On June 28, Ark Jianke (HK: 06086) disclosed the offering announcement, offering shares from June 28 to July 4, planning to offer 23.8 million shares globally, with another 15% over-allotment option. In this listing, the proposed issue price range of Ark Jianke is HK$7.60 to HK$8.36 per share, and it is expected to be listed on the Hong Kong Stock Exchange on July 9, 2024.
It is worth mentioning that on June 13, 2024, Ark Jianke issued the "Overall Coordinator Announcement - Retirement", saying that the company's board of directors announced that UBS AG Hong Kong Branch (i.e., "UBS") will no longer serve as the overall coordinator. As early as November 2022, when the prospectus was first submitted, Citigroup, UBS and ABCI were their joint sponsors.
Assuming an offer price of HK$7.98 per share (i.e. the median of the offer price range), the total proceeds raised by Ark Health will be approximately HK$190 million, and the net proceeds will be approximately HK$63.07 million from the Global Offering. In comparison, the company's listing expenses (including commissions, etc.) totaled about HK$116 million, accounting for 66.8%.
This means that the listing of Ark Jianke is considered a "mini" IPO, and the net fundraising of Ruqi Travel (HK: 09680) is expected to be about HK $1.1 billion, the net fundraising of Shengtong Technology (HK: 02495) is expected to be about HK $570 million, and the net fundraising of Baiwang (HK: 06657) is expected to be about HK $250 million.
According to reports, as of December 31, 2023, Ark Jianke has incurred listing expenses of RMB 64.8 million, of which 60.8 million yuan is recognized in the statement of comprehensive profit and loss and other comprehensive income, and the other 4 million yuan is recognized as deferred listing expenses in the comprehensive statement of financial position in 2023, which will be recognized as deducted from equity after listing.
After the green period of track record, Ark Health is expected to further incur additional listing expenses of approximately RMB50.9 million, of which approximately RMB28.0 million is expected to be recognized in the statement of comprehensive profit and loss and other comprehensive income. According to the relevant accounting standards, approximately $22.9 million is expected to be deducted from equity after listing.
According to Bedo Finance, the main body of Ark Jianke's IPO application is Ark Yunkang Holdings Co., Ltd. (hereinafter referred to as "Ark Jianke" or "Ark Yunkang"). According to the prospectus, the company's main member company is Guangzhou Ark Pharmaceutical Co., Ltd. (hereinafter referred to as "Ark Pharmaceutical").
In particular, Ark Pharma has an Internet hospital license. Tianyancha App information shows that Ark Pharmaceutical was established in August 2019 and is located in Guangzhou, Guangdong Province. At present, the registered capital of the company is 20 million yuan, and the legal representative is Xie Fangmin, which is wholly owned by Guangzhou Fangzhou Yunkang Information Technology Group Co., Ltd.
According to the prospectus, Ark Jianke is a chronic disease management platform, focusing on the management of chronic diseases (hypertension, cardiovascular, respiratory chronic diseases, etc.), relying on the Jianke platform to provide comprehensive medical services and online retail pharmacy services, and is committed to promoting the service to a wider range of disease fields.
Among them, the Jianke platform mainly provides users with comprehensive medical services and online retail pharmacy services. Among them, integrated medical services refer to doctors who provide patients with online follow-up consultations and electronic prescriptions through the H2H service platform. At present, the company completes prescription and drug sales through the pharmaceutical supply chain, and delivers them to your door through a third-party courier company.
It is worth mentioning that Ark Jianke continues to be in a state of loss. In 2021, 2022 and 2023, the company's revenue will be 1.759 billion yuan, 2.204 billion yuan and 2.434 billion yuan respectively, gross profit will be 220 million yuan, 381 million yuan and 487 million yuan respectively, and net profit will be -304 million yuan, -383 million yuan and -197 million yuan respectively.
Ark Health explained in the prospectus that the loss was mainly due to the large cost of sales and operating expenses incurred to promote service growth, enhance brand awareness, and lay the foundation to support future expansion. According to Hong Kong Financial Reporting Standards, the company's adjusted net profit was -207 million yuan, -89.441 million yuan and 7.165 million yuan respectively, and it will turn losses into profits in 2023.
However, when warning of risks, Ark Health also said that the company expects it to record a loss in 2024, mainly because it is expected to grant all the remaining restricted share units under the existing share award scheme in 2024, which will lead to a significant increase in administrative expenses due to the increase in share-based compensation.
In particular, the executives of Ark Jianke are very well paid. At the end of 2021, 2022 and 2023, the total remuneration of the company's four directors was as high as 5.760 million yuan, 8.677 million yuan and 12.686 million yuan respectively, and it was increasing year by year, with a total of 27.123 million yuan in three years.
Xie Fangmin and Zhou Feng, executive directors of Ark Jianke, are acting in concert, and the two jointly control 47.86% of the voting rights of the company. Among them, Xie Fangmin is also the founder, serving as the chairman of the board of directors (i.e. the chairman) and the chief executive officer; Zhou Feng, a Singaporean national, is the company's chief strategy officer.