Goldman-Backed Drugmaker Hepalink Surges in China (Update1)
By Simeon Bennett
May 6 (Bloomberg) -- Shenzhen Hepalink Pharmaceutical Co., the drugmaker partly owned by Goldman Sachs Group Inc., rose as much as 27 percent on its first day of trading in Shenzhen today.
Hepalink, which calls itself the world’s biggest maker of the blood-thinner heparin, climbed to as high as 188 yuan from its IPO price of 148 yuan. Shares of the Shenzhen-based company, whose founders have become China’s wealthiest people, rose 21 percent to 179.10 yuan as of 10:01 a.m. local time.
The IPO price was the highest by any company in China, helping Hepalink raise 5.9 billion yuan ($864 million) to expand production capacity to service clients including Paris-based Sanofi-Aventis SA. The stock was one of three that started trading in China today, with Shanghai Communications Technology Development Co. surging as much as 58 percent.
Hepalink’s “IPO price is too high and its performance won’t be good after the debut,” said Zhang Kun, a strategist at Guotai Junan Securities Co. in Shanghai. “The IPO shares were priced at a time when investors ramped up small-cap stocks on the secondary market. The madness has been receding.”
The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, fell 1 percent and the CSI 300 Index declined 1.2 percent.
Heparin is purified from pig intestines, then made into a shot used to prevent blood clots in millions of patients with heart conditions or undergoing surgery.
Goldman Investment
A unit of Goldman Sachs paid $4.9 million for 12.5 percent of Hepalink in 2007, according to the IPO prospectus. Edward Naylor, a Goldman Sachs spokesman in Hong Kong, declined to comment.
Hepalink was founded by couple Li Li and Li Tan in 1998 and they hold a combined stake of 72 percent after the IPO, according to the prospectus. Based on the current stock price, that stake would be valued at about 51.5 billion yuan, or about $7.5 billion, eclipsing the wealth of BYD Co. Chairman Wang Chuanfu. Wang was China’s richest person with a fortune of $5.1 billion, according to the 2009 Hurun China Rich List.
To contact the reporter on this story: Simeon Bennett in Singapore at sbennett9@bloomberg.net
Last Updated: May 5, 2010 22:39 EDT
Thursday, May 06, 2010
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