Hong Kong: Good Doctor raises HK$7.9bn in placement

Ping An Good Doctor (PAGD), China’s biggest online health care platform, has raised HK7.9bn (US$1bn) in a primary share placement in Hong Kong.

It sold 80 million shares at HK$98.20 per share, or 7% of the enlarged share capital.

The price was an 8.9% discount to the five-day VWAP.

In a statement to the HKEx, Good Doctor said that net proceeds would be used to “develop core businesses of the group, including… further expansion of in-house medical teams, further investment in technology research and development, diversification of membership products categories, broadening of sales channels and network, and potential strategic investments, which will further enhance the competitiveness of the group.”

It went on to explain that the Covid-19 pandemic had boosted telehealth and that the sector was now entering a “new phase of rapid growth”.

There is a 90-day lockup period for the shares.

Shares in Good Doctor are up 117% so far this year according to Blomberg.

The deal comes six weeks after Alibaba Health Information Technology raised HK$10bn in an upsized placement on the HKEX that was Hong Kong’s largest follow-on share sale for five years. It also comes ahead of the much-anticipated IPOs for JD Health and for WeDoctor.

“PAGD is a thematically favourable stock which has benefited from Covid-19. But the implication of Covid-19 has also helped accelerate favourable policies to digitalise healthcare in China which will help PAGD beyond the short-term,” noted Toh Zhen Zhou of Aequitas Research who publishes on Smartkarma.

The deal was managed by UBS, Morgan Stanley and Ping An Securities.