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Chinese drugmaker poised for HK IPO
By Kennix Chim and Donny Kwok |
October 12, 2010, Tuesday
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Print Edition
Print Edition
SIHUAN Pharmaceutical Holdings Group Ltd, China's largest cardio-cerebral vascular drugmaker, seeks to raise up to US$741 million through its Hong Kong initial public offering, according to a term sheet seen yesterday.
It marked the latest in a flurry of stock offerings in the city in recent months.
Hong Kong has become a top choice for health care companies seeking to raise cash, thanks to the high valuations investors give new listings, as China promises to spend billions to reform its antiquated medical system.
Sihuan is selling 1.25 billion new shares, or 25 percent of its enlarged share capital, at HK$3.88-HK$4.60 (US$0.50-US$0.59) each, the term sheet said, representing the equivalent of 2011 price to earnings multiple of 22.5 times to 26.7 times.
The company has also signed up six cornerstone investors, including billionaire investor George Soros, China Life Insurance (Overseas), CCB International, Yun Feng Fund, which set up by Alibaba's Chairman Jack Ma, for a combined US$190 million worth of shares, a source close to the deal said.
Investor appetite for Chinese medical stocks has grown as the country promises to create a national health care safety net and as the sector's relative immunity to economic cycles offers shelter in times of turmoil.
"It is a very hot issue for investors who aim for quick profit," said Alex Wong, a director from Ample Finance.
Sihuan offers products in China covering several major medical therapeutic areas, namely cardio-cerebral vascular, anti-infective, metabolic, oncological and nervous system, according to the company's website.
It marked the latest in a flurry of stock offerings in the city in recent months.
Hong Kong has become a top choice for health care companies seeking to raise cash, thanks to the high valuations investors give new listings, as China promises to spend billions to reform its antiquated medical system.
Sihuan is selling 1.25 billion new shares, or 25 percent of its enlarged share capital, at HK$3.88-HK$4.60 (US$0.50-US$0.59) each, the term sheet said, representing the equivalent of 2011 price to earnings multiple of 22.5 times to 26.7 times.
The company has also signed up six cornerstone investors, including billionaire investor George Soros, China Life Insurance (Overseas), CCB International, Yun Feng Fund, which set up by Alibaba's Chairman Jack Ma, for a combined US$190 million worth of shares, a source close to the deal said.
Investor appetite for Chinese medical stocks has grown as the country promises to create a national health care safety net and as the sector's relative immunity to economic cycles offers shelter in times of turmoil.
"It is a very hot issue for investors who aim for quick profit," said Alex Wong, a director from Ample Finance.
Sihuan offers products in China covering several major medical therapeutic areas, namely cardio-cerebral vascular, anti-infective, metabolic, oncological and nervous system, according to the company's website.
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