China's Neusoft Medical mulls US$400m Hong Kong IPO

[HONG KONG] Neusoft Medical Systems Co is considering an initial public offering in Hong Kong after retracting its listing application to Shanghai's Nasdaq-style STAR board last year, people with knowledge of the matter said.

The medical devices arm of software company Neusoft Corp is working with advisers on a potential share sale that could raise US$400 million to US$500 million, said the people, who asked not to be identified as the information isn't public. The IPO could take place as soon as late this year, the people said.

Deliberations are at an early stage, and details such as size and timing may change, the people said. A representative for Neusoft Medical did not immediately respond to requests for comment.

Neusoft Medical's application to the Shanghai Stock Exchange's Science and Technology Innovation Board was accepted at the end of June, the bourse's website showed. The Shenyang-based firm subsequently scrapped its application in late November, according to a statement, without providing an explanation.

The withdrawal of its STAR board application comes amid increased scrutiny on potential debuts. After months of signalling, the China Securities Regulatory Commission in April tightened rules in order to screen STAR board hopefuls based on criteria such as research and development, patents and revenue growth rate.

Neusoft Medical's products include X-ray and computed tomography systems as well as magnetic resonance imaging system scanners, and are used in more than 110 countries, according to its website. Its devices have been installed more than 40,000 times since its inception in 1998.

Early backers including Hony Capital, Goldman Sachs Group Inc and Canada Pension Plan Investment Board invested 1.6 billion yuan (S$330 million) in Neusoft Medical in 2014, according to a statement.

BLOOMBERG