Adicon Applies for Hong Kong Stock IPO

The updated prospectus shows that Adicon additionally disclosed financial data for 2021 and other content. According to the prospectus, Adicon's operating income in 2021 will be 3.380 billion CNY, the profit (net profit) for the year will be CNY 322 million, and the adjusted net profit will be 451 million CNY.

The previous prospectus showed that in 2018, 2019 and 2020, Adicon's operating income was CNY 1.530 billion, CNY 1.729 billion and CNY 2.742 billion, respectively, and the corresponding net profits were CNY 2.274 million, CNY 70.443 million and CNY 289 million.

As far as the industry is concerned, the size of the ICL market in which Adicon is located continues to expand. According to the Frost & Sullivan report, China's ICL market will increase from CNY 11.7 billion in 2016 to CNY 19.8 billion in 2020, with a CAGR of 14.0%; it is expected to reach CNY 46.3 billion in 2025, with a CAGR of was 18.4%.

In addition, compared with other developed countries, China's ICL market is still in its infancy. In 2020, the penetration rate of ICL in China is about 6%, and it is also relatively backward in terms of clinical testing expenditure per patient. In the future, the market still has broad space for further development and continued growth.

During the Track Record Period, Adicon's testing volume increased by 30.7% from 46.0 million in 2019 to 60.1 million in 2020, and further increased by 33.9% to 80.5 million in 2021. In terms of revenue structure, most of Adicon's revenue comes from medical diagnostic testing services, followed by medical product sales.

In 2019, 2020 and 2021, Adicon's revenue from medical diagnostic testing services was CNY 1.607 billion, CNY 2.513 billion and CNY 3.145 billion, accounting for 93.0%, 91.7% and 93.1% of the total revenue, respectively. During the same period, the sales revenue of medical products accounted for 7.0%, 8.3% and 6.9% respectively.

In other words, since 2020, the COVID-19 epidemic has brought more than CNY 2 billion in revenue to Adicon, becoming the main player in revenue.

Adicon said in its prospectus that as of the Latest Practicable Date, the company had conducted more than 43 million COVID-19 tests. Adicon said its success in providing COVID-19 testing underscores its ability to rapidly seize new growth opportunities as they arise.