China biotech player sets US$300m IPO in motion

Business | Agencies and Avery Chen 7 Apr 2020

Chinese biotech company Akeso kicked off pre-marketing of its Hong Kong initial public offering that could raise up to US$300 million (HK$2.34 billion) yesterday.

The company is planning to launch its IPO this month. JPMorgan Chase and Morgan Stanley are sponsors of the deal. The New York legal firm Davis Polk & Wardwell has been hired to carry out the legal work on the deal.

Akeso refiled its IPO application in early February after being rejected by the Hong Kong stock exchange for not meeting regulatory requirements.

Akeso, a clinical-stage biotech company based in Guangdong that specializes in oncology and immunology, saw net loss extended by 1.24 times to 346.45 million yuan last year (HK$378.63 million).

Meanwhile, Credit Suisse Group has dropped out off WeDoctor's planned Hong Kong IPO.

The exit comes at a difficult time for the Swiss bank, which was last week hit with a shareholder suit alleging that Luckin Coffee and several underwriters made false and misleading statements that caused its stock price to be inflated. Credit Suisse was among the coffee chain's IPO underwriters named in the complaint.

Credit Suisse was picked alongside JPMorgan Chase and CMB International to lead WeDoctor's share sale, which was expected to happen before the end of the year.

WeDoctor, one of China's biggest online health-care startups backed by Tencent (0700), aims to raise between US$500 million and US$1 billion.

Separately, Megvii Technology's revenue growth dissipated in the second half of 2019 after it joined Huawei Technologies on a US trade blacklist, underscoring the extent to which White House sanctions are hurting China's technology leaders.

The company, backed by Alibaba Group (9988), grew revenue a mere 2.7 percent in 2019's second half after more than tripling sales in the first six months of the year, according to unaudited numbers for investors seen by Bloomberg.

On a full-year basis, Megvii fell short of its target for 2.9 billion yuan in sales by almost 28 percent, a person familiar with the matter said. Megvii plans to refile for a Hong Kong IPO that could raise between US$500 million and US$1 billion after its previous application lapsed in February.

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