New stock offering | Eagle Eye Technology-B launches its IPO today and receives cornerstone investments from Qingchi Capital, GF Fund, and other institutions.

Futu News on October 26 reported that this Tuesday$AIRDOC-B (02251.HK)$ announced plans to conduct a public offering from October 26 to 29, issuing 22.2672 million shares, including 2.2268 million shares for public offering and 20.0404 million shares for international offering, with an expected price range of HK$75.1-81.3 per share, in lots of 100 shares, and is expected to be listed on November 5.

Eagle Eye Technology was established in 2015 and is a medical device company based on artificial intelligence. According to Frost & Sullivan, the company is one of the first in China to provide non-invasive, fast, effective, and scalable early detection, diagnosis, and health risk assessment solutions for AI retinal image recognition.

In the company's product portfolio, there are three versions of Airdoc-AIFUNDUS (self-developed core product). Among them, Airdoc-AIFUNDUS (1.0) is an artificial intelligence medical device software ("SaMD") approved to assist in diagnosing diabetic retinopathy, the first medical device to obtain the National Medical Products Administration's Class III medical device certificate in the same category of products. This product has been generating revenue since the first quarter of 2021.

In terms of financial data, in 2019 and 2020, the company recorded revenue of RMB 30.415 million and 47.672 million respectively; during the same period, it recorded a net loss of RMB 87.139 million and 79.626 million. In the first six months of 2021, the company recorded revenue of 49.477 million, nearly a 660% year-on-year increase; and a net loss of 37.49 million, a narrow down from RMB 48.775 million in the same period last year.

According to the prospectus, the company's current revenue sources include (i) providing AI-based software solutions; (ii) hardware sales (referring to third-party fundus cameras sold with the software); and (iii) other services (mainly procurement services provided to customers for third-party hardware equipment and software development services customized according to customer requirements).

In terms of the industry, the Chinese AI medical imaging market is expected to increase from RMB 0.3 billion in 2020 to RMB 92.3 billion in 2030, with a compound annual growth rate of 76.7% from 2020 to 2030. In medical institutions, AI medical imaging is primarily used to assist doctors in disease detection and diagnosis, accounting for approximately 86% of the AI medical imaging market in 2020. In the context of general health, AI medical imaging is mainly used for health risk assessment.

There is still a significant amount of unmet demand for AI medical imaging in the general health context, with an expected compound annual growth rate of 102.7% from 2020 to 2030, growing faster than AI medical imaging in medical institutions.

Regarding cornerstone investors, multiple cornerstone investors have agreed to subscribe for the available shares at the offer price, totaling $69.5 million, including CloudAlpha, GF Fund, Ivy Capital, Lake Bleu Prime, LAV, LMR, OrbiMed, and WT.

In terms of fundraising usage, the net proceeds of the company amount to 1.633 billion yuan (assuming the over-allotment option is not exercised, calculated based on the median issue price). According to the prospectus, the company intends to use the net proceeds from the share issuance for the following purposes:

Approximately 50% will be allocated to continue optimizing, developing, and commercializing the core product Airdoc-AIFUNDUS; about 19% will be used to fund the research and production of hardware equipment; around 10% will be used to support ongoing and future research and development of health risk assessment solutions; about 6% will be used for developing the product portfolio to enhance early detection, diagnosis, and health risk assessment solutions using artificial intelligence for retinal image recognition; around 5% will be used to fund research projects conducted in collaboration with academic and research institutions; approximately 10% will be used for working capital and general corporate purposes.

Editor/Aurora

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