Hangzhou Tigermed Consulting, China’s largest clinical research services firm, is seeking to raise up to US$1.38 billion in Hong Kong, in Asia’s biggest health care related fundraising so far this year.
The company, already listed on the ChiNext board in Shenzhen, is selling 107.1 million new shares or 12.5 per cent of its enlarged share capital at an indicative price range of HK$88 to HK$100 per share, according to a term sheet. The pricing represents a 14 to 24.3 per cent discount to Tigermed’s A-share closing price of 104.99 yuan on Friday.
Hangzhou Tigermed’s fundraising will see it surpass Korean drug maker SK Biopharmaceuticals, which raised US$794 million in an IPO in June, data from Bloomberg shows.
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If the company exercises its overallotment option of 16.06 million shares, representing 15 per cent of the global offering size, it could raise up to US$1.59 billion, assuming the deal gets priced at the top end.
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The Hong Kong public offering will run from July 28 to July 31, and listing on the main board is slated for August 7.
The Hangzhou-headquartered company said in its preliminary listing document that it ranked as the world’s ninth biggest clinical contract research organisation in terms of revenue in 2019, and the only Chinese firm in the global top 10, citing a study from consultancy Frost and Sullivan.
For the three months ended March, Tigermed’s net profit rose 30 per cent to 263 million yuan (US$37.6 million), from 201.9 million yuan a year ago. In 2019 its net profit rose 48.8 per cent to 974.9 million yuan from 655.2 million yuan a year earlier.
The company said while the coronavirus pandemic did not impact its bottom line for the first quarter this year, its research project and clinical trials had been impacted in China due to regulatory approval delays caused by the virus-related lockdown measures and travel restrictions. Globally, fewer medical resources have been devoted to other clinical trials as the focus is firmly on combating the coronavirus.
“There is no assurance that we would be able to maintain or increase our net profit for the year ending 2020 and beyond to the extent the Covid-19 outbreak continues to affect business operations and social activities in the markets where we operate,” it said.
Hangzhou Tigermed plans to use the proceeds to fund potential acquisitions of overseas research firms, making minority investments in other medical research companies and enhancing its services.
The deal’s joint sponsors include Bank of America, Citic Securities, Haitong International and CICC. The international tranche represents about 94.5 per cent of the global offering, leaving 5.5 per cent for the Hong Kong public offering.
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More from South China Morning Post:
- Kangji Medical investor sees more health care start-ups opting for a Hong Kong listing
- Hangzhou Tigermed gets HKEX approval, paving the way for Asia’s largest health care listing this year
- Hong Kong’s exchange sees one of its busiest IPO days ever, with seven stocks trading for the first time; two shot up 150 per cent