Shares in TigerMed Consulting, the region’s largest healthcare deal of the year so far, rocketed on their debut in Hong Kong on Friday. The secondary listing of the China-based provider of comprehensive biopharmaceutical R&D services closed up 13.3%.
The company, which is the country’s largest clinical CRO and already listed in Shenzhen, raised HK$10.7bn (US$1.4bn) last week.
The deal priced at the top of the HK$88-HK$100 range.
The success of the deal was never in doubt.
So confident were the banks on the deal – Bank of America, CICC, CLSA and Haitong International – that they decided to forgo a cornerstone tranche.
TigerMed’s shares in Shenzhen have risen 98% over the past year.
What added to the attraction of the deal, say analysts, is that with the rise in Tigermed’s A-share price since the announcement of the price range, Tigermed’s 16% H-share discount to the A-shares is attractive.
“On balance, we continue to think that the positives (strong market sentiment on the sector, top-tier margin) outweigh the negatives (weaker than peer revenue growth, high contract assets),” is the conclusion from Global Equity Research’s Arun George who publishes on Smartkarma.
Headquartered in Hangzhou, TigerMed has 15 overseas operation sites across 11 countries in Asia-Pacific, North America and Europe, and caters to the growing demand of Chinese customers expanding overseas, as well as multi-regional R&D projects sponsored by both Chinese and multinational customers.
Profits last year stood at Rmb975.9m (US$138m) on revenues of Rmb2.8bn.
Money raised from the IPO will be used for expansion both domestically and internationally.
TigerMed shares today pulled back slightly; down 2.65% to HK$110.30 as growing tension between the US and China weighed on sentiment.
