Concord Medical Services plans IPO

AP News
Posted: Nov 30, 2009 4:50 PM

Concord Medical Services Holdings Ltd., which operates radiation therapy and diagnostic imaging centers in China, expects to conduct its initial public offering on Dec. 10.

Concord says it is the largest radiotherapy and diagnostic imaging provider in China. It operates 83 diagnostic centers in 36 cities across the country, and plans to open its first cancer hospital in 2010. The company's IPO will consist of 12 million American Depositary Shares, priced between $9.50 and $11.50 each.

Until Friday, Concord had expected a price of $9 to $11 per ADS.

The American Depositary Shares consist of three ordinary shares each. The underwriters of the sale are China International Capital Corp., Morgan Stanley and JPMorgan. They will have the option to buy another 1.8 million ADSs in the 30 days after the IPO.

Concord's shares will trade under the symbol "CCM."

The company expects net proceeds of $113.9 million from the IPO after deducting expenses, assuming it gets $10.50 per ADS. Concord said it will use $50 million to $80 million to expand its network of diagnostic and imaging centers. Another $20 million to $25 million will be used to develop a cancer center in Saanxi Province, expected to open early next year, with $25 million to $30 million planned for a proton beam radiation center in Beijing opening in 2012.

Concord's revenue climbed this year after the company bought China Medstar, a medical equipment leasing and management services company. The company also said patient cases increased. In a filing with the Securities and Exchange Commission, Concord reported $30.1 million in revenue in the first nine months of 2009, compared with $25.2 million in all of 2008.

It said it expects continued growth due to rising cancer rates in China, and greater use of diagnostic equipment. The company has earned $3.9 million so far in 2009, compared with a loss of $72.7 million in 2008.