PE-backed Lu Daopei Medical files for Hong Kong IPO

CBC Group has a 16.44% stake in the business, having participated in the first of Lu Daopei Medical’s three equity funding rounds, which closed in 2014. That round, worth CNY 108.6m (USD 15m), valued the company at CNY 258.6m, according to a prospectus. Other investors include Temasek Holdings (8.21%), Qianhai FoF (5.19%), Investcorp (2.05%), Sailing Capital (2.03%), and CD Capital (1.95%).

Lu Daopei Medical’s valuation rose to CNY 3.63bn on closing the second round of CNY 358.2m in 2018. The third round in 2020 saw investors commit CNY 150m at a valuation of CNY 4.95bn. The CNY 150m – provided by Temasek – comprised new equity only. Temasek and Investcorp also completed acquisitions of existing shares amounting to CNY 271.3m and CNY 101.5m, respectively.

Investcorp described its investment as part of the creation of a new Chinese healthcare platform that would take minority stakes in local companies by injecting new equity and acquiring existing shares. It backed telemedicine platform WeDoctor around the same time.

Lu Daopei Medical was established in 2012 by Daopei Liu and Yi Zhao, but it has undergone several reorganisations, most recently an offshore restructuring. That move necessitated the divestment of the company’s CAR-T cell drug development business due to foreign investment restrictions.

The company was the largest haematology healthcare services provider in China last year by revenue and number of registered beds, according to Frost & Sullivan. It also handled the second-largest number of haematopoietic stem cell transplantation (HSCT) cases, where stem cells are used to reestablish blood cell production in patients with damaged bone marrow or immune systems.

Lu Daopei Medical operates three haematology speciality hospitals in and around Beijing, including its flagship property, Hebei Yanda LDP Hospital. There are plans to increase capacity by opening a new hospital in Shanghai by year-end and relocating Hebei Yanda LDP Hospital to a larger location by 2025.

Around 21.9m patients were treated for haematologic diseases in China in 2022. HSCT is often a treatment-of-last-resort for blood cancers and severe non-cancerous bone marrow disorders, yet only 18,200 patients received HSCTs last year out of approximately 80,600 patients that required them.

China’s haematology healthcare services market is expected to grow from CNY 26.4bn in 2022 to CNY 80.9bn in 2030. It remains a highly fragmented market, with Lu Daopei Medical enjoying a 6.4% share. The top five players together account for 16.2%. In haematology esoteric testing services alone, the top four players had a 47.3% market share in 2022, with Lu Daopei Medical ranking third with 7.8%.

The company generated CNY 1.67bn in revenue in 2022, up from CNY 1.37bn a year earlier. Its net loss widened from CNY 408.3m to CNY 547.3m, largely due to changes in the carrying value of shares issued to third-party investors. Adjusted EBITDA rose from CNY 76m to CNY 144.7m.

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• Topics
• Greater China
• Healthcare
• IPO
• China
• CBC Group
• Investcorp
• Temasek Holdings
• sailing capital
• Qianhai FoF