a public sale of 1.1962 million shares and an international sale of 10.765,600 shares, with an issue price of HK$18-22 per share and 200 shares per lot. It is expected to be listed on June 22.

Meiyin Gene is a leading genetic testing platform company in China, focusing on consumer-grade genetic testing and cancer screening services. According to Frost & Sullivan, the company is the largest consumer-grade genetic testing platform in China. Based on the number of tests carried out in 2020, the company's market share exceeds 60%, and the number of tests carried out is more than ten times that of the second largest. In terms of revenue for the same year, the company's market share was 34.2%, ranking first in China, greater than the sum of the second to sixth places.

As of December 31, 2021, since the company was founded in 2016, the company has carried out more than 12 million genetic tests, with an average of more than 246,000 tests per month in 2021.

The company's consumer-grade genetic testing services provide a full range of genetic testing services, covering various fields of expertise, including nutrition and metabolism, cancer risk assessment, chronic disease susceptibility, pharmacogenetic testing and infectious disease testing. The company's testing services help consumers understand their unique physical characteristics and make better decisions about their lifestyle, diet, and medication. The company's cancer screening genetic testing provides consumers and healthcare providers with a non-invasive method to detect colorectal cancer and stomach cancer at an early stage.

According to Frost & Sullivan, the company is the largest cancer screening genetic testing platform in China based on the number of tests carried out in 2020. In the cancer screening market, as of December 31, 2021, the company is the only company that has carried out more than 453,000 tests, and in 2020, its cancer screening service recorded a gross margin of 80.5%. Both indicators are far higher than the average of the same industry in China in 2020.

On the financial side, from 2019 to 2021, the company generated total revenue of RMB 124 million, RMB 203 million and RMB 237 million respectively. Net profit of RMB30 million, RMB79 million and RMB79 million were recorded respectively for the same period, and gross profit of RMB78 million, RMB 146 million and RMB 167 million respectively.

On the industry side, according to Frost & Sullivan, the current size of the consumer genetic testing market in China reached 68.5 million US dollars in 2020. It is expected to increase to 445.1 million US dollars in 2025, with a compound annual growth rate of 45.4% from 2020 to 2025, and a compound annual growth rate of 42.4% from 2025 to 2030, which is far higher than the growth rate of the US market.

In the field of cancer screening, the top five cancers in China's cancer screening market include stomach cancer, colorectal cancer, lung cancer, breast cancer, and liver cancer. In 2020, the comprehensive cancer screening market for these five cancer types was RMB 8.8 billion.

In terms of cornerstone investors, the prospectus shows that the company has signed cornerstone investment agreements with Nanchang Finance, Nanchang Industrial Control Park and Mike Biotech. Nanchang Finance, Nanchang Industrial Control Park and Mike Biotech will respectively subscribe for shares of 29.7 million yuan, 69.3 million yuan and 49.5 million yuan for a total amount of 148.5 million yuan.

In terms of funding, the company plans to use the net proceeds from the global sale for the following purposes: about 30% will be used for sales, marketing and commercialization of consumer-grade genetic testing and cancer screening services and products, about 25% will be invested in R&D companies' services and products, about 20% will be used to increase or expand testing capacity and production capacity, and 15% will be used for attractive technology or testing related companies that complement and collaborate with the company's existing business through investments or acquisitions to fund the expansion of the company's entire industry value chain; about 10% is expected to be used as working capital and other general corporate purposes.

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