Chinas Cathay Biotech Plans To Raise $799m In STAR Market

China’s Cathay Biotech Inc, a producer of chemical intermediates, is seeking to raise 5.6 billion yuan ($799 million) in an initial public offering (IPO) on Shanghai’s Nasdaq-style STAR Market, according to a company filing. 

The company, which kicked off the subscription exercise on August 3, proposes to sell up to 41.67 million common shares at a price of 133.45 yuan ($19) apiece. Its shares have been oversubscribed 4,466 times. 

It will use the proceeds to spruce up its polyamide project, develop a research centre and complement working capital. 

CITIC Group’s CITIC Securities serves as the lead underwriter for the deal. It will float the shares under the symbol “688065”.

Headquartered in Shanghai, Cathay Biotech is engaged in bio-based materials and solutions for industries. The company’s products cater to a slew of fields across nylons, fragrance, adhesives, bio-solvents and automobiles.

The company counts a string of global leading companies as top clients including DuPont, EMS-Grivory, Evonik Industries AG and Novo Nordisk, per its prospectus.  

It generated annual revenue of 1.9 billion yuan ($275 million) as of 2019, a jump of 159 million yuan ($23 million) from the previous year. Its net profit stood at 479 million yuan ($69 million), up 12.59 million yuan ($1.8 million) than that of 2018. 

State-owned Shanxi Kechuang City Investment Development is the second-largest shareholder in the company holding a 10.15 per cent stake. The majority shareholders include mining giant Lu’an Group (10.15%) and Swiss healthcare-focused investment firm HBM Healthcare Investments (7.9%). 

CMB International through its subsidiaries has a combined 3.66 per cent equity interest. CMB had tied up with Lu’an, Guojin Dingxing Investment making a strategic investment in Cathay Biotech in February 2019. 

Its early-stage investors also comprise China Reform Fund and GT&I Fund Management.