Adicon Holdings (09860) Launches IPO with Five Cornerstone Investors

Intelligent Finance APP reported that Adicon Holdings (09860) offered shares for subscription from June 19 to June 23, 2023. The company planned to issue 33,192,500 shares, of which 10% were allocated for the Hong Kong offering and 90% for the international offering, with an over-allotment option of 15%. The offering price was HK$12.32 per share, and each lot contained 500 shares. The shares are expected to be listed on June 30, 2023.

According to Frost & Sullivan, by total revenue during the performance record period, the company is one of the top three independent medical laboratory (or ICL) service providers in China. During the performance record period, the company experienced rapid business growth, with total revenue increasing from RMB 2.742 billion in 2020 to RMB 4.861 billion in 2022, representing a compound annual growth rate of 33.1%. The company primarily provides hospitals and health examination centers with a wide range of first-class testing services through an integrated network of 33 self-operated laboratories across China. The company’s high-quality services are based on its outstanding performance measured by internationally recognized standards and comprehensive testing scope. As of December 31, 2022, 18 of the company's laboratories had obtained ISO15189 accreditation, ensuring that the company provides clients with quality assurance that adheres to this strict international standard. As of December 31, 2022, the company's test portfolio included more than 4,000 medical diagnostic tests, including over 1,700 routine tests and more than 2,300 specialized tests. During the performance record period, the company's testing volume increased by 33.9% from 60.1 million in 2020 to 80.5 million in 2021, and further increased by 104.8% to 165 million in 2022. As a leading ICL service provider in China, the company is committed to providing high-quality testing services to patients and the general public, becoming a trusted and reliable partner for healthcare professionals and society at large.

The Company has entered into cornerstone investment agreements with cornerstone investors MR Global (HK) Limited, New Industries Hong Kong, Fosun Diagnostics, Timestar Elite, and CoreLink. These cornerstone investors have agreed to subscribe, or procure their designated entities to subscribe, for the number of offer shares that can be purchased for a total amount of approximately US$37.17 million at the offer price.

Assuming the over-allotment option is not exercised and based on the offer price of HK$12.32 per share, the company will receive net proceeds of approximately HK$83.9 million from the global offering. Of this, 15% will be used to enhance the company’s routine and specialized testing capabilities, including R&D as well as sales and marketing capabilities; 25% will be allocated for network expansion through the construction of new laboratories, partnership investments, and the development of new channels; 25% will be dedicated to forming strategic collaborations with industry participants and pursuing strategic and add-on acquisition opportunities for business development. Additionally, 15% will be utilized to upgrade and expand the company’s existing laboratories; 10% will be invested in operational infrastructure, including logistics facilities, artificial intelligence technology, and IT infrastructure; and 10% will be reserved for working capital and general corporate purposes.