FAST NEWS: Mega Genomics Priced at Low End, Though IPO Oversubscribed 8.6x

The latest: Shares of genetic testing company Mega Genomics Ltd. (6667.HK) will be priced at HK$18 each – the lower end of its IPO price range – with the company hoping to raise about HK$150 million ($19.2 million), it said Tuesday. It will be listed on the main board of the Hong Kong Stock Exchange on Wednesday (June 22) morning.

Looking up: The oversubscription means investors subscribed for 200 shares per lot with a winning lot ratio of only 10.01%, requiring a minimum of 20 lots to secure a lot. Meantime, Mega Genomics’ international offering recorded an oversubscription rate of about 2.05 times.

Take Note: Though the company’s international and public offerings were both oversubscribed, the stock was ultimately decided to be priced at the low end of the IPO range, with both the company and the issue’s sole underwriter, China Securities International, leaning toward the conservative in light of recent market conditions.

Digging Deeper: Mega Genomics, backed by medical checkup center chain, Meinian OneHealth (002044.SZ), is the largest consumer genetic testing platform in China by test volume. Its main revenue comes from Meinian OneHealth and its major shareholder Yu Rong’s affiliated customers, with revenue related to both comprising 47.6% to 56.1% of its total revenue from 2019 to 2021. To expand its revenue streams, Mega Genomics is looking to shift its focus to cancer testing, and now has a number of related businesses such as colorectal cancer and gastric cancer screening. It plans to use the proceeds from the IPO to strengthen the R&D, production and sales capabilities of its cancer screening businesses.

Translation by Jony Ho

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