Fudan Zhangjiang (01349HK) announced that it intends to apply for A-share listing and trading on the Shanghai Stock Exchange, involving the allocation and issuance of no more than 27 million A-shares. This share accounts for approximately 4.63% of the issued share capital. The amount of capital raised is estimated to be about 97 million yuan (same below), of which 42 million yuan was used for two clinical research projects and 55 million yuan was used for the construction of a chemical drug technology R&D center.

Deutsche Bank said that it will raise Fudan Zhangjiang's target price from HK$9 to HK$10.7. This is quite a prediction of a price-earnings ratio of 36 times next year, reflecting the release of value by issuing A-shares. However, the company did not provide a timeline for issuing A-shares. The bank wishes to emphasize that Fudan Zhang Jiang plans to issue an A-share listing for the first pharmaceutical stock in Hong Kong. Unlike those “Hong Kong A shares”, it is expected that the price-earnings ratio will be reasonably increased and the rating will remain “bought”.