Kangji Medical Rallies 99% in Hong Kong Debut

The surgical instrument maker boasted the best debut performance for a healthcare stock in Hong Kong this year.

Author: Anthony Russo   

Shares of Kangji Medical Holdings Ltd. (HKEX: 09997) skyrocketed nearly 99% at the close of trading Monday in its Hong Kong debut.

The Chinese surgical instrument maker priced its IPO at the top end of its range at HK$13.88 per share, raising $381 million. Today's jump marked the best debut performance for a healthcare stock in Hong Kong this year, according to data compiled by Bloomberg. Hangzhou-based Kangji watched its stock trade as high as HK$27.80 per share before closing at $HK27.60 per share.

Earlier this month in Hong Kong, Kangi medical's IPO was oversubscribed by 900 times, diluting investor Lyfe Capital's shareholder equity from 17.4% to 6.1%. James Zhao, the founding partner at the life science investment firm, said that Hong Kong is becoming an attractive destination for health care and life science start-ups; the exchange could eventually rival Nasdaq, as cited by the South China Morning Post.

"We have seen over the past two years how the Hong Kong stock exchange has made a lot of effort, paving the way for companies in the Chinese health care sector to list in Hong Kong," Zhao said.

He added that 10 startup firms backed by Shanghai-headquartered Lyfe Capital have listed their shares in either Hong Kong, the U.S., or China. However, as stock exchanges of Hong Kong and Shanghai have made reforms more attractive for start-up companies, Zhao noted more managers in his portfolio are considering IPOs in those cities as opposed to the U.S.

Founded in 2004, Kangji sells products to "top tier" hospitals in China and exports to more than 20 countries globally. Its main product portfolio includes trocars and forceps.

In 2019, Kangji's sales rose to 503 million yuan versus 354 million yuan from the prior year. It posted a net profit of 206 million yuan compared with 147 million yuan in 2018.

Kangji will look to continue its momentum after today's warm welcome from investors.