Health service seeks IPO on Nasdaq

China's healthcare services provider iKang Guobin Healthcare Group is aiming to raise up to $150 million in an initial public offering on the Nasdaq stock market - the latest Chinese company to attempt a listing in the US market.

The Beijing-based company reported revenue of $134 million in the 2012 fiscal year that ended in March 2013, 43 percent up year-on-year.

Its net profit rose by 25 percent year-on-year to $12 million, according to financial reports.

The company, in which Goldman Sachs Group Inc and Government of Singapore Investment Corp both have stakes, has 40 health examination and medical treatment centers in 12 cities in China.

It cooperates with 500 medical institutions in more than 200 Chinese cities.

Analysts said iKang Guobin is highly likely to be the first Chinese medical examination provider to be listed on the US market.

No price range has been disclosed at this stage. Bank of America Merrill Lynch and UBS AG will act as book runners for the deal.

As Chinese society ages and becomes more concerned about pollution, people's spending on healthcare is surging. McKinsey and Co Ltd estimated last year that China's healthcare spending will swell to $1 trillion in 2020 from $357 billion in 2011.

Private medical care has been a sector with fast development, luring great investment interest in recent years. Private hospitals, healthcare services and medical devices are popular with investors and are receiving key support from the government.

"In the past the Chinese mainly focused on disease treatment. Now more people have realized the importance of health examinations to detect potential risks early on - and that helps the transition to a human-centered consecutive and modernized medical system," said Wu Liuxin, deputy of the Healthcare Institution under the Chinese Medical Association.

China's current Five-Year Plan (2011-2015) singles out the private healthcare sector for increased foreign investment and help from the government.

However, analysts point out it depends on specific company financial performances and business strategies to evaluate growth potential, noting the fierce competition in the health examination industry may lead to further integration.

Ciming Health Checkup Management Group Co Ltd, iKang's rival, announced it was postponing its IPO plan to list on China's A-share market in January. The company said in a recent filing that net profit in 2013 will rise or decline within a band of 10 percent from that in 2012, while the first quarter in 2014 is expected to see a loss, which is a big contrast to its performance before 2012.

Frustrated by the intricate IPO process of China's A-share market listing and lured by the thriving US stock market, many Chinese companies are again looking to list on the latter, after accounting scandals weighed heavily on the valuations of many Chinese companies a few years ago.