New stock issuance | The "A+H" giant strikes again! Jiangsu Hengrui Pharmaceuticals has launched its IPO, intending to be listed on May 23, with a subscription amount of 8,898.85 Hong Kong dollars per hand.

Futu News reported on May 15, $HENGRUI PHARMA (01276.HK)$ An announcement was made stating that the IPO subscription will be from May 15 to May 20, with the company proposing a global issuance of approximately 0.225 billion shares, expected to be listed on May 23.

Company Overview

Jiangsu Hengrui Pharmaceuticals was founded in 1970 and went public on the Shanghai Stock Exchange in 2000. It is an innovative international pharmaceutical company focused on the research, production, and promotion of high-quality drugs, concentrating on new drug research in areas such as oncology, metabolism, cardiovascular diseases, immunology, respiratory diseases, and neuroscience. It is one of the most innovative pharmaceutical leaders in China. Since its A-share listing, Jiangsu Hengrui Pharmaceuticals has accumulated cash dividends of approximately 8.029 billion yuan, which is equivalent to 16.8 times the funds raised during the A-share listing, and this was also Jiangsu Hengrui Pharmaceuticals' only previous financing in the Capital Markets.

In terms of R&D model, the company focuses on developing drugs with different characteristics for targets that have been identified as druggable. Its research scope has expanded from traditional small molecule drugs to various advanced drug forms such as protein degradation-targeting chimeras (PROTAC), peptides, monoclonal antibodies (mAb), bispecific antibodies (BsAb), multispecific antibodies, antibody-drug conjugates (ADC), radioligand therapy (RLT), and oligonucleotides.

The company has over 110 commercialized drugs, including 19 new molecular entity Innovative Drugs and 4 Other Innovative Drugs. At the same time, its pipeline covers over 90 candidate new molecular entity Innovative Drugs and 7 Other Innovative Drugs in clinical and later stages, with more than 30 Innovative Drugs in critical clinical research or later stages.

Jiangsu Hengrui Pharmaceuticals disease field and major pipeline layout.

Financial Overview

According to Jiangsu Hengrui Pharmaceuticals' 2024 annual report, the company achieved revenue of 27.985 billion yuan in 2024, a year-on-year increase of 22.63%; net income attributable to shareholders of the listed company was 6.337 billion yuan, a year-on-year increase of 47.28%; net income attributable to shareholders of the listed company after deducting non-recurring gains and losses was 6.178 billion yuan, a year-on-year increase of 49.18%. To ensure innovative output, the company continues to ramp up innovation efforts, maintaining a high level of investment in research and development, with a total research and development investment of 8.228 billion yuan during the reporting period, of which the capitalized research and development investment was 6.583 billion yuan, accounting for 29.4% of total revenue in 2024.

As of December 31, 2022, 2023, and 2024, the company's gross profit was 17.789 billion yuan, 19.295 billion yuan, and 24.136 billion yuan respectively.

Source: Prospectus.

Industry Overview

Driven by population aging, increased health awareness and life expectancy, and rising research and development spending, the global pharmaceutical market grew from 1,266.7 billion dollars in 2018 to 1,472.3 billion dollars in 2023, with a compound annual growth rate of 3.1%. It is expected to reach 1,938.7 billion dollars by 2028, with a compound annual growth rate of 5.7%. Meanwhile, China's pharmaceutical market increased from 1,533.4 billion yuan in 2018 to 1,618.3 billion yuan in 2023, and is expected to reach 2,342 billion yuan by 2028, with a compound annual growth rate of 7.7%. Factors such as accelerated approval of innovative drugs, expansion of medical insurance coverage, and the implementation of healthcare reform plans are expected to collectively drive the rapid growth of China's pharmaceutical market.

Source: Frost & Sullivan analysis.

Cornerstone Investor

Cornerstone investors have agreed to subscribe or cause their designated entities to subscribe for a relevant number of shares at the offering price under certain conditions, with a total amount of approximately 0.533 billion dollars (calculated based on the median of the offering price range). The cornerstone investors include: GIC, Invesco Advisers, UBS AM Singapore, Cordial Solar (a controlled subsidiary of Boyu Capital Opportunities Master Fund), Hillhouse, Millennium, Oaktree.

Source: Prospectus.

Use of funds

In terms of fundraising purposes, Jiangsu Hengrui Pharmaceuticals expects the net proceeds from the Global Offering to be approximately 9.4578 billion Hong Kong dollars (based on the median price of 42.75 Hong Kong dollars in the offering range). According to the prospectus, Jiangsu Hengrui Pharmaceuticals plans to use the funds raised from the Global Offering for the following purposes:

Approximately 45% will be used for clinical research of the Group's Innovative Drugs and drugs under development; approximately 20% will be used for the development of Innovative Drugs; approximately 10% will be used for potential global acquisitions and collaborations to enhance the Group's product pipeline and innovation capabilities; approximately 15% will be used for establishing new production and R&D facilities in China and overseas markets; and the remaining approximately 10% will be used as the Group's working capital and for other general corporate purposes.

More reading:Jiangsu Hengrui Pharmaceuticals Prospectus

For details, please click to view >> Beginner's Guide: How to subscribe for new shares? 5 dates to remember.

Use Futu to subscribe for new shares, 0 interest, 0 fees, 0 cash subscription, and quick dark market trading.Come and experience it >>

BecomeFutubull memberand enjoy up to 100 HKD in free subscription fee vouchers and discounts for mall members!

Editor/Afina

75K Views