One of China’s largest drugmakers, Simcere Pharmaceutical Group, has passed the listing hearing in Hong Kong last week and launched its $461 million IPO subscription period to the general public starting Tuesday.
The company expects to price at HK$12.1 to HK$13.7 per share and will be ready for the Hong Kong Stock Exchange on October 27. The minimum purchase amount is HK$13,838 for 1,000 shares.
Morgan Stanley Asia Ltd. and China International Capital Corp. Hong Kong Securities Ltd. (CICC) are joint sponsors on this deal.
The company said in its filing that it has a diversified product portfolio, including seven generic pharmaceuticals, two category I innovative pharmaceuticals, and one new formulation drug.
Simcere engages in the R&D, production and commercialization of pharmaceuticals in three focused therapeutic areas. They are oncology (including cell therapy), central nervous system diseases and autoimmune diseases. These three therapeutic areas accounted for 24.7% of the total PRC pharmaceutical market in terms of sales revenue of pharmaceuticals in 2019 and grew faster than the overall PRC pharmaceutical market from 2015 to 2019, according to Frost & Sullivan.
Unlike most pharmaceutical companies seeking to go public in Hong Kong, Simcere is a mature company that has been profitable for years. The company’s revenue increased from 3,867.9 million yuan in 2017 to 5,036.7 million yuan in 2019, representing a CAGR of 14.1%.
At the same time, Simcere’s net profit increased from 350.4 million yuan in 2017 to 1,003.6 million yuan in 2019, representing a CAGR of 69.2%. Affected by the pandemic, it’s profit was down almost 60% from 461 million yuan for the six months ended June 30, 2019 to 184.8 million yuan for the six months ended June 30, 2020.
Simcere Pharmaceutical was previously listed on the New York Stock Exchange in April 2007 but the company, to avoid regulatory scrutiny in the United States, decided to go private in late 2013.