Eagle Health Holdings Ltd

Take5 with OnMarket: Director, Rodney Hannington answers 5 questions about Eagle Health Holdings and the IPO (4:37mins) followed by independent research analysis by Wise-owl (5:04mins)

Fixed Priced IPOType of Offer
26 Apr 17Offer Open
13 Jun 17Pay By
$0.40Price
$25-30 millionSize of Offer
$2,000Minimum Bid
Beer & CoLead Manager
109
3260

Overview

UPDATE: Tuesday 6th June - Eagle Health Holdings Limited (ASX: EHH) has announced that it has received a cornerstone investment commitment for $10 million from major South Africa Nutritions group, Amka Holdings (Amka), taking the total binding commitments to over $20 million.

Eagle Health is a vertically integrated nutritional products business that aims to help people live healthier lives by developing, manufacturing, marketing and distributing health food products and nutritional and dietary supplements in China. The Eagle Group has an extensive network of 258 distributors, including pharmacies, health food stores, trading companies, supermarkets and online channels. This network enables the company to cost effectively market its products across China benefiting from economies of scale and efficiencies in the distribution of its product.

The Company plans to apply 25% of the capital raising ($6.25m - $7.50m) to establish an Australian office and to source ingredients and Australian made health food and nutritional supplements that complement the existing product portfolio and that can utilise the Company’s existing distribution network in China.

The Eagle Group is led by an experienced Board, including 3 Australian based independent directors – Andrew Thomson (Non-Executive Chairman), Andrew Smith and Rodney Hannington (Non-Executive Directors).  The management team has a track record of delivering positive operating and financial outcomes. From FY14 to FY16, the Eagle Group generated revenue, gross margin and NPAT CAGR of 29.0%, 30.7% and 34.7% respectively. In FY16, the company generated $84.1m revenue, with a NPAT of $15.8m.

Eagle Group comprises of Eagle Health Holdings and its controlled entities. As of 31 December 2016, the Eagle Group holds 50 registered trade marks and 18 patents in China and registered key trade marks in Hong Kong and Macau. The Eagle Group’s products are manufactured in GMP-compliant certified manufacturing facility. The main products are:

  • amino acids products;
  • protein powder products;
  • lozenge products; and
  • dendrobium officinale products.

It is expected that the Chinese consumer health market will record a steady CAGR of 10% from 2016 to 2020, driven by strong demand for health food products from consumers that is in line with their growing awareness of healthcare and rising disposable incomes.

Eagle Health is looking to raise between $25 million and $30 million and will use these funds to expand distribution networks and broaden sales channels, establish an Australian office and operations, enhance brand recognition and strengthen research and development capabilities.  It is currently anticipated that a minimum of 10% of the NPAT per annum shall be paid as unfranked dividends to the Company’s shareholders following the results of 2016 FY (where payment will occur in 2017). On listing, market cap of Eagle Health Holdings will be between $125m and $130m.  

As set out in Section 9 of the prospectus, Eagle Health Holdings Ltd is subject to a range of risks, including but not limited to brand reputation, laws and regulation, market trends and competition.

 

Section 734(6) disclosure: The issuer of the securities is Eagle Health Holdings Limited ACN 616 382 515. The securities to be issued are ordinary shares. The disclosure document for the offer can be obtained by clicking on the link above. The offers of the securities are made in, or accompanied by, a copy of the disclosure document. Investors should consider the disclosure document in deciding whether to acquire the securities. Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the disclosure document (which can be done via the electronic application form which will become available by clicking the bid button above).‚Äč

OnMarket has a limited allocation. The offer close and the 'Pay By' dates may change. Bids over $10,000 may be scaled back more heavily. Duplicate bids under the same investment profile or investor name may be cancelled.

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