Chinese device maker Venus Medtech to raise up to $381m in HK IPO

Victoria Peak, Hong Kong. Photo by Florian Wehde on Unsplash

Venus Medtech, a Chinese company that produces heart valve replacement devices, plans to raise up to $381 million in an initial public offering (IPO) in Hong Kong next month against headwinds including civil unrest in the Asian financial hub for nearly six months.

The Chinese developer of cardiovascular devices filed paperwork with the Hong Kong stock exchange late Monday to proceed with its offering and began taking orders on Tuesday.

The company plans to offer 78.5 million shares at a price range between HK$29 and HK$33 apiece, with an expected listing on December 10. It would raise as much as $381 million if an over-allotment of shares is fully exercised.

The IPO of Venus Medtech comes as Hong Kong has suffered from almost six months of anti-government protests this year, at times forcing schools, transportation, businesses, and government to close.

The situation was further escalated after U.S. President Donald Trump on Wednesday signed into law congressional legislation supporting protesters in Hong Kong despite objections from the central government in China.

Against headwinds of the civil unrest in Hong Kong and China’s gloomy economic condition, Venus Medtech is joining a cluster of biotech companies to restore investors’ confidence in the financial market in Hong Kong.

Since the city bourse introduced new rules to allow listings of pre-profit biotech firms, 15 biotech companies have gathered a total of HK$48.6 billion ($6.21 billion) through IPOs in Hong Kong by August 2019, turning the city into the second-largest fundraising centre for biotech companies globally, according to official statistics.

Amongst these companies, eight pre-revenue biotech firms have raised HK$23.5 billion, and several IPOs have completed within the contract research organization (CRO) and medical services space.

Venus Medtech, founded in 2009, develops trans-catheter heart valve medical devices for the treatment of structural heart diseases in China. The company had a 79.3 per cent market share in the country in terms of device implants in 2018, according to Frost & Sullivan, cited in its prospectus. It counts Asia-focused private equity firm Hillhouse Capital and Singaporean sovereign wealth fund GIC among cornerstone investors.

The company, which first filed in early August, reported a loss of 138.2 million yuan ($19.7 million) in the first five months of 2019, compared with a loss of 50.2 million yuan in the same period last year.

Proceeds from the IPO will be used to commercialise its VenusA-Valve product, as well as for research and development and general corporate purposes. VenusA-Value, a self-developed product of Venus Medtech, is the first transcatheter aortic valve replacement (TAVR) device approved by China’s National Medical Products Administration and commercialised in the mainland, shows the prospectus.

Goldman Sachs, CICC, Credit Suisse and CMS are acting as joint sponsors on the deal.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.