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Chinese pharmaceuticals sales platform YSB Inc is seeking to raise HK$332 million (US$42.4 million) in an initial public offering in Hong Kong, down almost sixfold from early reports of its target amid weak market sentiment.
YSB plans to offer a total of 15 million shares at a maximum price of HK$23, helping to raise as much as HK$332 million from the global offering, with net proceeds of HK$253.6 million, according to its prospectus. The Tiger Global Management-backed company expects its shares to begin trading on June 28.
Originally YSB hoped to raise as much as US$300 million, according to earlier media reports citing sources close to the company. However, at a media briefing on Wednesday, executive director and CFO Fei Chen said the fund-raising size was "in line with expectations" and that the company's operations have been very solid.
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"Market conditions in Hong Kong and in general are always volatile and unpredictable, we are confident in the fundamentals of our company and choose to open up to the public to invest in us too," said Chen.
Funds from the offering will mainly be used to develop the pharmaceuticals circulation business, for platform development and research and development, the company said. ZGC International is a cornerstone investor, agreeing to buy as much as HK$100.3 million in shares. CICC is the sole sponsor of the IPO.
The Guangzhou-based company has raised funds in multiple rounds since it was founded in 2015, with investors including Chinese search and AI giant Baidu, DCM Ventures, H Capital, Green Pine Capital Partners, and Shanghai Fosun Pharmaceutical Group.
Unlike consumer-facing pharma platforms such as Ali Health and JD Health, YSB mainly serves pharmacies and community-based medical institutions under its business-to-business model.
Hong Kong's new-listings market has struggled amid a waning rebound in China's economy. The city has seen 30 IPOs year to date, a modest increase of 11 per cent compared to the first half of 2022. But funds raised have dropped 14 per cent to HK$17 billion compared with HK$19.7 billion in 2022's first half, according to the latest report by PwC Hong Kong.
Investor sentiment has been affected by rising interest rates, said Benson Wong at PwC Hong Kong.
On the horizon, High Tide Therapeutics and artificial-intelligence and electronics company Mobvoi are planning Hong Kong share listings that could boost the city's IPO fundraising total for the year by up to US$500 million.