China IPO on deck: China Medical Technologies (CMED)
China Medical Technologies (proposed ticker: CMED) is expected to go public on Nasdaq tomorrow. Here is a look at the medical device company and analysis of its latest financial results:
Description
- Based in Beijing, China.
- Medical device company that develops, manufactures and markets products using high intensity focused ultrasound, or HIFU, for the treatment of solid cancers and benign tumors in China.
- 177 employees as of June 30, 2005.
- Web site: See here.
Competition
- Competitors for its HIFU therapy system include Chongqing Haifu Technology, and Shanghai A&S Science Technology Development.
- ECLIA system competes with IVD systems and reagents offered in the China market by international companies, including Abbott Diagnostics, Bayer AG, Beckman Coulter, Diagnostic Products Corporation, or DPC, EG&G Wallac, Johnson & Johnson and Roche Group.
Institutional Ownership (% of ordinary shares owned prior to offering)
- Chengxuan International (investment firm owned by CEO Wu): 54.9%.
- Golden Meditech (BVI) Company: 24.95%.
- General Electric International Operations -- subsidiary of General Electric (ticker: GE): 19.95%.
Market Statistics
- According to market research firm Frost & Sullivan, the
China market for medical devices and equipment is expected to grow from
$5.9 billion in 2002 to $10.1 billion in 2006, at a compound annual
growth rate of approximately 14%.
IPO Details
- Ticker: CMED
- Maximum aggregate offering: $92.0 million.
- Offering 5 million ADSs representing 50 million ordinary shares.
- Offering price: $14 - $16 per ADS.
- Ordinary shares after the offering: 250,000,001.
- Net proceeds to the company: $66 million (assuming $15 per ADS).
- Use of proceeds: $12.0 million for remaining payments relating to acquisition; $8.0 million for R&D; $8.0 million for production equipment; and $5.0 million for sales and marketing.
- Lead underwriter: UBS Investment Bank.
- Lock-up: Existing shareholders have 180-day lockup-up period. Asset Managers and Neon Liberty subject to 270-day lock-up period.
Preliminary Q1 Results (three months ended June 30, 2005)
(all percentage changes and comparisons are year on year, unless stated otherwise)
- Net revenue rose 132.1% to $7.4 million.
- Revenue from ECLIA system rose from $0 to $3.0 million.
- Revenue from HIFU therapy system rose 38.9% to $4.4 million.
- Net income rose 145.5% to $3.6 million.
FY 2005 Results (year ended March 31, 2005)
(all percentage changes and comparisons are year on year, unless stated otherwise)
- Revenue rose 96.4% to $26.3 million.
- Gross margin was 70.3% vs 69.3%.
- Operating expenses rose 137.4% to $3.0 million.
- Research and development expenses rose 38.3% to $340,000.
- Sales and marketing expenses rose 88.4% to $599,000.
- General and administrative expenses rose 196.2% to $2.0 million.
- Operating income rose 93.4% to $15.5 million.
- Operating margin was 59.1% vs 60.0%.
- Net income rose 92.4% to $14.3 million.
- Diluted EPS of $0.07 vs $0.04.
- Diluted earnings per ADS of $0.70.
Balance Sheet
- As of March 31, 2005, cash and equivalents of $1.77 million.
Comment: You can access the latest amended F-1 here.
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