China seizes IPO of leading Asian biotech company Wuxi Apptec

28/03/2018

The main biotech company of mainland China, privatized in New York two years ago, towards the A-share market just seven weeks after application to the list

 

 

WuXi AppTec , the world’s leading biotechnology company, which was privatized in New York two years ago, got the green light for an initial public offering on the Shanghai stock exchange, just seven weeks after the presentation of the application.

It is expected that the listing will increase by more than 5.7 billion yuan ($ 907.5 million), which the company will use to expand research facilities and build new facilities. The rapid approval adds further evidence to the fact that competition between the Hong Kong, China and Singapore exchanges is heating up, while it is quick to list promising technology companies.

AppTec is the main Chinese CRO and will be a key player in China’s future profits

 

AppTec was the first Chinese technology company to privatize in New York. The company is a contract research organization (CRO) that helps drug manufacturers to shorten discovery and development procedures while reducing overall costs. It is considered the main Chinese CRO, according to Ivan Li, a wealth manager of the Loyal Wealth Management investment fund.

“It is believed that the regulator has closely monitored its operations for a while. AppTec is among the stars of China’s future profit,” he added. The company had a value of US$3.3 billion dollars when it was privatized in New York at the end of 2015, with net profits of 1.06 billion yuan for the first nine months of 2017, after earning 975 million yuan in the entire year.

Its IPO follows a stable pipeline of Chinese companies, including the manufacturer of anti-virus software Qihoo 360 Technology, which became public on the A-share market in recent months, through reverse merger operations or back-door insertions.

Both the Shanghai and Shenzhen stock exchanges – under the direction of the China Securities Regulatory Commission (CSRC) – have done everything to attract the technology start-ups financed from abroad operating on the continent since the beginning of the year, anxious not to miss profits to exchanges in Hong Kong, New York, and Singapore.

The CSRC would have previously blocked the fluctuations of technology start-ups if their ownership structures and their profitability had not been compliant with the strict internal pricing rules, before making a turnaround this year chasing tech unicorns – private tech companies with valuations above US$1 billion.

Earlier this month, Foxconn Industrial Internet – the world’s largest contract manufacturer whose products include the iPhone – got the go-ahead from the CSRC to launch an IPO of 27 billion yuan just five weeks after submitting their application for listing.

“The rapid approval of AppTec will probably mean that more unicorns will be attracted to the A-share market because valuations are higher,” said Huatai Securities analyst Liu Qiaoyu. The Shanghai exchange has already declared that it has a list of promising technology companies on the continent, committing itself to overcoming the difficulties of access to the internal capital market.

 

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