Dental device maker has four key products

Angelalign Technology has attracted at least HK$228 billion through margin financing for the retail tranche of its initial public offering, marking a 783 times oversubscription as of yesterday.

The share sale comes in with a minimum investment of HK$34,949, the highest for an IPO ever in Hong Kong.

In China, Angelalign, controlled by CareCapital, took up nearly 41 percent of the clear aligner treatment solution market share in terms of case shipments in 2020, according to a commissioned report by CIC.It is 0.4 percentage points less than the US-listed Invisalign which has the largest market share.

China's overall clear aligner market, measured by retail sales revenue, is expected to grow from US$1.5 billion (HK$11.64 billion) in 2020 to US$11.9 billion in 2030, suggesting a compound annual growth rate of 23.1 percent, the report says.

Founded in 2003, Angelalign provides dental professionals with digitally-assisted case assessment support and treatment planning services and a cloud-based service platform. After dental scanning and initiating treatment, the stomatology team will help the professionals design, review and modify treatment plans through iOrtho, its cloud-based service platform.

The number of dental professionals it served increased from around 11,500 in 2018 to roughly 15,800 in 2019. This increased to 19,900 in 2020, according to the prospectus.

It warns that the business may be affected if it fails to further promote brand recognition and acceptance of its system among dental professionals, or fail to grow the number of those who use its solutions.

The company also offers tailor-made clear aligners with 3D printing. The sales of clear aligners accounted for 97.9 percent of the total revenue in 2020 as Angelalign does not charge customers for the use of iOrtho. The rest of the income was from other services, including orthodontics and cosmetic dentistry services and other dental services through dental clinics.

Its manufacturing facilities are located in the Wuxi (Huishan) Life Science and Technology Industrial Park in Jiangsu Province, China, with an aggregate area of about 9,000 square meters and a production capacity of 21.90 million units in 2020.

However, the use rate dropped to 74 percent in 2020 from 99.6 percent in 2018, due to under-use of new automated production lines during trials and the impact of the pandemic.

There are four lines of clear aligners for sale, namely Angelalign, Angelalign Pro, Angelalign Kid and COMFOS, with an average wholesale price of 7,700 yuan (HK$9,373.51) in 2020. The priciest, Angelalign Pro is 9,600 yuan each, compared with the budget priced COMFOS at 5,500 yuan. Suggested retail prices of these two products were 40,000 yuan and 24,000 yuan.

Most aligners, or 60.61 percent, were sold directly to public hospitals and private clinics, while the remainder was sold through distributors last year.

The Shanghai-based company grew net profit by 15.72 percent year-on-year to 69.23 million yuan in 2019. Profit then jumped by 116.21 percent to 149.68 million yuan in 2020.

Revenue grew by 32.23 percent to 645.90 million yuan in 2019 and further increased by 26.42 percent to 816.53 million yuan in 2020, thanks to increases in the number of dental professionals it served with the Angelalign clear aligner system and case shipments.

It plans to use the net proceeds to build new manufacturing facilities and a research and development center in Wuxi city, enchance research and development, and for the development of an intelligent information technology system.

Funds raised will also be used to support the sales team, marketing and branding, optimize medical services, and for working capital, and other general corporate purposes.