PE-backed Wenzhou Kangning Hospital targets $88m in HK IPO

Kangning Hospital is offering 17.6 million shares at up to HK$38.70 apiece, according to a prospectus. The final offer price will be announced on November 13 and the stock is scheduled to commence trading on November 20.

The hospital operator has secured commitments worth HK$248 million from two cornerstone investors, including healthcare-focused investment firm OrbiMed Advisors and hedge fund Prime Capital Management. Their commitments represent 36.4% of the retail target.

Founded in 1996, Kangning Hospital mainly focuses on psychiatric medical treatment. As of the end of June, the group ran five directly-owned hospitals and managed four psychiatric centers for other medical institutions, providing 2,210 beds in total.

In 2013, it received RMB140.5 million ($23 million) from Guangzhou GL Capital, known as Defu Fund, and RMB59.5 million from CDH Investments. In March, GL Capital committed a further RMB55.1 million, while CDH provided RMB23.3 million. GL Capital and CDH currently hold stakes of 29.14% and 12.35%, respectively.

The company's revenue grew from RMB226.4 million in 2013 to RMB296.3 million last year, while net profit increased 40% year-on-year to RMB51.2 million in 2014.

According to a Frost & Sullivan report cited by Kangning Hospital, China's private psychiatric healthcare market grew from RMB2.2 billion in 2010 to RMB5.1 billion last year. It's estimated to reach RMB6.2 billion in 2015 and RMB13.6 billion in 2019.

Citi and CITIC CLSA Securities are joint sponsors and bookrunners for the offering.

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• Topics
• Greater China
• Healthcare
• Exits
• China
• healthcare
• Exit
• IPO
• CDH Investments Management
• Hong Kong (China)