PW Medtech Announces Main Board Listing(2013-10-28)
PW Medtech Announces Main Board Listing
Offer Price Set Between HK$2.60 and HK$3.38
To Raise Net Proceeds of approximately HK$1,118.5 million
[27 October 2013, Hong Kong] PW Medtech Group Limited (“PW Medtech” or the “Company” and, together with its subsidiaries, the “Group”; stock code: 1358), a leading medical device company in China, today announced the proposed listing of its shares on the Main Board of The Stock Exchange of Hong Kong Limited (“SEHK”).
PW Medtech plans to offer an aggregate of 400,000,000 shares (subject to the over-allotment option), of which 90% are international offer shares (subject to reallocations and the over-allotment option) and 10% are Hong Kong offer shares (subject to reallocations), at an offer price range between HK$2.60 per share and HK$3.38 per share. The Hong Kong public offering will open at 9:00 a.m. on 28 October 2013, Monday, and close at 12:00 noon on 31 October 2013, Thursday. Dealings in shares on the SEHK are expected to commence on 8 November 2013, Friday, with the stock code 1358 in board lots of 1,000 shares each. There is an over-allotment option to increase the offering size by 15%, an aggregate of 60,000,000 additional shares.
Morgan Stanley Asia Limited is the Sole Global Coordinator, Sole Bookrunner, Sole Lead Manager and Sole Sponsor of the Global Offering.
Leading Position in China Orthopedic Implants and Advanced Infusion Sets Market
PW Medtech is a leading medical device company in China focused on high-growth, high-margin and large market capacity segments in the medical device industry. The core business of the Group is orthopedic implants and advanced infusion sets, which are both at the forefront of the China medical market. According to the Frost & Sullivan, the Group ranks third among domestic manufacturers of orthopedic implants in China, as well as being one of the only two major domestic companies with a full orthopedic product portfolio. With regard to the infusion sets business, the Group is China’s second largest manufacturer of advanced infusion sets. The Group ranked second with a market share of 12.2%, and first in the Beijing region, in terms of sales volume in 2012.
Mr. Jiang Liwei, Chief Executive Officer of PW Medtech, said, “In recent years, China’s medical consumables market grew at a double-digit growth rate, fostered by heavy government investment in the healthcare industry and substantial development of the public medical insurance system, as well as a high prevalsence of disease resulting from an aging population. We believe PW Medtech will capture the robust market opportunities brought by the favorable business environment, with our leading market position and strong product portfolio.”
Strong Product Portfolio Well Positioned to Capture Substantial Market Growth Opportunity
According to the Frost & Sullivan, China’s orthopedic market is growing rapidly, especially in the tier II and III cities. China’s orthopedic implant market is expected to grow to RMB21.8 billion by 2017. PW Medtech processes a full product portfolio, including trauma and spine, as well as hip and knee, implants. This enables the Group to take full advantage of the huge development opportunity in the orthopedic market in China. With regards to the infusion sets segment, China is the largest infusion sets market in the world, which is in the process of gradually adopting advanced infusion sets. As one of the only three PRC manufacturers to receive CFDA approval for non-PVC-based infusion sets, the Group is well-positioned to capture opportunities in order to consolidate its market position as China’s market upgrades from PVC-based to non-PVC-based infusion sets.
Robust Product Pipeline and Strong R&D Capabilities
As a pioneer in developing innovative products, the Group has an experienced R&D team and maintains close cooperative relationships with a number of physicians, hospitals, university research centers and research institutions in China. Since 2010, the Group has commercially launched 25 orthopedic implant products, including the Group’s bridge-link combined fixation system, which provides superior fixation stability and can be used in a significantly wider range of bone fractures than many competing products currently available on the market. In addition, as a pioneer of the advanced infusion sets industry, the Group was one of the first domestic manufacturers to get CFDA approval on precision filter infusion sets to solve the issue of insoluble particles in the solutions, and one of the only three domestic manufacturers get CFDA approval for non-PVC-based infusion sets with patented double-layer tubing design. As of 21 October 2013, the Group had 28 patents, including 18 for orthopedic implant products and 10 for infusion set products, and 9 patent applications.
Extensive Nationwide Distribution Network
PW Medtech has an extensive and fast-growing nationwide distribution network. As of June 30, 2013, the Group had 244 distributors for orthopedic implant products and 211 distributors for infusion set products in 30 provinces nationwide, covering 1,444 hospitals and 1,113 hospitals, respectively, in China. Of these, the distribution network for orthopedic implants products is mainly located in the fast-growing tier II and III cities and that of infusion sets mainly covers tier I and II cities in China. The Group’s sales network is expanding consistently.
Proven Capabilities and Integration Strategy
In the past few years, the Group has successfully identified and acquired companies with high margins and high growth potential, as well as large addressable markets. Among these, both the orthopedic and infusion businesses have achieved high growth and high margins following the acquisitions, and the acquisition of joint products has further expanded the orthopedic product portfolio and created synergy with the existing product portfolio, which is anticipated to generate more momentum for the Group’s future development.
Outstanding Financial Results
The Group has delivered strong financial performance with the orthopedic implants and infusion sets businesses. Its revenue grew to RMB331.5 million in 2012, or at a CAGR of 133.5% from 2010 to 2012. Net profit grew to RMB100.2 million in 2012, representing a CAGR of 164.4% from 2010 to 2012. Total revenue increased by 50.1% from RMB145.8 million in the six months ended June 30, 2012 to RMB218.8 million in the same period in 2013, reflecting an increase in revenue from both the orthopedic implant and infusion set businesses.
Mr. Jiang Liwei concluded, “Looking forward, it is expected that the PRC Government will further improve the medical system and the medical device sector, which will enable us to benefit from these favorable market conditions. To capture this robust growth, we have formulated effective strategies which include broadening and deepening our product portfolio through research and development efforts and strategic acquisitions, increasing production capacity and improving production efficiency, expanding our distribution network and pursuing strategic acquisitions to complement growth. Leveraging on our leading market position and expansion strategy, we believe that we will bring maximum returns for our shareholders.”