Hygeia, a Chinese oncology healthcare service provider backed by Warburg Pincus, is targeting to float shares through an initial public offering (IPO) in Hong Kong.
Shanghai-based Hygeia, which filed a prospectus with the Hong Kong stock exchange (HKEX) on Monday (February 17), is yet to set the pricing terms of the IPO.
An April 2019 Bloomberg report, citing people with knowledge of the matter, had said that the company could raise about $200 million in the offering. The sources said that the firm had intended to sell shares as soon as the second half of 2019.
Hygeia, formally known as Hygeia Healthcare Holdings Co Limited, mainly engages in the private hospital operations and management, and third-party radiotherapy business.
With the growing demand for oncology healthcare services, the total revenue of oncology healthcare service market in China is projected to grow at a compound annual growth rate (CAGR) of 11.9 per cent from 2019 to 2024, reaching 658.3 billion yuan ($94 million) in 2024, according to Frost & Sullivan cited in the prospectus.
The company primarily generates revenue from operating self-owned private for-profit hospitals to deliver oncology healthcare services. It also earns money from the provision of radiotherapy centre consulting services, licensing of proprietary stereotactic radiotherapy (SRT) equipment, and provision of related maintenance and technical support services, among others.
Hygeia’s revenue increased by 44.7 per cent year-on-year to 889.7 million yuan ($127 million) for the 10 months ended October 31, 2019. The adjusted net profit grew by 82.0 per cent year-on-year to 136.4 million yuan ($19 million) for the 10 months ended October 31, 2019, according to the prospectus.
Founder Zhu Yiwen, and his daughter Zhu Jianqian are the largest shareholders of Hygeia with a 23.23 per cent and 34.48 per cent stake, respectively.
Warburg Pincus came third with a 17.24 per cent stake. The New York-based private equity major invested in Hygeia in 2015, shows the company website.
CITIC Capital, the flagship alternative investment arm of Chinese financial conglomerate CITIC Group, owns 5.17 per cent shares through an affiliate, while Chinese biotech major WuXi AppTec holds 2.37 per cent shares.
Morgan Stanley and Hong Kong-based Haitong International are the joint sponsors of the deal.