Medical company Taimei Healthcare (02576.HK) from Jiaxing, Zhejiang, started its IPO yesterday (September 27th), planning to issue 22.4166 million H shares, with 10% of them for public offering, aiming to raise up to 0.291 billion Hong Kong dollars. It is expected to be listed on October 8th, with Morgan Stanley and China International Capital Corporation as the joint sponsors.

Zhao Lu, Chairman and General Manager of Taimei Healthcare, stated that the medical industry is still in its early development stage with intense competition. The company previously focused on expansion to gain market share. However, he mentioned that as the products mature and the business scales up, recent losses have significantly narrowed. He is confident that the company will gradually approach its profitability goal in the future, although there is no specific timeline for turning losses into profits.

In the first three months of this year, Taimei Healthcare's net loss widened by 11.5% year-on-year to 0.116 billion yuan, while revenue increased by 2.3% year-on-year to 0.13 billion yuan. The company's loss in 2023 decreased by 15.9% to 0.35 billion yuan, and revenue increased by 4.3% to 0.57 billion yuan.

Application for listing on the Sci-Tech Innovation Board (STAR Market) was rejected.

Taimei Healthcare applied to list on the Sci-Tech Innovation Board of the Shanghai Stock Exchange in December 2021 but was ultimately rejected by the Listing Committee in March 2023. Subsequently, the company turned to the Hong Kong IPO market. Zhao Lu stated that following the rejection of the A-share listing application, the company's financial data and operations improved, leading to the strategic decision to go public in Hong Kong.

Zhao Lu added that listing on the Hong Kong Stock Exchange, which targets the international market, aligns better with the company's global strategy. He believes that the company can become a global operating enterprise in the coming years. He also mentioned an interest in establishing a research and development center in Hong Kong and hopes to communicate with relevant authorities and regulators.

Taimei Healthcare: Data centers are also located in the USA and Singapore.

In addition to the Chinese market, Taimei Healthcare also operates in the USA and Singapore. Zhao Lu stated that factors such as the development of Sino-U.S. relations and geopolitical issues are beyond the company's control. However, they strictly adhere to local laws and regulations and have data centers in both the USA and Singapore.

Tencent remains a major shareholder, and there is currently no cooperation.

In addition, Tencent (00700.HK) is one of the shareholders of SoMei Medical Technology. The prospectus shows that Tencent will continue to hold approximately 10% of SoMei after its listing.

However, Zhao Lu stated that there is currently no plan to cooperate with Tencent, and whether to cooperate in the future depends on the global strategies of both parties. The company will also seek suitable opportunities to integrate and acquire similar companies in the future, but there are currently no plans for this.

Link to SoMei Medical Technology's prospectus:

https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0927/2024092700026_c.pdf