China drug firms aim for Nasdaq


Three unnamed mainland pharmaceutical companies plan to seek listings on New York's Nasdaq stock exchange in the first half of 2007, each looking to raise US$100 million (HK$780 million), sources close to the deal sponsors say.

By Jackie Cheung
The Standard
Hong Kong
China
Distribuye:
Pau Echániz
New York
E.U.
La Nueva Cuba
Noviembre 12, 2006

Monday, November 06, 2006

Three unnamed mainland pharmaceutical companies plan to seek listings on New York's Nasdaq stock exchange in the first half of 2007, each looking to raise US$100 million (HK$780 million), sources close to the deal sponsors say.

Their overseas listing will follow the lead of peer, Fujian-based Wuyi International Pharmaceutical, one of the mainland's largest drug manufacturers, which is launching an initial public offering in Hong Kong aiming to raise up to HK$1 billion, either by the end of 2006 or in next year's first quarter, sources said.

Wuyi Pharmaceutical, which owns several brand names of medical products supplied mainly to hospitals, posted net income of about 150 million yuan (HK$148.18 million) in 2005.

Local brokerage firm, Sun Hung Kai Securities, will join UBC and Credit Suisse as a sponsor for the Wuyi deal.

Sources said the two Swiss investment banks are planning to take the other three mainland pharmaceutical firms to the Nasdaq rather than Hong Kong, as they would be able to sell the shares at a higher valuation.

In an earlier deal also arranged by UBS and Credit Suisse, Golden Meditech (8180), a Growth Enterprise Market-listed Chinese supplier of medical devices, spun off its 25 percent- owned China Meditech to float shares in Nasdaq in September 2005. The stock has risen about 37 percent so far.

Golden Meditech has said it was planning to either seek a dual listing in Hong Kong and Nasdaq, or to buy back all Hong Kong-listed shares and pursue a Nasdaq listing only.

Its chairman, Kam Yuen, said Golden Meditech's share price might reach 35 to 40 times company earnings - based on the average of US companies in the same industry - compared to less than 10 times earnings in Hong Kong.

American Oriental Bioengineering, the first mainland pharmaceutical company to list in the United States, has seen its stock price rising more than three times since its IPO in 2003.

Pharmaceutical or other high-end technology firms are trading at lower price-to-earnings ratios in Hong Kong than their peers in overseas markets, as the SAR lacks financial specialists with relevant knowledge, said one venture capitalist.