China's Liaoning Cheng Da Co. Ltd.'s vaccine subsidiary, Liaoning Chengda Biotechnology CO.LTD., has canceled a plan to dual list in Hong Kong, the parent company said in a filing to the Shanghai Stock Exchange on July 31.
The subsidiary, listed on China's OTC market known as National Equities Exchange and Quotation, applied for a dual listing in Hong Kong in October 2018. However, it decided to scrap the plan due to "changes in market condition," the filing said.
Chengda Biotechnology, based in Dalian, primarily manufactures vaccines for rabies. Sales from rabies vaccines totaled about 1.29 billion yuan in 2018, accounting for 92.51% of total revenue, according to Chengda Biotechnology's annual report for that year.
China's vaccine industry has experienced a turbulent few years, especially after a series of scandals related to substandard vaccine production, which peaked in 2018 with Changsheng Bio-Technology Co. Ltd. Changsheng was later fined 9.11 billion Chinese yuan and delisted from the Shenzhen Stock Exchange.
In 2019, China announced its first vaccine law to tighten quality standards for manufacturing and distributing vaccines.
At least two other healthcare companies have delayed or cancelled plans to float on the Hong Kong Stock Exchange in the past few months. Qingdao Haier Biomedical Holdings Co. Ltd. canceled its Hong Kong IPO application in April and opted to list on Shanghai's new Star board, set up by the government to attract more high-tech listings.
Hutchison China MediTech Ltd. also in June put a hold on its Hong Kong IPO, the third listing after New York and London. The company was expected to list in Hong Kong in the third quarter of 2019.
Chi-Med CEO Christian Hogg also said in an earnings call in July that market conditions in Hong Kong looked "shaky" and that Chi-Med will bide its time as it decides on when to go public.
As of Aug. 2, US$1 was equivalent to about 6.94 Chinese yuan.