Futu News, February 5, this Friday.$Nuohui Health-B (06606.HK) $The company plans to issue 76.598 million shares from February 5 to February 10, including a public offering of 7.66 million shares and an international offering of 68.938 million shares at a price of HK $22.7-26.66 per share, which is expected to be listed on February 18.

It is reported that Nuohui Health, established in November 2015, is a forerunner in China's colorectal cancer screening market, aiming to promote technological innovation and accelerate the adoption of cancer screening technology in China.

According to Frost Sullivan, the company's proprietary non-invasive multi-target FIT-DNA test-Chang Weiqing is China's first and only molecular cancer screening test approved by the State Drug Administration. The company focuses on designing, developing and commercializing cancer screening tests, and its two major home colorectal cancer screening products, Chang Weiqing and Pupu tube, work together to deal with different risk groups.

In terms of financial position, in the fiscal year 2018-2019, the company recorded total revenue of HK $18.816 million and HK $58.275 million respectively, an increase of 209.7% over the same period last year, with net losses of HK $224.9 million and HK $106.5 million respectively. In 2019 and 2020, the total income was HK $35.44 million and HK $35.309 million, respectively, while the net losses for the same period were HK $62.508 million and HK $530 million respectively.

In terms of industry, China has the highest incidence of colorectal cancer in the world, with 388000 confirmed cases in 2015 rising to 440000 in 2019, representing a compound annual growth rate of 3.2 per cent. According to Frost Sullivan, the cost of colorectal cancer treatment places a heavy economic burden on China's health care system, with overall per capita expenditure among the most common types of cancer in China's urban areas.

Because of the high number of cases, high deaths, long tumor development cycle and heavy burden of treatment, colorectal cancer is one of the few types of cancer recommended for regular screening in people with no signs or symptoms of cancer.

It is reported that China's colorectal cancer screening market increased from 25 million yuan in 2015 to 3000 million yuan in 2019, with a compound annual growth rate of 4.8 percent, and is expected to further increase to 19800 million yuan in 2030, with a compound annual growth rate of 18.7 percent.

As for cornerstone investors, a number of cornerstone investors agreed to subscribe for the number of offering shares available for subscription at the offering price, with a total amount of about US $124 million, including: Invesco Advisers, Inc, Lake Bleu Prime Healthcare Master Fund Limited, clear Pool Capital, GIC, Southern Fund, etc.

In terms of fund-raising purposes, the company intends to use the global sale funds for the following purposes: about 40.0% will be used to fund the commercialization and further development of Chang Weiqing (as a medical service or independent product); about 5.0% will fund the continuous sales and marketing of Pupu tube by raising awareness of colorectal cancer screening and market penetration, and conduct more clinical evaluation of puff tube in different populations. About 30.0% will be used to fund ongoing and planned research and development to further develop the company's pylorus, Gongzheng Qing and other pipeline products in the company's early stages; about 15.0% will be used for the continued expansion and diversification of the company's product portfolio through potential acquisitions or external introduction of candidates in the field of cancer screening; and about 10.0% will be used for the company's working capital and other general corporate purposes.