The South China Morning Post reported in late April 2018 that China’s largest online healthcare platform Good Doctor (Ping An Insurance Group) was planning an IPO on the Hong Kong market. The company has announced that it hopes to raise a flotation of HKD 8.77 billion (€934m; US$1.12b).
If priced at the top, it could be the city’s biggest flotation by an internet-based business since ZhongAn Online Property & Casualty Insurance’s blockbuster IPO in September 2017 – the company raised HK$11.9 billion (€1.3bn; $1.5bn).
Good Doctor wants to expand internationally
Shares started trading on the main exchange on May.
“We want to use the [IPO] proceeds to expand our business, and fund future domestic and overseas acquisitions,” said Wang Tao, chairman and chief executive officer of Good Doctor.
Good Doctor’s investors will put a combined HK$4.32 billion into the float
Seven cornerstone investors will put a combined HK$4.32 billion (€460; US$550m) into the float: BlackRock (US), Capital Research and Management Company (US), the Singapore government’s investment fund GIC Private, Canada Pension Plan Investment Board, Pantai Juara Investments, which is owned by the Malaysian government’s investment fund, CT Bright Holdings, an investment unit of Thailand’s conglomerate CP Pokphand, and Swiss Re Direct Investments Company.
Citigroup and JP Morgan (US) will act as the joint sponsors.
40% of the net proceeds will be used to expand the business
According to official information, about 40% of the net proceeds will be used to expand the business, including its e-commerce business, hiring sales and medical professionals, acquiring new users and funding marketing activities.
Just under a third will be devoted to funding potential investments or acquisitions in China and abroad; a fifth will be allocated to research and development; the rest will be used for working capital and general corporate purposes.
Good Doctor: one of the most promising Chinese « unicorns »
Thanks to its in-house medical team and partnerships with hospitals and pharmacies outlets, Good Doctor offers four major online services (doctors consultations, consumer health care, healthcare management and wellness interaction) as well as an online health mall where shoppers can buy medicines and medical devices.
193 million users
The Ping An subsidiary is currently China’s largest online health care and medical platform by user numbers. At the end of 2017, 193 million users were registered on the application.
A classic growth
The company recorded a loss of 1 billion yuan (€132million euros; US$158m) in 2017, its third annual loss, but Lee Yuansiong, deputy chief executive officer for Ping An Insurance Group, said that this was normal for a tech « unicorn »* in its early phase.
« Unicorns usually have four phases: building scenarios, obtaining traffic, generating revenue, and generating profit, » Mr Lee said. « Good Doctor is still in the obtaining users and traffic phase. »
He also said that Ping An Insurance Group and Good Doctor will cooperate closely on businesses in future and that he was optimistic on the latter’s outlook.
* A « unicorn » is a privately held startup company valued at over US$1 billion (€836m).