Hengrui Pharma today closed up 32.24% in the dark market, at HKD 58.25, with an opening price of HKD 49

Hengrui Pharma today closed up 32.24% in the dark market, at HKD 58.25, with an opening price of HKD 49.

Hengrui Pharma announced that the final price for its H shares issuance is HKD 44.05 per share, and it will be listed on the Hong Kong Stock Exchange on May 23. This issuance attracted participation from many internationally renowned long-term funds and sovereign wealth funds, with cornerstone investors including the Government of Singapore Investment Corporation, Invesco, UBS, etc., with a subscription amount of approximately HKD 4.131 billion, accounting for 41.77% of the total issuance size. Analysts believe that the listing in Hong Kong will promote the re-discovery of Hengrui's value, especially in terms of overseas business potential.

Issuance Details: Tight Schedule, Supported by a Luxurious Cornerstone Team

It is understood that the public offering of Hengrui Pharma's H shares in Hong Kong will end on May 20, with the final issuance price expected to be determined by the 22nd, and it may officially land on the main board of the Hong Kong Stock Exchange as early as May 23, achieving a dual listing of "A+H". This issuance is co-sponsored by Morgan Stanley, Citigroup, and Huatai International.

Notably, Hengrui Pharma's IPO has attracted participation from a "luxurious cornerstone investment team," including the Government of Singapore Investment Corporation (GIC), Invesco, UBS Global Asset Management (UBS-GAM), Hillhouse Capital, and Boyu Capital. According to the prospectus, cornerstone investors subscribed for or caused their designated entities to subscribe for a certain number of offered shares at the issuance price, with a total amount exceeding HKD 4 billion (USD 533 million), accounting for 43.04% of the issuance size (assuming the over-allotment option and issuance adjustment rights are not exercised).

The support from these investment giants not only demonstrates international capital's confidence in Hengrui Pharma but will also play an important role in the company's future business development. GIC, as one of the largest sovereign wealth funds in the world, will help Hengrui expand its global market with its international vision and resource network; Invesco and UBS-GAM, as global asset management giants, will enhance Hengrui's recognition among international investors; Hillhouse Capital and Boyu Capital's deep experience and industry resources in the healthcare sector are expected to support Hengrui's innovative research and commercialization.

Why List in Hong Kong? A Key Step in the Internationalization Strategy

Listing in Hong Kong is extremely important for Hengrui Pharma and is a key step in its overseas strategy. First, the broad base of international investors in the Hong Kong capital market will help enhance the company's brand influence in the global pharmaceutical industry. Second, this listing can further optimize the capital structure and open up new financing channels, providing assistance for the company's diversified financing. Moreover, the listing will help the company expand overseas business and international research and development cooperation, strengthen its international layout, further achieve breakthroughs in overseas markets, and enhance the company's global competitiveness.

Hengrui Pharma's financial performance remains strong. In 2024, the company achieved operating revenue of RMB 27.985 billion, a year-on-year increase of 22.63%; the net profit attributable to shareholders of the listed company was RMB 6.337 billion, a year-on-year increase of 47.28%. In the first quarter of 2025, the company continued to maintain strong growth, achieving operating revenue of RMB 7.206 billion, a year-on-year increase of 20.14%; The net profit attributable to shareholders of the listed company is 1.874 billion yuan, a year-on-year increase of 36.90%. The company's R&D investment is also considerable, with a cumulative R&D investment of 8.228 billion yuan in 2024, accounting for 29.40% of sales revenue. Since 2011, the cumulative R&D investment has reached 46 billion yuan.

19.3% Discount Issuance

Based on Hengrui's pricing of HKD 44.05 per share, compared to the average A-share price over the past ten days, the H-share issuance price has a discount of 19.3%. Even so, Hengrui's pricing still shows a significant valuation premium compared to established H-share pharmaceutical companies like Shiyao and China Biopharmaceutical.

According to Wind data, compared to the average discount of 27.4% for the six largest A+H listed companies in the pharmaceutical industry, this still reflects the capital market's recognition of leading pharmaceutical companies, while also demonstrating Hengrui Pharma's confidence in its own value and positive expectations for future market development.

The funds raised, after deducting issuance costs, will be used for R&D plans; to build new production and R&D facilities in China and overseas, and to expand or upgrade existing production facilities in China; working capital and other general corporate purposes, etc.

Against the backdrop of increasingly fierce global competition in innovative drugs, Hengrui Pharma is leveraging its Hong Kong listing to expand its international influence, further consolidating its leading position among Chinese innovative drug companies while accelerating its internationalization process. For Chinese innovative drug companies, this will be a landmark event and may provide a reference for more Chinese pharmaceutical companies with international ambitions.

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