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WuXi AppTec raises $902.62 million in Shanghai IPO

By (chinadaily.com.cn)Updated: 2018-05-11 08:53

China's leading global contract research outsource provider WuXi AppTec, successfully listed on the main board of the Shanghai Stock Exchange on Tuesday, marking the nation's first unicorn enterprise to get initial public offering approval on the A-share market.

WuXi AppTec raised 5.74 billion yuan ($902.62 million) in the IPO. The company plans to issue 104 million shares, taking up no less than 10 percent of its total share capital, and sell shares at 21.60 yuan each, it said in its prospectus to the Shanghai Stock Exchange. Its closing price was 31.10 yuan per share.

WuXi AppTec said it will use the proceeds in its expansion projects in Tianjin and Suzhou, Jiangsu province, and its research and development center at its operational headquarters in Shanghai.

The company launched its IPO on the A-share market in April, and took only 50 days to pass its review. Market insiders predict that WuXi AppTec's listing on the A-share market will hopefully see its market value exceed 100 billion yuan.

The company's fast IPO approval can be attributed to the A-share market's recent favorable policies to unicorns.

Liu Jingkun, an analyst at ChinaVenture Institute, said: "Ever since 2017, the China Securities Regulatory Commission has accelerated its process of IPO review ... and that policy environment is beneficial to WuXi AppTec."

Chen Qiaoshan, senior medical analyst at the internet consultancy Analysys, said: "From the privatization of US stocks to the three-for-one share split return to the domestic stock market, WuXi AppTec is adequately prepared, and is familiar with the listing process. This explains why it got IPO approval in such a short period of time.

"The WuXi AppTec IPO will be popular with investors because it is the leading company of a contract research organization, which includes CRO, contract manufacturing organization, and contract development and manufacturing organization. The company has a complete industrial chain.

"In addition, after the country levied no tariffs on imported cancer-fighting medicines, domestic drug enterprises will be forced to update their technologies. Therefore, the demand for R&D will increase, which is a great opportunity for CROs," she said.

The company also announced on its website that its sales revenue in the first quarter was 2.14 billion yuan, growing 21 percent year-on-year. Its net profit reached 291 million yuan, 14 percent lower than the same period of last year, due to increased financial expenses.


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