Chinese medical tech platform WuXi AppTec launches $1 bln HK listing (updated)

Tongcheng Travel Holdings

28/11/2018 06:50

(Adds pricing and listing dates and use of proceeds)
    By Julia Fioretti
    HONG KONG, Nov 28 (Reuters) - Shanghai-listed Chinese
medical tech platform WuXi AppTec  603259.SS  has launched a
Hong Kong listing of up to $1.06 billion, braving weak markets
and testing investor sentiment after a string of badly
performing IPOs.
    WuXi's listing comes after other companies have had to
drastically scale back their funding ambitions because of
jittery markets, such as online parenting firm Babytree Group
 1761.HK  and online travel agent Tongcheng-Elong  0780.HK .
 urn:newsml:reuters.com:*:nL8N1XW0HS  urn:newsml:reuters.com:*:nL4N1XO2E2
    Others still have put off their IPO plans as they wait out
the market uncertainty.
    That makes WuXi's hopes of raising between $954 million and
$1.06 billion especially ambitious. The company is selling
116.47 million shares at a price range of HK$64.1 to HK$71.5
($8.19-$9.13), a discount of between 19 percent and 27 percent
to its closing price of 78.36 yuan ($11.27) on Tuesday,
according to two sources familiar with the deal.
    The company could raise up to $1.2 billion if a greenshoe,
or over-allotment option, is exercised.
    Hong Kong is on track to become the world's top IPO centre
by volume this year, with $33.2 billion raised so far, Refinitiv
data show.
    But most deals have sunk below their IPO prices, buffeted by
concerns over a worsening China-U.S. trade war and slowing China
growth that have roiled markets.
    Chinese food delivery-to-ticketing services company Meituan
Dianping  3690.HK  raised $4.2 billion in its September IPO in
what was the world's biggest internet-focused listing in four
years, but its shares have since slumped over 30 percent.
    Smartphone maker Xiaomi  1810.HK  has also fallen 14.5
percent since listing in July, while the Hong Kong benchmark
index  .HSI  has fallen 11 percent this year.
    Shanghai-based WuXi describes itself as the largest global
pharmaceutical R&D services platform in Asia by revenue,
providing research and manufacturing services and testing
services for medical devices.
    The company had revenues of 4.41 billion yuan in the first
half of this year, up from 3.67 billion yuan in the same period
last year, according to its prospectus.
    WuXi's profits jumped 67 percent year-on-year to 1.3 billion
yuan in the first half of 2018.
    WuXi intends to use the IPO proceeds to expand its capacity
across all business units globally, invest in seven China
projects such as a Chengdu R&D campus and set up a bioanalytical
laboratory in San Diego, California, according to the
prospectus.
    It also intends to fund the acquisition of contract research
organisation companies.
    The deal is expected to be priced on Dec. 6 and list on Dec.
13, according to one of the sources.
    Goldman Sachs, Huatai Financial and Morgan Stanley are
sponsoring the IPO.
        

($1 = 6.9542 Chinese yuan renminbi)

($1 = 7.8275 Hong Kong dollars)

 (Reporting by Julia Fioretti; Editing by Stephen Coates)
 ((julia.fioretti@thomsonreuters.com; +852 2912 6686; Reuters
Messaging: julia.fioretti.thomsonreuters.com@reuters.net))