SINGAPORE – A medical services provider with three clinics here aims to raise net proceeds of $3.3 million in an initial public offering (IPO) launched on Wednesday.
Niks Professional is offering 21.8 million new shares – 20.8 million placement shares and one million for public offer – at 23 cents apiece.
The dermatology and aesthetic medical services firm was set up 25 years ago and is led by chairman and chief executive Cheng Shoong Tat and his wife, Dr Ong Fung Chin, who is president and chief medical officer.
It provides laser and intense pulsed light procedures and treatment for various skin conditions such as acne at its clinics in Tampines, Orchard and Jurong East. It also operates three retail shops and an online store offering Niks skincare products.
It sells skincare products to hospitals, clinics, pharmacies, shops, doctors and consumers in China, mainly through 11 regional agents, and has a wholly-owned subsidiary, Niks Professional (Shanghai).
Niks Professional recorded net profit of $2.8 million in the 2022 financial year, down from $3.3 million a year earlier.
While the group does not have a fixed dividend policy, it said on Wednesday that its directors intend to recommend dividends of at least 50 per cent of net profit for the 2023 financial year, and at least 40 per cent in 2024.
Based on the issue price of 23 cents a share and Niks Professional’s post-offering share capital of 130 million shares, the company will have a market capitalisation of $29.9 million at listing if all stock is subscribed.
The stock is expected to start trading on the Catalist board of the Singapore Exchange on Oct 27, after applications for shares close at noon on Oct 25.
The company, which employs about 50 people, said it intends to use the IPO proceeds to grow the business, mainly through acquisitions, joint ventures and strategic alliances.
It also plans to open new clinics and retail outlets, hire healthcare and management staff, buy equipment and expand its medical skincare products distribution business in China.
Mr Cheng said that besides engaging more regional agents in China, the company wants to grow its direct sales to doctors and end-consumers there, “which we believe will fetch better margins compared to regional agents”.
The firm said its skincare product retail and distribution model in Singapore and China is scalable, and complements its medical services.
Dr Ong added: “Different dermatological issues may also occur across the lifetime of some customers, and this presents as recurring revenue for our group.”
The company’s final offer document noted that Singapore’s private dermatology and aesthetic medicine industry is expected to have a compound annual growth rate of 9 per cent from 2019 to 2025, to reach a value of $756 million.
Meanwhile, China’s skincare products industry is expected to have a compound annual growth rate of 7.5 per cent from 2023 to 2027. It was worth an estimated US$40 billion (S$54.8 billion) in 2022.
However, Niks Professional acknowledged that it faces risks such as negative publicity or media reports relating to its products, services, doctors or the general skincare industry.
Supply chain disruptions may also impact its ability to deliver its products, as most are manufactured overseas before being shipped to Singapore and then on to China.
