Chinese pharmaceutical firm Jiangsu Hengrui had a storming first day of trading in Hong Kong on Friday, up 25.2 per cent at closing — a sign of hope for the city’s prospects as a listing hub.
Hong Kong saw a steady decline in new offerings after a regulatory crackdown by Beijing in 2020 led some mainland Chinese mega-companies to put their plans on hold.
But this year, Jiangsu Hengrui is the latest of dozens of Chinese companies debuting on the Hong Kong Stock Exchange, raising around $1.3 billion in one of the world’s biggest biopharma initial public offerings (IPO) this year.
Its listing came days after Chinese battery giant CATL’s blockbuster debut, the world’s biggest IPO this year so far at $4.6 billion.
Singapore-based biotech start-up Mirxes also launched a roughly $1.4 billion debut on Friday in Hong Kong.
In Friday’s trading, Jiangsu Hengrui’s shares ended at HK$55.2, up from its HK$44.1 list price, which was at the top of the range indicated in its prospectus.
Founded in the early 1970s as a raw drug material manufacturer in the eastern Chinese city of Lianyungang, Jiangsu Hengrui has gained international recognition as a rapidly emerging biotechnology company.
It has entered into development agreements with multiple global pharmaceutical companies, including US pharma giants Merck and Ideaya Biosciences.
International investors are ‘starting to dip their toes into the Chinese markets and into Chinese equities,’ Jacob Grapengiesser, chief investment officer of East Capital, told AFP.
Investors are increasing positions in Hong Kong’s market as the companies are ‘very much undervalued’, he said.
Hong Kong’s market for listings this year is forecast to surge to over $22 billion, according to data compiled by Bloomberg.
