According to overseas media Bloomberg, Jiangsu Hengrui Medicine Co., Ltd. is considering a second listing in Hong Kong next year. People familiar with the matter said that the company is discussing potential share sales with consultants, which may raise at least US$2 billion (about HK$15.5 billion). This news has attracted widespread attention. In response, Hengrui Medicine said that it "would not comment" on the rumor.Affected by this news, Hengrui Medicine's stock price has fluctuated significantly, and its current market value is about RMB 300 billion (US$43 billion).

In recent years, "A+H" stocks have continued to expand. With the listing of Midea Group on the Hong Kong Stock Exchange on September 17, there are currently 150 companies that have successfully achieved "A+H" dual listings. Among them are many biopharmaceutical companies, including innovative pharmaceutical companies: Innovent Biologics, Fudan Zhangjiang, CanSino Biologics, Rongchang Bio, Junshi Biosciences, BeiGene, etc., traditional pharmaceutical companies: Shanghai Pharmaceuticals, Fosun Pharma, Baiyunshan, Livzon Group, Xinhua Pharmaceutical, etc., CXO companies: WuXi AppTec, Tigermed, Corning Life Sciences, Asymchem, Zhaoyan Pharmaceutical, etc. In addition, Baili Tianheng has also submitted a listing to the Hong Kong Stock Exchange this year, intending to dual-list on the A+H markets. The original intention of A-share companies seeking "A+H" listings is mostly pointing to globalization. Many A-share companies also mentioned in their prospectuses that the purpose of the funds raised from the company's Hong Kong IPO includes "expanding overseas business."

For example, Baili Tianheng stated in its prospectus that the funds raised will be used for the company's research and development activities of biological drugs outside mainland China; to establish a global supply chain, mainly for the company's candidate biological drugs outside mainland China to build or acquire new production facilities; and for the company's operating capital and other general corporate purposes for its business outside mainland China.

Hengrui Medicine has accelerated its overseas layout in recent years and sought to be listed on the Hong Kong Stock Exchange, which may also be related to "expanding overseas business." In addition, the listing of leading mainland industry companies in Hong Kong will also inject more vitality and attractiveness into the Hong Kong IPO market.

According to Hengrui Medicine's 2024 first-half financial report, operating income in the first half of the year was 13.601 billion yuan, a year-on-year increase of 21.78%; net profit in the first half of the year was 3.432 billion yuan, a year-on-year increase of 48.67%; Q2 single-quarter net profit was 2.063 billion yuan, a year-on-year increase of 93%.

Among them, the revenue of generic drugs continued to decline, and sales were still affected by centralized procurement. The revenue of innovative drugs continued to grow, but the growth rate was limited. In the first half of the year, the revenue of innovative drugs was 6.612 billion yuan, which was less than the sales of BeiGene's Zebutinib product. However, Hengrui received a down payment of 160 million euros for the pipeline licensing transaction of Merck, Germany, which became a highlight of performance growth.

In recent years, Hengrui Medicine has continued to increase its internationalization and try different BD models. Last year, Hengrui Medicine reached 5 cross-border license out transactions. This year, it advanced from "license out" to "newco", cooperated with US dollar funds to establish a new company, authorized 3 GLP-1 products to go overseas, and obtained 19.9% of the equity of the new company.

In addition, according to Deep Blue View, Hengrui Medicine recently hired Johnson & Johnson BD veteran Jens Bitsch-Norhave as "Head of Global Development Affairs". This means that Hengrui's BD business head is a foreigner for the first time, which also means that Hengrui will continue to increase its overseas BD. Listing in Hong Kong may also be an attempt at its internationalization.

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