Fosun Pharma's $600 Million Hong Kong IPO: Is it a Steal?

by Richard Daverman, PhD

October 12, 2012 -- Fosun Pharmaceutical’s $600 million Hong Kong IPO is being marketed to potential investors as a value play, a way of investing in a large portfolio of China pharma companies at a discount. Here’s the pitch: Fosun owns 32% of China’s largest drug distributor, Sinopharm, a stake that is worth $2.6 billion. That equals 80% of Fosun’s total market capitalization – currently $3.3 billion. For a relatively small $600 million in value over and above the Sinopharm value, investors get Fosun’s drug production business and its stakes in a variety of China pharma companies. That, say the investment bankers, means investors are getting a discounted deal. More details....

Stock Symbols: (SHA 600196) (HK: 1099)