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A technician works at a manufacturing facility of Chinese vaccine maker CanSino Biologics in Tianjin, China. Photo: Reuters/China Out

CanSino, China’s first drug maker to start human trials for Covid-19 vaccine, soars in Star Market trading debut

  • Pharmaceutical giant is first Chinese company to test a Covid-19 vaccine on humans
  • Will use funds to build manufacturing base, grow Covid-19 vaccine research

CanSino Biologics, the first Chinese company to test a Covid-19 vaccine on humans, got off to a roaring start on the mainland’s Star Market.

The Tianjin-based pharmaceutical producer soared nearly 88 per cent on Thursday to 391.11 yuan from its offering price, though that was less than the expectation of an at least 200 per cent gain.

“The first-day gain turned out to be smaller than traders expected because of worries about frothy valuations on the overall A-share market,” said Ivan Li, a money manager at Shanghai-based Loyal Wealth Management. “But investors still have confidence in the stock and its vaccines in the pipeline.”

CanSino’s H shares in Hong Kong shed 4.3 per cent to HK$198.8, which represented a 55 per cent discount to the mainland-listed counterparts.

CanSino raised 5.2 billion yuan (US$750 million) by floating 24.8 million shares, making it the second most expensive initial public offering on the mainland, trailing only Beijing Roborock Technology, a robot cleaner maker that began trading on the Star Market in February. Roborock sold its IPO shares at 271.12 yuan apiece.

CanSino’s 4.56 million shares allocated to public investors in an online subscription were nearly 3,000 times oversubscribed.

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“The strong first-day performance reflected enthusiasm among mainland equity investors in the promising vaccine developer,” said Zhou Ling, a fund manager with Shanghai Shiva Investment. “It was not a surprise since nearly all companies chalk up stellar gains on the first day of trading.”

Shares are expected to soar on the first day of trading on the Star Market, which, unlike other Chinese trading boards, has no limit on how much they can rise or fall in the first week of trading, making them especially profitable bets. The average first-day gain on the Star Market is 167 per cent, according to data provider jrj.com.

Yu Xuefeng, chairman and chief executive of CanSino said fundraising on the Star Market and the Hong Kong stock exchange provided the biopharmaceutical company substantial support as it needs capital to increase long-term, large-scale investments for research and development of vaccine candidates.

“The listings allow companies to have branding benefits and make global strategic plans,” he said in a statement after the Shanghai trading debut. “We will continue being committed to making the innovative and affordable high-quality vaccines accessible to people and contributing to the improvement of public health worldwide.”

CanSino is co-developing a Covid-19 vaccine, Ad5-nCov, with a research unit of the Chinese military.

A phase three trial for the vaccine candidate is expected to start soon.

Last month, CanSino said the results of the phase two trial, which was tested on 508 healthy adults, were positive.

CanSino, established in 2009, had been unprofitable for the past three years.

CanSino’s 2019 loss widened 13.3 per cent to 156.8 million yuan, according to its prospectus.

The vaccine developer said it will use the proceeds to build a manufacturing base, fund the research on vaccines, build cold-storage logistic and information technology systems and replenish working capital.

Cansino’s losses will probably narrow to 100.7 million yuan this year, based on Bloomberg’s average estimate of five analysts.

Beijing launched the Star Market in July 2019 to support the country’s own technology firms in the fields such as chip making, biotech and robotics.

The market, ordered into existence by Chinese President Xi Jinping, is part of Beijing’s efforts to stay ahead in the technology race as the US steps up efforts to curb China's ascendancy in the sector, leading to a long-running battle covering trade, intellectual property and national security.

On July 16, Semiconductor Manufacturing International Corporation (SMIC), China's biggest chip maker, surged 246 per cent during its debut on the Star Market.

This article appeared in the South China Morning Post print edition as: Vaccine firm CanSino soars in tech board debut
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