The Hong Kong stock internet healthcare sector was sought after by capital, but WeChat Medical Group, which had planned to list in Hong Kong in the second half of the year, temporarily kicked Credit Suisse out of its co-sponsor list because the latter had served as an underwriter for the US listing of LUCKN COFFEE DRC. Industry insiders pointed out that the change of sponsors may be due to the company's concern about inquiries from the Hong Kong Stock Exchange and the Securities and Futures Commission and the impact of the IPO, and the overall IPO process of micro medicine may be delayed for more than a month.

The Internet medical sector of Hong Kong stocks received capital inflows, with Alibaba Health Information Technology (00241) and Ping An Healthcare And Technology (01833), the main players in the sector, rebounding 38.89% and 54.46% respectively from their lows in mid-March, with the latter hitting a new high since listing. In the face of the hot market in the secondary market, the Internet medical platform Micro Medical Group, which is preparing for listing, is quite unlucky.

Micro physician changes IPO sponsor

Due to financial fraud, Credit Suisse, one of Ruixing's co-lead underwriters, will no longer act as co-sponsor of the Hong Kong listing of WeChat Medical Group, and Citigroup is likely to take its place, according to Tencent News. In addition, the co-sponsors of the listing are JPMorgan Chase & Co and China Silver International.

As for the reasons why micro-doctors change sponsors, industry insiders said: "because investors actually value the past achievements of investment banks." Now Ruixing (financial fraud) is exposed, (continue to be sponsored by Credit Suisse) is not conducive to the micro-medicine IPO. On the other hand, it may also be worried that the procedures will be blocked, the HKEx and the SFC may question the authenticity of the performance of micro-doctors, and too long an inquiry session will slow down the IPO process. "We do not rule out that there is a very small possibility that Credit Suisse thinks there is something wrong with WeChat," the person added. "

As for the current IPO process, industry insiders analyzed: "it may still be in a relatively preliminary stage, just signed the agreement (mandate), did not start due diligence, but now there are new sponsors to join, sponsors also need time to communicate, coupled with the impact of public health events, IPO may also be delayed for more than a month. "

Weidi originally planned to list in Hong Kong at the end of 2018, but the listing has been repeatedly delayed in the past two years. It was not until the end of February this year that Cai Qiang, former regional CEO of AIA Group Limited Group (01299), joined the Micro Medical Group as CFO to speed up the listing process of IPO. Cai Qiang will be responsible for promoting the capitalization of micromedicine, according to the Securities Daily on March 1.

In early March, Hong Kong media quoted foreign sources as saying that Weidi plans to go public in the second half of this year, raising up to US $1 billion (about HK $7.77 billion), with a target valuation of up to US $10 billion (HK $77.7 billion). It may become the largest IPO in Hong Kong since the outbreak of the public health incident.

According to statistics compiled by Wind, the Micro Medical Group has raised more than $1.343 billion in the past decade. After completing $500m in Pre-IPO financing in 2018, Weidi was valued at $5.5 billion, making it the largest Internet medical unicorn in China. However, it is still unknown whether the internal valuation target of 10 billion US dollars can be achieved. Compared with Alibaba Health Information Technology and Ping An Healthcare And Technology, which have been recognized by the capital market, micro-medicine has both advantages and disadvantages.

Disadvantages: the number of registered users is less than that ofPing An Healthcare And Technology

According to the micromedicine website, the group was founded in 2010 and has business segments such as micro-medicine, micro-medicine, micro-health insurance and so on. In February this year, the free online consultation channel jointly set up by China CITIC Bank Corporation Hangzhou Branch and Micro Medical Group was officially launched. Data released at that time showed that micro doctors had a total of 210 million registered users, connected to more than 3200 hospitals, 310000 doctors, and served a total of 990 million patients.

According to Ping An Healthcare And Technology's 2019 annual report, as of December 31, 2019, the total number of registered users reached 315 million, an increase of 50 million over the end of 2018. Alibaba Health Information Technology did not release this figure.

Advantage: profitable

According to vcbeat, micromedicine chairman and CEO Liao Jieyuan said when attending the 2016 China Family Health Forum that the revenue of micromedicine exceeded 1.2 billion yuan in 2016, and the three main industries of medicine, insurance and medicine made an all-round profit, accounting for 45%, 35% and 20% of the income, respectively. The profit mainly comes from insurance. Micromedicine is the only one of the current Internet medical head companies that publicly claims to be fully profitable. However, as the micro doctor is not listed on the market, the statistical caliber of each company may be different, and the specific profit situation will not be known until the company publishes the prospectus.