China Kanghui Holdings (KH)

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This company completed an initial public offering (IPO) of its stock in 2010. View articles that reference this company. Recent IPOs:   Globe Specialty Metals   •   LogMeIn   •   Invesco Mortgage Capital   •   Medidata   •   Chemspec

 

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Remi Cossart

China Kanghui Holdings (NYSE:KH) makes and markets orthopedic implants. Their products are divided into two main categories - bone fractures and spinal disorders. The bone fracture implants includes plates, screws, and nails, while the spinal implants includes interbody cages, meshes, and spinal screws. China Kangui sells its products to third party distributors who then sell the products to the individual hospitals. The company also sponsors conferences, trade shows, and training session as a marketing tool to increase brand awareness.^[1]

KH is focused in China and hopes to expand its sales as the rise in China's middle class increases demand. Currently, the Western Pacific (which includes China), which has 4.8 times the population of North America, but spends only 18% of what North Americans spend on healthcare.^[2] According to Frost & Sullivan, China's orthopedic market is expected to grow by a compounded annual growth rate of 18.1%.^[3]The company expects to take advantage of the rising income and medical awareness in these regions to drive sales.

The company's initial public offering of stock filed on the NYSE and went public on 11 August 2010. It was priced at $10.25, in the middle of the initial price range of $9.25-$11.25. They did raise $68M by selling 6.675M shares. The lead underwriters of the deal were Morgan Stanley (MS) and Piper Jaffray Companies (PJC) .^[4]

China Kanghui recorded a 31% increase in revenue between FY 2008 to FY 2009. Net Income also rose by 25%, or RMB 60 million in 2008 to RMB 75 million in 2009. The company plans to use the proceeds of the IPO to fund new manufacturing facilities, expand their salesforce, and invest in research and development.^[5]

References

1. ↑ KH F-1 2010 "Prospectus Summary" pg 1
2. ↑ DMED F-1/A 2010 "Worldwide Prevalence of Diabetes" pg 76
3. ↑ KH F-1 2010 "Our Industry" pg 2
4. ↑ Renaissance Capital "China Kanghui prices IPO at $10.25, midpoint of the range" 11 August 2010
5. ↑ KH F-1 2010 "SUMMARY CONSOLIDATED FINANCIAL DATA" pg 8