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WuXi AppTec closes at issuance price in Hong Kong on 1st trading day

WuXi AppTec Co. Ltd.'s shares closed at their issuance price of HK$68 per share in Hong Kong on the first day of trading.

The Shanghai-based company set a price range of between HK$64.10 and HK$71.50 for the offering. It issued approximately 116 million shares for the listing on the main board in Hong Kong to receive net proceeds of about HK$7.55 billion, not including the overallotment option.

WuXi AppTec said it will use about 36.9% of the proceeds to expand its capacity worldwide, 26.5% to acquire other companies in the sector, and 19.9% to repay loans, according to the prospectus.

Kevin Xie, head of healthcare and life sciences at China Renaissance Group, which was one of the book runners on the Hong Kong listing, told S&P Global Market Intelligence that investors will need more time to learn about the company's business model.

WuXi AppTec, founded in 2000 by CEO Li Ge and three other partners, offers services from the early discovery stage to manufacturing to over 3,000 clients worldwide to help shorten discovery time and cut drug costs. The company has more than 17,000 employees.

Hong Kong is the third capital market that the company has tapped into. It first went public in New York in 2007 and was taken private in 2015 in a US$3.3 billion deal.

In May, WuXi AppTec made its way back to the market with a listing in Shanghai and raised about 2.25 billion yuan from the IPO to expand its research and manufacturing activities.

"We picked Hong Kong [for the dual listing] because it is a market that is close to both China and the international market," company board secretary Yao Chi said at a press event in Hong Kong.

Li and the other three founding members — his wife Zhao Ning, executive vice president Liu Xiaozhong and senior vice president of operations Zhang Zhaohui — together own about a 30.85% stake in WuXi AppTec. Zhao is also the head of corporate human resources of the company.

Morgan Stanley Asia, Huatai Financial and Goldman Sachs (Asia) are acting as joint sponsors for WuXi AppTec's IPO. China Renaissance, BOC International and CLSA are the joint book runners.

As of Dec. 12, US$1 was equivalent to about 6.88 Chinese yuan.