(CapitalWatch, Sept. 29, New York) Jin Medical International Ltd. has applied for a small initial public offering on the Nasdaq Capital Market, seeking to raise up to $33 million.
Changzhou, China-based Jin Medical makes manual wheelchairs for people with disabilities, the elderly, and people recovering from injury. A small percentage of sales come from living aids products such as oxygen concentrators and bathing machines, now sold to a few customers in test mode. In 2018, Jin Medical began to sell electric wheelchairs, which comprise 1% of its revenue, according to the prospectus. Its website also lists sports wheelchairs.
Jin Medical cites the growing aging population as a growth driver for its business. The company sells mostly to China and Japan, and also ships overseas to Australia, North America, Korea, and others. In Japan, it sells to one of the country's largest medical device distributors, Nissin Medical Industries Co., Ltd.
For the fiscal year 2020, Jin Medical booked $16.2 million in revenue and $2.2 million in income, compared with $20.4 million revenue and $3.6 million income in 2019, with the decrease attributed to the impact of Covid-19. For the six months through March, the company reported $9.3 million in revenue, a 31% increase year-over-year, on income of $1.8 million.
Jin Medical operates through a variable interest entity (VIE), Changzhou Zhongjin Medical Equipment Co. Ltd., to receive foreign investment. Should China disallow VIE structure or impose new rules, as its overseas listing rules are under review, that could pose risks to the stock. Over the past few months, Beijing imposed new measures for companies seeking overseas listings, including filing a cybersecurity review; Jin Medical said in its filing that the new laws had no impact on its business.
The company plans to use IPO capital for R&D, promotion and marketing, to improve its online platform and boost production, as well as for acquisitions of upstream and downstream companies manufacturing wheelchairs and parts.
Securing the offering in New York is Prime Number Capital, LLC. The underwriter will have a greenshoe option to acquire an additional 15% of the shares upon the IPO.