What’s new: Chinese speech-recognition and artificial intelligence developer Iflytek Co. Ltd. (002230.SZ) plans to spin off its loss-making health care arm via a Hong Kong IPO.
Xunfei Healthcare Technology Co. Ltd. will seek approval to list on the main board of Hong Kong’s stock exchange, with an offer of up to 20.1 million shares and a 15% over-allotment option, Iflytek said in a regulatory filing Tuesday.
It did not disclose the schedule or pricing details of the IPO.
Iflytek will retain control of Xunfei Healthcare following the spin-off, the filing said. The parent held a 52.47% stake in the unit as of early January.
The background: Established in 2016 in Hefei, Anhui province, Xunfei Healthcare produces medical devices and develops AI-powered software for diagnosis. Iflytek first revealed its intention to spin off the health care arm in August 2021.
Iflytek had ambitious plans for its health care business, with founder and chairman Liu Qingfeng once setting a revenue target of 20 billion yuan ($2.8 billion) for the unit by the end of 2025.
But that goal is still a ways off. At the end of 2022, revenue increased 38.8% year-on-year to 494 million yuan, while net losses widened from 79.7 million yuan to 204 million yuan in the same period, according to the filing.
Contact reporter Kelsey Cheng (kelseycheng@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)
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