China’s WuXi Ap­pTec raises $1bn in Hong Kong list­ing

Gulf Times Business - - BUSINESS -

Chi­nese med­i­cal tech platform WuXi Ap­pTec raised $1.01bn in its Hong Kong list­ing, sources said, valu­ing the com­pany at $10.2bn in a deal that marks one of this year’s last big stock of­fer­ings in the Asian fi­nan­cial hub. Shang­hai-listed WuXi Ap­pTec priced its Hong Kong shares at HK$68 ($8.71) apiece, at the mid­dle of an in­di­cated range of HK$64.1-HK$71.5, the sources told Reuters on Fri­day.

That rep­re­sents a dis­count of 25% to its clos­ing price of 79.99 yuan ($11.63) on Thurs­day.

It could raise up to $1.16bn if an over­al­lot­ment op­tion is ex­er­cised within a month of the start of trading, which would value the com­pany at $10.3bn, ac­cord­ing to a term sheet seen by Reuters.

WuXi Ap­pTec did not re­spond to Reuters re­quest for com­ment.

This list­ing should serve as pos­i­tive news for Hong Kong, where many firms such as Meituan Dian­ping have sunk be­low their ini­tial pub­lic of­fer­ing (IPO) prices, while oth­ers have scaled back their tar­geted fundrais­ing amid jit­tery mar­kets. Bankers have been hop­ing for WuXi Ap­pTec and tech gi­ant Ten­cent’s mu­sic arm, which launched its highly an­tic­i­pated US IPO of up to $1.2bn on Mon­day, to help usher in 2019 on a pos­i­tive note. Re­fer­ring to pre­vi­ous day’s guid­ance of HK$70, a source said, WuXi Ap­pTec could have priced higher, but wanted to leave money on the ta­ble be­cause of volatile mar­kets this week.

Hong Kong is poised to be­come the world’s top IPO cen­tre by vol­ume this year, with $33.2bn raised so far, Refini­tiv data shows. How­ever, con­cerns over mount­ing trade fric­tion be­tween China and the United States and slow­ing growth in the world’s sec­ond-big­gest econ­omy con­tin­ued to weigh.

Hong Kong’s bench­mark Hang Seng in­dex is down more than 12% this year. Shang­hai-based WuXi Ap­pTec de­scribes it­self as the largest phar­ma­ceu­ti­cal R&D ser­vices platform in Asia by rev­enue. The com­pany had rev­enues of 4.41bn yuan ($641mn) in the first half of this year, ver­sus 3.67bn yuan in the same pe­riod last year, ac­cord­ing to its list­ing prospec­tus.

The med­i­cal tech platform’s first-half profit surged 67% to 1.3bn yuan. WuXi Ap­pTec in­tends to use the pro­ceeds from the list­ing to ex­pand ca­pac­ity across its units glob­ally, in­vest in seven China projects such as a Chengdu R&D cam­pus and set up a bio-an­a­lyt­i­cal lab­o­ra­tory in San Diego, Cal­i­for­nia, the prospec­tus said. It also in­tends to fund the ac­qui­si­tion of con­tract re­search or­gan­i­sa­tion com­pa­nies.

WuXi Ap­pTec shares will be­gin trading in Hong Kong on De­cem­ber 13. Gold­man Sachs, Hu­atai Fi­nan­cial and Mor­gan Stan­ley are spon­sor­ing the list­ing.

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