Tigermed roars in its Hong Kong stock trading debut, as Asia’s largest health care IPO of 2020 draws traders to its clinical trials
- Clinical trial and research firm’s secondary listing was the biggest in Asia this year
- Will use funds to expand overseas
Hangzhou Tigermed Consulting, the biggest listing this year by an Asian health care provider, jumped by as much as 19 per cent in its Hong Kong trading debut, as investors piled into China’s largest clinical researcher, betting that some of its 400 trials under way would bear fruit.
Tigermed’s shares began trading at HK$119, soaring from their initial public offering price (IPO) of HK$100. It trimmed that to a 13 per cent gain on a down day on the overall market. Yuan-denominated A shares of the company, based in the Zhejiang provincial capital, closed down 4.3 per cent 107.68 yuan (HK$120) on the ChiNext Board in Shenzhen.
“The scope of Tigermed’s clinical and laboratory service offerings provide an edge against peers, in our view,” according to Mia He, a senior analyst at Bloomberg Intelligence. “It offers data management and statistical analysis, which play a vital role in the clinical development of drugs and creates a high barrier to entry.”
Tigermed is among the many Chinese companies that have flocked to Hong Kong to make use of the bourse’s relaxed listing rules for pharmaceutical research teams – even those that have not sold any products – to raise capital. Tigermed plans to use
fund its overseas expansion, amid a surge in clinical trials for medicines and vaccines for treating coronavirus infections. The company may also use some funds for overseas acquisitions.
Tigermed showed all the signs of a stellar debut. Its offering, priced at the top end of a marketed range of between HK$88 to HK$100, was overbought by 20 times, making it one of the most sought-after IPOs in Hong Kong.
Allocations to retail investors were more than tripled to 23 million shares from 5.8 million shares, while institutional investors had their allocations slashed to 84 million shares from 101.2 million shares. Its fundraising surpassed South Korean drug maker SK Biopharmaceuticals, which raised US$794 million in a June IPO, according to Bloomberg data.
Still, Tigermed’s Hong Kong debut was “disappointing,” said Atta Capital’s portfolio manager Alan Li, owing to the stock’s narrow discount of about 25 per cent from their A-share prices. “The future performance will also be limited by their A shares,” he said.
Hong Kong’s stock exchange, the third-largest in Asia by capitalisation, which has captured the top place in the world’s IPO stakes in seven of the past 11 years, got a snub from US President Donald Trump. He said it “will not be a successful exchange any more.” His administration revoked the city’s special trading status over Beijing’s enforcement of a national security law for Hong Kong. The US is considering tightening listing rules that impact Chinese companies after the headline-grabbing Luckin Coffee accounting scandal.
