Chinese Pharma Group CSPC's Unit Proceeds With Hong Kong Offering

By Jason Chau

A unit of CSPC Pharmaceutical Group is moving ahead with a planned share listing in Hong Kong, securing approval from its board for the offering as China's biotech sector heats up.

CSPC Innovation, a non-wholly owned subsidiary of the group, plans to offer up to 10% of its issued share capital on the main board of the Hong Kong Stock Exchange.

China's biotech sector is on a bull run, experiencing what Allianz Global Investors analysts have called a "DeepSeek moment," referring to the Chinese artificial-intelligence startup's breakthrough earlier this year, which boosted confidence the country's AI abilities and sparked a market rally.

The Hang Seng Biotech Index, which tracks the 50 largest biotech companies listed in Hong Kong, has gained nearly 110% year to date, far outperforming the benchmark Hang Seng Index, which has risen almost 37%, HKEX data show.

Rising investor interest in the sector reflects significant progress in developing innovative drugs, Allianz Global Investors said in a note. Last year, China developed 1,250 innovative drugs, surpassing Europe and rapidly closing in on the U.S., it added.

CSPC Innovation, which is listed on the Shenzhen Stock Exchange, primarily focuses on biopharmaceuticals. It also produces functional food and raw materials, including caffeine food additives and vitamin C products.

After the offering, it will remain an indirect subsidiary of CSPC Pharma, which will retain an about 66% stake if the over-allotment option is exercised, exchange filings showed. The company has yet to announce pricing and timeline for the listing as it goes through the vetting process.

CSPC Innovation will use the Funds raised to enhance access to international capital markets. The proceeds will also go to advancing its finished drug business.

Morgan Stanley Research projects that drugs originating in China could account for 35% of approvals by the U.S. Food and Drug Administration by 2040, up from only 5% now. The sector's revenue could rise to an estimated $34 billion by 2030 and $220 billion by 2040.

Write to Jason Chau at jason.chau@wsj.com

(END) Dow Jones Newswires

October 01, 2025 00:18 ET (04:18 GMT)