Biokin Pharma Seeks $500M HK IPO Amid Market Caution

Biokin Pharma aims to raise $500 million in Hong Kong IPO amid subdued market conditions.

By Athena Xu

7/11, 03:54 EDT

Key Takeaway

  • Sichuan Biokin Pharma files for a $500 million Hong Kong IPO, sponsored by Goldman Sachs, JPMorgan Chase, and Citic Securities.
  • Despite Hong Kong's subdued IPO market, Biokin's strong Shanghai performance (162.32 yuan/share) may attract investors.
  • Market conditions remain cautious; half of recent IPOs fell below offer prices, posing potential challenges for Biokin's listing.

Biokin's Hong Kong Listing Plans

Sichuan Biokin Pharmaceutical Co., a drugmaker already listed in Shanghai, has filed for a Hong Kong listing that could potentially raise about $500 million, according to sources familiar with the matter. The company submitted a preliminary prospectus dated Wednesday, though it did not specify the size of the initial public offering (IPO). The IPO is being jointly sponsored by Goldman Sachs Group Inc., JPMorgan Chase & Co., and Citic Securities Co., as indicated in the prospectus.

The exact size of the IPO is still under deliberation and may change, according to the sources, who requested anonymity due to the private nature of the information. Biokin has not responded to requests for comments on the matter. Earlier reports from IFR in May suggested that the Chengdu-based company was planning an IPO, potentially as soon as early next year. Biokin operates research and development centers in both China and the US, along with other facilities, as per its website.

Market Context

Hong Kong's IPO market has been relatively subdued recently, with IPOs hitting their lowest level in two decades in 2023. Despite this, there are signs of activity picking up. The financial hub is currently experiencing its busiest week for IPOs this year. However, market sentiment remains cautious, as evidenced by the fact that half of the six latest debuts have fallen below their offer prices.

The subdued market conditions in Hong Kong could pose challenges for Biokin's IPO. Investors are likely to be cautious, given the recent performance of new listings. However, the involvement of major financial institutions like Goldman Sachs, JPMorgan Chase, and Citic Securities as joint sponsors could lend credibility and attract investor interest.

Biokin's Market Performance

Biokin started trading at 24.70 yuan in Shanghai early last year and saw a significant surge, soaring over 120% in two weeks to 54.60 yuan. As of Thursday afternoon, the stock was trading at 162.32 yuan, giving the company a market value of 65 billion yuan ($9 billion). This strong performance in the Shanghai market could be a positive indicator for its upcoming Hong Kong listing.

The company's robust market performance in Shanghai may attract investors looking for growth opportunities. However, the success of the Hong Kong IPO will also depend on broader market conditions and investor sentiment at the time of the listing.