Hong Kong's stock market may soon welcome a new vaccine-focused listed company.
On the evening of January 22, Fosun Pharma (600196.SH; 02196.HK) announced its intention to spin off its subsidiary, Fosun Aternus, for a listing on the main board of the Hong Kong Stock Exchange. Following the spin-off, the equity structure of Fosun Pharma is not expected to undergo significant changes, and it is anticipated that Fosun Pharma will retain control over Fosun Aternus.
The announcement indicated that Fosun Aternus will complete the issuance and listing at an appropriate time and within a suitable issuance window during the effective period of its shareholders' meeting resolution. The specific timing of the issuance will be determined by the board of directors, or persons authorized by the board, as empowered by the shareholders' meeting, based on capital market conditions, the progress of regulatory approvals and filings, and other relevant circumstances.
On January 23, Fosun Pharma's A-shares rose by as much as 1.7% intraday, while its H-shares climbed over 3%.
In the Hong Kong market, domestic vaccine companies such as CanSino Biologics (06185.HK), AIM Vaccine (06660.HK), and Zhonghui Biological (02627.HK) have already gone public. The A-share market, meanwhile, includes established vaccine players like Zhifei Biological (300122), Hualan Biological (002007), and Walvax Biotechnology (300142). In recent years, vaccine companies have faced significant performance pressure, with star products like HPV vaccines and influenza vaccines becoming embroiled in "price wars." A research report from Xiangcai Securities on January 18 suggested that short-term challenges persist from an earnings perspective, as evidenced by the projected losses for Zhifei Biological and Baike Biological in 2025, highlighting the substantial impact of weak demand and fierce competition on the vaccine industry. Overall, the industry is expected to continue developing under the dual pressures of long-term innovation investment and short-term market challenges, presenting a landscape of competing for existing market share while pursuing incremental innovation, which may further accentuate the characteristics of a structural adjustment period for the sector.
Regarding the spin-off, Fosun Pharma stated that Fosun Aternus will achieve an independent listing, leveraging the Hong Kong capital market to broaden its financing channels, strengthen its capital base, and improve its incentive mechanisms, which will help it continuously enhance its comprehensive competitiveness, brand recognition, and market influence in the vaccine field. After the spin-off, Fosun High Technology will remain the controlling shareholder of Fosun Pharma, and Mr. Guo Guangchang will continue to be the actual controller of Fosun Pharma.
Fosun Pharma also mentioned that following the completion of this spin-off, the company's share of Fosun Aternus's net profit (or loss) attributable to equity holders may decrease in the short term. However, from a medium- to long-term perspective, Fosun Aternus's financing capacity is expected to be strengthened, its operational scale, production, and R&D capabilities are projected to grow rapidly, and its overall competitiveness, brand recognition, and market influence are anticipated to continuously improve, thereby contributing to enhancing the future overall profitability of the Fosun Pharma Group and promoting long-term value appreciation.
Fosun Pharma's directly operated businesses include pharmaceuticals, medical devices, medical diagnostics, and healthcare services, and it covers the pharmaceutical commerce sector through its equity investment in Sinopharm Holding. Among these, the pharmaceutical business is the core, encompassing innovative drugs, mature products and manufacturing, and vaccines.
Fosun Aternus was established in 2012. Fosun Pharma's wholly-owned subsidiary, Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd., is its controlling shareholder, directly holding 70.08% of its equity. Guo Guangchang is the actual controller of Fosun Aternus.
Currently, Fosun Aternus has 2 branch offices and 2 subsidiaries. Its business focuses on the R&D, production, and sales of vaccines based on technology platforms for attenuated/inactivated vaccines, polysaccharide/conjugate vaccines, and recombinant proteins. The company's marketed products in China include Human Rabies Vaccine (Vero Cell), Freeze-dried Human Rabies Vaccine (Vero Cell), Trivalent Influenza Virus Split Vaccine, and Quadrivalent Influenza Virus Split Vaccine. Its main pipeline under development includes a 13-valent Pneumococcal Conjugate Vaccine, a 24-valent Pneumococcal Conjugate Vaccine, and a Freeze-dried Human Rabies Vaccine (Human Diploid Cell), among others.
According to management accounts, from 2022 to 2024, Fosun Aternus's operating revenue was 461 million yuan, 341 million yuan, and 97.4233 million yuan, respectively. Its net profit attributable to the parent company's owners was 86.6367 million yuan, 11.3517 million yuan, and -123 million yuan, respectively. Its adjusted net profit attributable to the parent company's owners (excluding non-recurring gains and losses) was 71.9706 million yuan, 12.4279 million yuan, and -125 million yuan, respectively.
Regarding the reasons for the 2024 performance change, Fosun Pharma mentioned that the significant decrease in revenue was primarily affected by the product transition at Fosun Yalifeng; the operating loss in the same year was mainly due to increased R&D investment. If Fosun Aternus continues to incur long-term losses or experiences a performance decline in the future, it may face going concern risks.
Regarding the issuance scale for Fosun Aternus, the announcement stated that the initial offering size would be up to 25% of the total share capital after the enlargement resulting from the offering (before any over-allotment option is exercised), with an over-allotment option granted to the global coordinator(s)/bookrunner(s) of up to 15% of the initial offering size. The final issuance ratio and number of shares will be determined by the board of directors, or persons authorized by the board, as empowered by the Fosun Aternus shareholders' meeting, based on legal requirements, regulatory approvals or filings, and market conditions.
Regarding the pricing method, Fosun Pharma stated that the offering price will be determined through consultation between the board of directors, or persons authorized by the board, as empowered by the Fosun Aternus shareholders' meeting, and the lead underwriter(s), taking full account of the interests of Fosun Aternus's existing shareholders, investor acceptance capacity, and issuance risks, following international practices, and considering the capital market conditions at the time of issuance, the general valuation level of the industry in which Fosun Aternus operates, and market subscription interest, based on the results of the roadshow and bookbuilding.
The announcement cautioned that there is uncertainty as to whether this spin-off will obtain the aforementioned approvals or consents, and the timing of ultimately obtaining relevant approvals or consents is also uncertain. The company will comply with relevant laws and regulations, actively and prudently advance related matters, and continue to fulfill corresponding information disclosure obligations.
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