Hengrui raises HKD9.8bn in HK’s largest pharma IPO in 5 years

Jiangsu Hengrui Pharmaceuticals debuted on the Hong Kong Stock Exchange today, raising HKD9.89 billion (USD1.26 billion), marking the largest healthcare IPO in Hong Kong in nearly five years. Cleary Gottlieb, Commerce & Finance Law Offices, Pillsbury, Herbert Smith Freehills and Jingtian & Gongcheng advised the parties involved in the listing.

The stock opened at HKD57 per share, 29.4% above the offer price. Proceeds will be allocated to R&D initiatives (75%), and construction of new production and R&D facilities in China and overseas markets, as well as expanding or upgrading existing facilities (15%).

Cleary Gottlieb partners Freeman Chan, Zhang Miao and Zhang Biyuan led the team providing advice on Hong Kong and US law for Hengrui Pharmaceuticals. Commerce & Finance partner Wang Bo spearheaded the Chinese legal advisory team for the issuer. Hengrui Pharmaceuticals also engaged Pillsbury as its “general regulatory consultant”.

Herbert Smith Freehills counselled the underwriters – Morgan Stanley, Citi and Huatai International – on Hong Kong and US laws. Partners Matt Emsley, Jeremy Shen, Kong Jin and Stanley Xie led the team. Jingtian & Gongcheng acted as Chinese legal counsel.

The listing continues the trend of A-share companies pursuing secondary listings in Hong Kong and attracted strong investor demand. The public offering was oversubscribed 450 times, with cornerstone investors coming on board, including Singapore’s GIC, Invesco, UBS Global Asset Management, Hillhouse Capital and Boyu Capital.

Since its debut on the Shanghai Stock Exchange’s Main Board in 2000, Hengrui has consistently invested in R&D, allocating RMB6.15 billion (USD853.7 million) in 2023 and RMB8.23 billion in 2024.

Robust financial performances support the leading Chinese pharmaceutical company’s investment. In 2024, Hengrui Pharmaceuticals reported RMB28 billion in total revenue, with compound annual growth of 14% since 2014. Gross profit rose from RMB19.3 billion in 2023 to RMB24.1 billion in 2024. The company maintained strong growth momentum in Q1 2025, with revenue reaching RMB7.21 billion, up 20.1% year-on-year.

Innovative drugs have become a major revenue driver for Hengrui, which is also a prominent player in the globalisation of China’s wave of innovative drugs. Its prospectus states that the company has initiated more than 20 overseas clinical trials in regions, including the US, Europe, Australia, Japan and South Korea, with its products commercialised in more than 40 countries.