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    PingAn Good Doctor completed $400M USD pre-IPO financing, and filed for IPO in Hong Kong

    IPO Prospectus says Ping An Healthcare has a mission to build the ‘largest health care ecosystem in the world and promote healthy living empowered by technology’.

    Ping An Healthcare and Technology, China’s largest health care and online medical platform, has been accepted by the Hong Kong stock exchange for an initial public offering (IPO), despite making hefty losses for the past two years.

    The company’s revenue soared 240.4 per cent from a year earlier, to 1.02 billion yuan (US$129.5 billion) in the nine months ended 2017.

    But it still lost 497.4 million yuan for the nine months ended 2017, after a net loss of 614.2 million yuan in the first nine months of 2016, according to the application proof prospectus published on the Hong Kong Exchanges and Clearing’s website.

    Shenzhen-based financial conglomerate Ping An Insurance (Group) will spin off the health care portal, known as the “Good Doctor”.

    “We are [still] in the early stages of development with a limited operating history in an emerging and dynamic industry, and our historical results and financial performance are not indicative of future performance,” Ping An Healthcare said in the application.

    It said one of the main risk factors included the possibility of being unable to recoup the investments it has made.

    It added there may well be a need to constantly upgrade infrastructure to provide increased scale and keep pace with its business development targets. But there was a chance the capital expenditure will not be recovered in part or in full.

    Additionally some uncertainties remain under PRC law as to the IPO, as some past cooperations with offline medical institutions have been be deemed as providing diagnostics and treatment practices without licenses, thus creating legal risk, the company said.

    The potential IPO has already attracted major shareholders including Softbank Vision Fund, the world’s largest private equity fund (7.41 per cent), and Vision Fund Singapore SPV (7.41 per cent), although no pricing details or time schedules have been set.

    The joint sponsors are Citigroup Global Markets Asia and JP Morgan Securities (Far East).

    Proceeds will be used for business expansion, potential acquisitions and development of AI Assistant and other technologies, the application said.

    Launched in April 2015, Ping An Healthcare offers online medical services and has 192.8 million registered users, with network coverage including 3,100 hospitals and 7,500 pharmacy outlets.

    It was China’s largest internet health care platform in terms of average monthly active users and daily average online consultations in 2016.

    US consulting firm Frost & Sullivan predicts China’s internet health care market to grow to 197.8 billion yuan by 2026 from 10.9 billion in 2016, and online consultations to increase to 148.4 million in 2016 from 29.8 million in 2012.

    Hong Kong’s stock exchange is expected to push ahead with IPO reforms to allow weighted voting rights for technology firms from June in a bid to attract more new economy companies to list and keep its status as a global financial services leader.

    The controversial dual-class shares are favoured by founders and certain shareholders to retain more voting rights than other shareholders while critics have argued such a structure may lead to potential abuse by corporate insiders.

    Currently Ping An Healthcare’s issued share capital is split into A-shares (77.2 per cent) and class B-shares (22.8 per cent). But it will have only one class of ordinary shares upon completion of the share redesignation, the application said.

    In September, ZhongAn Online Property & Casualty, China’s first internet-only insurer, raised US$1.5 billion in a Hong Kong IPO, and given a valuation of US$13 billion.

    Analysts had said the city’s first major fintech flotation suggested other technology-related firms were also able to list in Hong Kong successfully with one class of shares.