In this briefing:
1. Hansoh Pharma IPO Preview: A Decent Story Tarnished by a Huge Pre-IPO Dividend
Hansoh Pharmaceutical (HANSOH HK) claims to be one of the few R&D driven Chinese pharmaceutical companies. According to press reports, Hansoh aims to launch its Hong Kong IPO to raise $1 billion this month. Over the track record period, Hansoh’s financial performance shows accelerating revenue growth, relatively stable margins and solid cash generation.
Hansoh has the elements of a decent growth story, but our optimism is tempered due to mixed prospects for its drugs. Also, the huge pre-IPO dividend of RMB4.0 billion ($0.6 billion) will likely raise questions on the timing and size of the IPO.
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