"Science and Technology Innovation Board Daily" news on June 25th (Reporter Zheng Bingxun): "Since listing on the Hong Kong Stock Exchange, Fosun Henlius' stock price has not reached expectations and trading volume is small due to factors such as global macroeconomics, medical industry, and overall trends of Hong Kong stocks. It has not raised funds through equity financing since listing, and its advantages as a listed company have not been fully reflected.".

Late at night on the 24th, Fosun Pharma (600196.SH) announced that based on the market performance of its controlling subsidiary, Fosun Henlius (2696.HK), it plans to privatize it. It confirms rumors circulating in the market more than a month ago about Fosun Henlius' plan to go private and delist.

Fosun Henlius landed on the Hong Kong Stock Exchange in September 2019, and raised approximately HKD 3.1 billion through its IPO. Its closing price on the first day of listing was HKD 49.45 per share, with a total market value of approximately HKD 26.7 billion. As of May 23 this year, its stock price was HKD 18.84 per share (suspended from trading), and the company's total market value was approximately HKD 10.2 billion, a decrease of approximately 62% from its initial listing.

Zhao Heng, founder of medical strategic consulting firm Latitude Health , told "Science and Technology Innovation Board Daily" reporters, "The market value and liquidity of Hong Kong stocks are too low, and they have lost the meaning of listing. Fosun Henlius' delisting can help companies seek better financing channels and promote their own development. In the future, the company may also go public in other markets."

In fact, in July 2023, long before this, Fosun Henlius announced that it had terminated plans to go public on the Science and Technology Innovation Board due to comprehensive considerations of the actual situation and capital market planning.

On this issue, reporters for "Science and Technology Innovation Board Daily" asked Fosun Pharma employees whether there were plans for Fosun Henlius to go public on other markets. The other party stated, "Currently, the company is focusing on privatization, and further information will be announced in the future." However, the other party also emphasized, "Fosun Henlius is a high-quality innovative asset of Fosun Pharma."

According to the privatization announcement, as of June 24, Fosun Pharma held a total of 324 million shares of Fosun Henlius, accounting for 59.56% of the total share capital, through its subsidiaries Fosun New Drug, Fosun Pharmaceutical Industry, and Fosun Industry. Fosun New Drug plans to acquire and cancel all other shareholders' shares of Fosun Henlius using cash and/or stock. After the privatization transaction, Fosun Pharma will hold 100% equity of Fosun New Drug.

Among them, Fosun New Drug plans to use HKD 24.60 per H share to purchase and cancel no more than 131 million shares of Fosun Henlius' H shares, accounting for approximately 24.12% of the total share capital, and plans to use RMB 22.445 per non-listed share to purchase and cancel 88.7 million shares of Fosun Henlius' non-listed shares, accounting for approximately 16.32% of the total share capital. The total cash consideration does not exceed HKD 5.407 billion. Based on Fosun Henlius' stock price of HKD 18.84 per share before trading was suspended, the premium for this privatization acquisition exceeds 30%.

In order to promote the privatization process, Fosun New Drug plans to apply to China Merchants Bank for a merger and acquisition loan of up to HKD 3.7 billion, and Lustrous Star, another subsidiary of Fosun Pharma, plans to apply to China Merchants Bank for a bridge loan of up to HKD 3.2 billion to ensure the feasibility of outbound payments for this project. Fosun Pharma and several of its subsidiaries plan to provide guarantees for this.

Fosun Pharma employees told Science and Technology Innovation Board Daily reporters, "After the transaction is completed, it will help Fosun Henlius achieve sustainable growth and strengthen Fosun Pharma's strategic layout in innovative biological drugs."

As an innovative drug company, Fosun Henlius currently has multiple commercial products, including Toripalimab, Rituximab, Bevacizumab, Etanercept, and Deruxtecan. In 2023, Fosun Henlius achieved a total sales revenue of RMB 4.554 billion, a year-on-year increase of 70.2%, of which Toripalimab achieved total revenue of approximately RMB 2.737 billion worldwide and is the main source of revenue. Driven by this, Fosun Henlius achieved revenue of RMB 5.395 billion in 2023, a year-on-year increase of 67.8%, and a net profit of RMB 546 million for the first time since listing.

Currently, Henlius has multiple product indications that are in the process of being approved for listing, as well as pipelines for multiple products in different development stages from IND to clinical Phase III. Some believe that after completing privatization, Henlius will have a good synergistic effect on the layout of innovative products and pipelines.