Opening a new 'gateway': Why Q3 Medical is looking east to Hong Kong for its stock flotation

Q3 MEDICAL, THE Irish-headquartered medical device firm, has said it is on track to list publicly in Hong Kong within the next year as it eyes up more business in Asia.

The company, which makes stent devices, recently received approval as an Irish company to proceed with an eventual listing on the exchange. This is the first time an Irish-incorporated applicant has got the green-light to pursue a listing there.

“Ireland wasn’t registered as a jurisdiction for the listing, just like Ireland had to register as a jurisdiction in Nasdaq or the New York Stock Exchange,” Eric Mangiardi, the company’s chief executive, said.

He expects Q3 Medical to list by the end of the year or early 2021 where the company hopes to raise between €125 million and €150 million. Before that company is closing a “pre-IPO round” of €50 million.

Mangiardi said that these initial steps open a “gateway” between Hong Kong and Ireland and Europe.

Last year, the Hong Kong Stock Exchange made a £32 billion bid to acquire the London Stock Exchange but the offer was ultimately pulled.

“It seemed to me that there was a big interest from the exchange itself in creating an additional gateway to Europe,” he said.

“It’s a great opportunity (for Irish companies) as well because there are so many things going on in medtech in Ireland.”

Mangiardi said that the company is doing a lot of business in Asia currently and listing in Hong Kong provided “a real viable opportunity to continue to fund the business long-term”.

He added that Q3 is building a new manufacturing facility in China. The company is headquartered in Ireland with a small staff here but the bulk of its business is done in the US, Asia and elsewhere in Europe.

The latest accounts available for Q3 Medical – for the year ended December 2017 – show that the company made a loss that year of €4.4 million.

Alternative locations

Mangiardi said Q3 Medical had explored listing options in locations like New York and London.

“With the Brexit issue and the unknown there, raising capital in London didn’t make a lot of sense, just because of the potential risk,” he said.

“There’s a huge amount of future opportunity growth in Asia, just in general and Hong Kong straddles the Asia-European market fairly well in terms of laws.”

Mangiardi added that the recent political unrest in Hong Kong has not been a deterrent for doing business there.

Exchanges such as the London Stock Exchange and Nasdaq in New York are often the markets most associated with public listings but firms have explored alternative locations to float too.

Euronext, the pan-European exchange, has been making pushes to attract scaling tech companies to its exchanges. This has included efforts at Euronext Dublin.

Waterford startup Kollect recently floated in Stockholm. It marked an unusual route for a small company to take, opting for flotation to raise early-stage capital rather courting venture capital firms.

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