BGI Groups Gene-sequencing Equipment Unit Moves Towards A-share IPO

MGI Tech, an affiliate of China’s biggest DNA-sequencing giant BGI Group, has moved towards an initial public offering (IPO) on China’s A-share market, about three months after the company raised over $1 billion.

The supplier of gene-sequencing equipment signed a pre-listing tutoring agreement with investment bank CITIC Securities, according to an update on the website of China Securities Regulatory Commission (CSRC), the country’s securities regulator, on Tuesday.

A-shares represent listed Chinese companies that trade on mainland bourses including the Shenzhen and Shanghai Stock Exchanges. A-shares are yuan-denominated, unlike B-shares that are traded in foreign currencies.

The size, timing, and location of the IPO are yet to be disclosed. Bloomberg had reported in August, citing sources, that the BGI Group could seek to raise about $1 billion by selling shares in MGI Tech on Shanghai’s Nasdaq-style STAR Market this year.

Founded in 2016, MGI focuses on the R&D, production, and sales of gene-sequencing instruments, reagents, and related products to support life science research, agriculture, precision medicine, and healthcare services. It has over 1,000 employees across 39 countries and regions, according to its website.

The company, also a major provider of COVID-19 testing equipment, raked in over $1 billion in a Series B round of financing led by CPE and Beijing-based investment firm IDG Capital this May. Its investors also include China Renaissance’s New Economy Fund and Chinese PE Co-Stone Asset Management, among others.

In May 2019, MGI closed more than $200 million in its first round of financing. The previous round was backed by CITIC Goldstone Capital, Green Pine Capital Partners, and Orient Securities Capital Investment, a wholly-owned subsidiary of Hong Kong-listed Orient Securities.

BGI Genomics, an independent division of BGI Group, had raised 547 million yuan ($80 million) in an IPO on the ChiNext exchange in July 2017 by selling 40.1 million shares at a price of 13.64 yuan ($1.99) apiece. BGI Genomics mainly offers genome sequencing services and proteomic services.