Hong Kong eye care company seeks up to HK$571 million from IPO, attracts Pony Ma investment
C-Mer Eye Care Holdings to use big chunk of proceeds to expand on mainland
Hong Kong ophthalmic company C-Mer Eye Care Holdings said on Tuesday it was aiming to raise up to HK$571 million (US$73.1 million) from an initial public offering later this month, and that a majority of the proceeds would be used to expand its mainland operations.
Of the about 197 million shares on offer, 10 per cent would be sold in the city, with the rest for sale on global markets. The Hong Kong tranche is being offered at an indicative price range of HK$2.35 to HK$2.90, with the company targeting proceeds of between HK$468.1 million and HK$571 million.
The subscription period for the company’ shares started at the end of December and they are expected to commence trading on January 15. China Merchants Securities (Hong Kong) is the sole sponsor and book runner of the IPO.
The company has attracted investment from a number of big names, including Pony Ma Huateng, the founder of Chinese technology titan Tencent Holdings. Advance Data Services, a subsidiary wholly owned by Ma, is investing about HK$62.4 million in the company with two other cornerstone investors, investment holding companies Wah Li (Hong Kong) and Gunther Group, with the three investing a total of HK$187.2 million through the IPO.
“I won’t exclude the possibility of collaborating with Tencent in the future, but we will need more time to discuss ” said Dennis Lam Shun-chiu, company chief executive and founder, and ophthalmic surgeon.
The company, started by Lam under the brand name of C-MER Dennis Lam, became the first foreign entity to own an eye hospital on the mainland in 2013. It has four eye clinics in Hong Kong, with another set to open this year.
About HK198.8 million, or 43 per cent, of the money raised will be used for the possible acquisition of three Chinese eye hospitals, while HK$188.9 million, or about 40 per cent, will be spent on launching three hospitals on the mainland. The rest of the proceeds will be used to upgrade the company’s medical equipment and improving its information technology systems.
Deriving its revenue mainly from eye care services and surgeries, the company said Hong Kong was a very mature market, and that it expected its future growth to come from mainland cities such as Beijing, Shanghai and Guangzhou.
It plans to open two eye hospitals on the mainland this year, with one located in Beijing, while aiming to open four more in 2019, according to the company.