Aier Eye Hospital Completes Private Placement, Hillhouse Capital Invests RMB 1.026 Billion to Become Sixth-Largest Shareholder

VCBeat (WeChat: vcbeat) has learned that Aier Eye Hospital released the “Announcement on the Listing of Non-Publicly Issued A-Shares” on the evening of January 4, marking the successful completion of the company’s non-public share issuance.

According to the announcement, 62,328,663 new shares were added in this issuance, with an issue price of RMB 27.60 per share.The total amount of funds raised was RMB 1.72 billion, and the net proceeds amounted to RMB 1.7 billion after deducting issuance expenses., the newly issued shares will be listed on the Shenzhen Stock Exchange on January 8, 2018.

The issue price of this offering was RMB 27.60 per share, equivalent to 98.85% of the average trading price of the Company’s shares over the twenty trading days preceding the first day of the issuance period, and 109.83% of the minimum issue price of RMB 25.13 per share.

VCBeat has learned that among the non-public offering projects in China’s A-share market in 2017, a total of 74 projects were priced based on the first day of the issuance period. Aier Eye Hospital’s issue price was close to the prevailing market price, with its issuance discount rate ranking among the top three; its actual total funds raised amounted to RMB 1.72 billion, placing it within the top 15%.

Since the implementation of the new refinancing policies and the new regulations on share reductions in 2017, the lock-up period for participants in private placements has been extended, making investors increasingly cautious about subscribing to non-public offerings.

Aier Eye Hospital’s year-end issuance, amid tight liquidity conditions and with a minimum subscription amount of RMB 350 million per tranche, narrowed the book-building process to large institutional investors with substantial financial strength. The final offering price, set at a premium close to the market price, not only demonstrated Aier Eye Hospital’s strong market appeal but also reflected investor confidence in the future growth of the ophthalmology sector.

Mr. Chen Bang, the company’s actual controller and Chairman of the Board, subscribed for 12,465,733 shares, accounting for 20% of the shares issued in this private placement. Mr. Chen stated that the successful completion of this private placement has laid a solid foundation for better and faster development in the next phase, during which three major initiatives will be accomplished:

First,Construction of the Aier Headquarters Building, facilitating the establishment of a robust backend support platform and a global command center for the group;

Second,Construction of Next-Generation Information Technology and IT Cloudification Projects, will become a new engine for Aier Eye Hospital's development in improving quality and efficiency, as well as upgrading services and management;

Third,This private placement marks the first acquisition of nine hospitals from the M&A fund., forming a closed loop of “participation–incubation–acquisition,” and pioneering a new path in China’s capital market.

As the more than 130 hospitals currently under Aier’s M&A funds are gradually integrated into the listed company in the future, the company will achieve rapid external expansion, and its market penetration rate will accelerate. As ofIn the third quarter of 2017, the company's total operating revenue was RMB 1.79 billion, and the net profit attributable to shareholders of the listed company was RMB 270 million. 

Chen Bang stated that this private placement not only strengthens the company’s development capabilities but also introduces internationally renowned strategic investors at a new stage of growth, facilitating the integration of high-quality global resources and enabling rapid, leapfrog development.

The announcement shows,Hillhouse Capital Invested 1.026 Billion Yuan, subscribed to 60% of the shares in this private placement, thereby becomingAier Eye Hospital's Sixth Largest Shareholder。

Top 10 Shareholders of Aier Eye Hospital and Their Shareholding Percentages

Hillhouse Capital, which has made a significant investment in Aier Eye Hospital, is renowned for its long-term structural value investing with a global perspective. It has successively invested in a large number of outstanding domestic and international enterprises, including Baidu, Tencent, JD.com, Qunar, and Ctrip.

Zhang Lei, founder of Hillhouse Capital, stated, “I aim to be an ultra-long-term partner for enterprises; this is my conviction and belief. Therefore, I have been consistently seeking determined practitioners with a grand strategic vision.”

Wu Shijun, Board Secretary of Aier Eye Hospital, stated that Hillhouse Capital had previously become a shareholder of the company through secondary market investments and has gained an in-depth understanding of Aier, aligning closely with the company’s development philosophy. This private placement offers Hillhouse Capital a valuable opportunity to deepen its involvement in the company’s growth.