Skip to main content
Premium Trial:

Request an Annual Quote

MGI Tech Planning to go Public in $366M Chinese IPO

NEW YORK – Chinese sequencing tech company MGI Tech, a BGI affiliate, plans to go public this week in an initial public offering in China, targeting proceeds of RMB 2.53 billion (approximately $366.4 million based on Monday's exchange rate).

In a prospectus that the Shenzhen, China-based company issued last week, MGI said it plans to launch the offering of 41.3 million shares this Wednesday. Chinese investment banks CITIC Securities and China International Capital Corporation along with UBS Securities are the lead underwriters for the IPO.

The IPO funds will be used for various sectors of the company’s business, MGI stated, including its manufacturing and R&D facilities, semiconductor-based sequencer development project, and sales and services.

In July, the China Securities Regulatory Commission, a government ministry that regulates the securities industry in China, approved MGI's proposal to become public and be listed on the Shanghai Stock Exchange Science and Technology Innovation Board, commonly known as the STAR Market.

To be listed on the STAR Market, a company needs to simultaneously meet four requirements. Those include that the firm’s cumulative R&D investments for the past three years need to be at least 5 percent of the three-year cumulative revenues or the firm’s cumulative R&D investments for the past three years need to be at least RMB 60.0 million; at least 10 percent of the company’s total staff needs to be R&D staff; the company needs to have patents pertaining to key businesses; and the firm’s compound growth rate for the last three years is larger than 20 percent or the company’s total revenues are at least RMB 300.0 million.

According to the prospectus released by MGI, the company's annual total revenues for the past three years from 2019 to 2021 were RMB 1.09 billion, RMB 2.78 billion, and RMB 3.93 billion, respectively. Of the non-COVID-businesses, MGI said the revenues mostly came from its sequencer business, while for COVID-relevant businesses, the revenues were mostly from its lab automation offerings.

The company’s annual net profit for 2021 and 2020 was RMB 475.7 million and RMB 255.6 million, respectively, while it had a net loss of RMB 238.9 million in 2019.

As of Dec. 31, 2021, MGI’s employee headcount was 2,050, and, in addition to mainland China, the company also has subsidiaries in Hong Kong, Japan, the US, Latvia, and the UAE. The company said it had more than 1,300 customers spanning six continents.

In July, Illumina and BGI, MGI Tech’s parent group, reached a settlement and licensing agreement that will end the yearslong legal tug of war between the two sequencing giants in the US. In the same month, the company reached a court-approved agreement with Illumina in its patent lawsuit in the UK, enabling the company to make its HotMPS sequencing chemistry and instruments commercially available in the UK as of July 6.

Earlier this year, the company said it will make its CoolMPS sequencing chemistry and DNBSeq-G400 sequencer commercially available in the US at the end of this month after a certain Illumina patent is set to expire.