Chinese Drug Developer Joinn Falls 7.3% in Hong Kong Debut

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Shares in Chinese drug developer Joinn Laboratories dropped as much as 7.3% in its Hong Kong market debut Friday, despite heavy subscriptions by retail investors in its HK$6.5 billion ($844 million) listing.

Joinn’s Hong Kong shares fell to as low as HK$140, along with a slide in the broader market, after a spike in benchmark U.S. Treasury yields damped investor appetite for risk assets. The company, whose shares already trade in Shanghai, had priced its sale of its 43.3 million shares in Hong Kong at HK$151 each, the top of an indicative range.

The slump marks a rare setback for Asia’s health-care IPOs and new listings which have been lapped up by investors even as the broader industry suffers from sell-offs from institutional investors. The health-care sector is on track to underperform the region’s benchmark for a third straight month, with a gauge of the sector falling 3.5% compared with a 3.1% gain for the wider MSCI Asia Pacific Index this month.

Joinn’s listing drew a strong demand of 310 times the stock on offer from retail investors, prompting the Beijing-backed firm to raise its allocation to them. The Hong Kong retail tranche was raised to 15.6 million shares from 3.9 million shares. The institutional offer was 26 times oversubscribed.

SciClone Pharmaceuticals (Holdings) Limited, another Chinese health-care firm currently preparing to list, priced its $281 million offering at the top of its range on Thursday.

Joinn’s offering attracted ten cornerstone investors, who committed to $268 million of stock. CLSA was the sole sponsor of the IPO.

According to its prospectus, Joinn was founded in Beijing in 1995. It offers drug development, pharmaceutical analysis, pharmacological testing, and other related services, as well as pesticide and medical device safety evaluation services.

©2021 Bloomberg L.P.

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