Markets· Equity· IPO

Liaoning Chengda Biotechnology’s IPO to debut on SSE STAR Market

minutes 2021/10/27 04:13:00

Oct 27, 2021 (China Knowledge) - Liaoning Chengda Biotechnology (688739) to start trading on the Shanghai Stock Exchange's STAR Market Oct 28, tomorrow. The firm has issued 41.65 mln shares priced at RMB 110 per share raising RMB 4.58 bln. Its price-to-earnings ratio (PE) stands at 54.24. During subscription the IPO was 3,501 times oversubscribed.

CITIC Securities, China Merchants Securities, Morgan Stanley Huaxin Securities acted as the lead underwriter, and CITIC Securities served as the sponsor for the IPO.

Liaoning Chengda Biotechnology Co Ltd is a China-based company mainly engaged in the research, production, and sales of human vaccines. The Company's main products include rabies vaccine for human use, freeze-dried rabies vaccine for human use, inactivated Japanese encephalitis vaccine for human use and freeze-dried encephalitis inactivated vaccine.

In FY 2020, Liaoning Chengda Biotechnology garnered a total revenue of RMB 2 bln, up 19% YoY. In terms of net income, it achieved RMB 918 mln, rising 31% YoY. In H1 2021, the company reported revenue of RMB 1.17 bln, a YoY increase of 14%, and its net profits reached RMB 575 mln, up 10% YoY.

The company is in the pharmaceutical and biological industry that is currently made of 399 counters in Shanghai and the Shezhen Stock Exchange with a total combined market capitalization of RMB 7,739 bln, industry’s average PE of 38 times. The pharmaceutical and biological industry’s index is up 6.85% year-to-date, ranking it the 18th place among all 29 broad industry groupings.

Shanghai Pharmaceuticals Holding Co.,Ltd (601607) takes up the top spot in terms of sales in the industry, reporting RMB 191.91 bln of sales in 2020, with a net profit of RMB 4.5 bln, at 10 times PE. The second largest is Jointown Pharmaceutical Group Co., Ltd (600998), a total revenue of RMB 110.86 bln and a net profit of RMB 3.08 bln, at 8 times PE. Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited (600332) ranked third. It garnered a total revenue of RMB 61.67 bln last year, and a net profit of RMB 2.92 bln, with 13 times PE.

The average industry’s PE for the same or similar stocks on Hong Kong Exchange (HKEx) and the U.S. stock markets for pharmaceutical and biological is 34 times and 50 times, respectively. On a year-to-date basis, the industry’s index on the HKEx rises 12.82% and the U.S is up 24.09%.

There will be another 1 IPO debut tomorrow, Rumere Co., Ltd. (301088).

Since January, a total of 396 companies have listed on either Shanghai or Shenzhen Stock Exchange, most are mainly in the machinery equipment, electronics and pharmaceutical and biological industries.

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