Warburg-backed Chinese Oncology Healthcare Firm Hygeia Raises $286m In HK IPO

Hygeia Healthcare, a Chinese oncology healthcare group backed by US private equity major Warburg Pincus, raised HK$2.22 billion ($286 million) in an initial public offering (IPO) on the Main Board of the Hong Kong Stock Exchange (HKEX) on Monday.

Shanghai-based Hygeia sold 120 million shares at a price of HK$18.5 ($2.39) each, or the higher end of its price range of HK$17-18.5. Both the Hong Kong and international portions of the offering were heavily subscribed.

The company, which was started in 2009, had more than 940,000 patient visits in 2019 among its network of hospitals, a 24 per cent increase compared to one year earlier, shows its prospectus.

The offering was one of the most sought-after IPOs in Hong Kong this year as the public tranche of the deal attracted over 300,000 applications with over 600 times oversubscription, according to London-based law firm Clifford Chance, the legal adviser for the IPO.

Hygeia’s shares reached HK$27.7 ($3.57) at the highest price recorded throughout the debut day of June 29, about 40.54 per cent higher than the offer price. The company’s market capitalisation stood at HK$15.6 billion ($2.01 billion).

Before the offering, Hygeia obtained capital commitments from nine cornerstone investors, including Hillhouse Capital, China Southern Asset Management, Tiger Pacific Capital, OrbiMed Capital, and Lake Bleu Capital, for $143 million, or about half the size of the IPO.

Warburg Pincus, which held a 17.24 per cent stake in Hygeia, has made a partial exit and holds a 13.79 per cent stake in the firm after the IPO.

“Looking forward, we will expand our network of oncology-focused hospitals and radiotherapy centres to broaden our business scale and enlarge market share,” said Fang Min, chairman of the board and non-executive director of Hygeia, in a company statement released on the listing day.

He said that the company will also upgrade its existing in-network hospitals to improve service capacity and widen service offering, as well as improve the quality of healthcare services and further enhance brand awareness, among others.