Golden Meditech aims for Nasdaq float within a year
Golden Meditech, a Growth Enterprise Market-listed Chinese supplier of medical equipment, plans to list its shares on the Nasdaq Stock Market within a year.
Meditech said it would seek either a dual-listing on the GEM and Nasdaq or buy back all Hong Kong-listed shares and pursue only a Nasdaq listing.
The company's shares fell 1.17 per cent yesterday, closing at $2.10.
The plan was unveiled as the firm announced a 307 per cent profit growth to $563.82 million for the year ended March and a 17.4 per cent increase in turnover to $280.57 million. Part of the profit came from exceptional gains after selling shares of its associate, China Medical Technologies (CMED), which was listed on the Nasdaq in August last year.
Despite strong earnings growth, Meditech did not propose a dividend because of the planned Nasdaq listing, its chairman Kam Yuen said.
'We had better keep more cash in hand because the Nasdaq listing plan may cost us a lot of money,' said Mr Kam.
He said Meditech's share price might reach 35 to 40 times company earnings, based on the average of US companies in the same industry, compared with less than 10 times in Hong Kong.
He also said the Nasdaq listing was initially proposed by its US and European shareholders who would like to realise the value of their investments.
Meditech now holds about $800 million cash, $607 million of which was raised from selling its new shares in April. It booked a one-off gain of about $388 million selling 22.9 million shares of CMED.
Stripping out the exceptional gain, Meditech's net profit was about $175.8 million for the year ended March, 27 per cent higher than a year ago. The company still owns 27.1 million CMED shares, equal to a 9.9 per cent stake and worth US$60 million.
Mr Kam said the company would spend $30 million to $40 million this year, half on entering the personal health-care market and the rest on the expansion of its umbilical cord blood stem cell storage business.
Medical devices remain the core business of Meditech, generating 88 per cent of the company's turnover.
Apart from running a cord blood bank in Beijing, Meditech also develops Chinese herbal medicines and has launched a new drug called TangHerb that is aimed at boosting the immune systems of Aids patients.