In August 2026, Sichuan Biokin Pharmaceutical Co.,Ltd. (688506.SH) submitted a new prospectus to the Hong Kong Stock Exchange, reigniting its journey toward a Hong Kong IPO. Beyond its promising new drug pipeline, the company's latest attempt features a complete overhaul of its underwriting team. The previous syndicate of joint sponsors—Goldman Sachs, JPMorgan, and CITIC Securities—has been reduced to just CITIC, replaced by Jefferies, CICC, and Deutsche Bank.
The collective departure of top-tier foreign investment banks is no coincidence. A more pressing question arises: Why would a fundamentally sound, market-cap leader with a globally leading ADC pipeline and a profitable traditional business base fail to reach an agreement with the most prestigious Wall Street banks?
Technical moat and dual-engine profitability: The foundation of a 100-billion market cap
To understand the shift in the underwriting syndicate, one must first grasp the nature of Sichuan Biokin Pharmaceutical Co.,Ltd. This company is not a typical cash-burning biotech start-up. Instead, it operates a "dual-engine" model, balancing its innovative drug business with a stable, revenue-generating generics business.
The company's core technological strength lies in its products, Yizaikang and T-Bren. Yizaikang is the world's first and only approved EGFR×HER3 bispecific ADC, with indications for nasopharyngeal cancer and esophageal squamous cell carcinoma both approved in 2026. Leveraging its proprietary technology platform, the company has 15 innovative drugs in clinical stages, with five undergoing international clinical trials, showcasing a well-developed global pipeline.
Financially, the company saw a surge in revenue and profit in 2024 due to a large overseas licensing fee. In 2025, with one-time gains fading, revenue returned to normal operational levels. The company's generics drug business provides a steady cash flow, funding its high R&D spending. In 2025, R&D expenditure was 2.51 billion yuan, and 690 million yuan in Q1 2026. As of March 2026, the company held 2.93 billion yuan in cash, sufficient to support its pipeline development.
The market's valuation of the company at over 100 billion yuan is supported by the scarcity and commercial value of Yizaikang as a first-in-class bispecific ADC, its potential across multiple tumor types, and the expansion possibilities from overseas licensing. The stable cash flow from its traditional generics business acts as a significant valuation safety net, cushioning the uncertainties of innovative drug development and commercialization.
A good company paired with a top-tier investment bank seems like a natural fit. Yet, the fact that this "good company + good bank" configuration ended with the departure of foreign banks suggests the problem is not about the company's quality, but rather a fundamental and irreconcilable disagreement over the "how to issue."
The underwriting syndicate overhaul: Why did Goldman Sachs and JPMorgan leave?
The scale of change in the IPO sponsor lineup is unusual for a large Hong Kong project in recent years. Previously, the joint sponsors were Goldman Sachs, JPMorgan, and CITIC. Notably, Goldman Sachs and CITIC had also jointly participated in the company's A-share private placement in September 2026. However, in the latest prospectus, only CITIC remains, with the new joint sponsors being Jefferies, Deutsche Bank, and CICC.
The disparity in capability between the old and new foreign banks is significant. Goldman Sachs and JPMorgan are global giants with vast networks of long-only international institutional investors and specialized healthcare funds, possessing top-tier underwriting power in Hong Kong. In contrast, Jefferies is a niche player in the innovative drug sector, and Deutsche Bank is a second-tier foreign bank for Hong Kong IPOs. Together, they lack the ability to mobilize global institutional capital that Goldman Sachs and JPMorgan command for large-scale Hong Kong listings.
The exit of top foreign banks from IPO projects is not without precedent. Companies like SenseTime and 4Paradigm have experienced similar situations, but those cases were often linked to geopolitical factors. For Sichuan Biokin Pharmaceutical Co.,Ltd., the reason is more likely a pricing disagreement. Top-tier investment banks like Goldman Sachs and JPMorgan have clear red lines for market-based IPO pricing. They will not compromise their reputation or damage market integrity just to push a deal through. When an issuer's pricing strategy is severely misaligned with market demand, these banks opt to exit rather than concede.
Behind the syndicate split: Three core issues weighing on the Hong Kong IPO
Reviewing the aborted IPO in November 2025, industry insiders reveal that there were internal disagreements within the investment bank group before the launch. Some banks believed the company's 100-billion-yuan market cap could secure enough international orders. Others explicitly opposed launching the book-building at very low discounts. The company favored a more optimistic pricing view, leading to terms that did not meet market expectations, and the offering ultimately failed.
Three core issues were interconnected, creating a chain of contradictions:
First issue: The IPO discount was too low, ignoring market conditions. The pricing range for the Hong Kong IPO was 347.5-389 Hong Kong dollars, representing a discount of only 1.8% to 12.2% relative to the A-share closing price of 360.85 yuan on the pricing date. Looking at large-cap A+H listings from 2025-2026, over 70% involved a discount of 20% to 50%. While a few companies with 100-billion-yuan market caps achieved discounts below 20%, the discount for Sichuan Biokin Pharmaceutical Co.,Ltd. was even lower. The upper end of its pricing range corresponded to a discount narrower than that of a mega-cap like CATL, even though the company's market cap is far smaller. Using a mega-cap discount standard for a regular large-cap company failed to compensate for Hong Kong's liquidity disadvantage, offering limited safety margin for Hong Kong investors and pricing the deal out of line with market reality.
Second issue: Weak cornerstone investors and no greenshoe, lacking downside protection. In the previous attempt, cornerstone subscriptions accounted for only 7.4% to 8.3% of the total, with a total subscription amount of about 32 million US dollars. Participating institutions included Bristol-Myers Squibb (15 million USD), OrbiMed (5 million USD), GL Capital (5 million USD), and Fullgoal Fund (2 million USD). This ratio is far below the typical 30% to 50% cornerstone subscription level for A+H projects. Furthermore, the company chose not to include a greenshoe option. While forgoing a greenshoe allows the stock to be eligible for the Stock Connect program on its first trading day, enabling Southbound capital to potentially provide some market stabilization, this choice, combined with already weak cornerstone subscriptions, left the stock's aftermarket performance entirely to secondary market forces without any active price support mechanism.
Third issue: The short interval between the A-share placement and the Hong Kong IPO created a pricing mismatch that discouraged institutions. With only about two months between the A-share private placement (September 2025) and the launch of the Hong Kong IPO (November 2025), this timing created multiple negative effects.
First, the short interval between two financing rounds meant some institutional demand was already consumed. While many A+H companies had not been able to raise equity in the A-share market and indeed needed to expand their equity financing channels, some institutional investors had already built their positions through the A-share placement, significantly reducing the need for additional Hong Kong investment and compressing the size of institutional orders for the Hong Kong offer.
Second, the Hong Kong IPO pricing was unappealing compared to the A-share placement. The September 2025 A-share placement was priced at 317 yuan, a 17.5% discount to the closing price of 362.2 yuan on the placement date. Just two months later, during the Hong Kong IPO, the A-share price was still around 360 yuan, with no significant change in market cap. In contrast, the maximum discount for the Hong Kong tranche was only 12.2%, which was not only a smaller discount than the A-share placement but also meant the overall price level of the Hong Kong offer was higher than the A-share placement price. The A-share price was set through a market-based bidding process by institutions, reflecting their fair value. The Hong Kong offer range, however, was set by the company and did not reference the valuation level previously agreed upon by institutional investors. For global long-only investment funds, participating in the A-share placement offered a 17.5% safety margin. The Hong Kong offer, with a smaller discount and weaker secondary market liquidity, presented significantly less value for subscription.
This restart: The window has changed, but has the "pricing obsession"?
The eventual expiration of the previous Hong Kong IPO approval had already revealed the irreconcilable difference. The company received approval from the China Securities Regulatory Commission on December 11, 2024, with a one-year validity period. If the company had been willing to lower its discount and align with market institutions' valuation expectations, it could have proceeded with the listing with its original underwriting team within that timeframe. However, the complete replacement of foreign banks suggests that the disagreement over the issue discount and structure was never resolved. The company's unwillingness to compromise on its pricing demands ultimately led to the old approval being allowed to lapse, forcing it to submit new listing documents, change the entire underwriting team, and restart the entire regulatory review process.
In the short term, this restart has some fundamental support. The company's drug pipeline achieved several clinical breakthroughs in 2026, with new indications for iza-bren and steady progress for T-Bren, improving its business fundamentals. Combined with its need for global financing, a Hong Kong listing remains a key part of its strategic plan. However, the current issuance environment is significantly tighter than last year, with more pronounced headwinds. Since Q4 2025, the innovative drug sector has been in a correction cycle. Even with a recent modest recovery, the company's A-share price has fallen sharply. The latest closing price of 306.72 yuan represents a decline of over 15% from the 360.85 yuan price on the day of the previous Hong Kong IPO pricing. In the current market environment, the pricing center is inevitably lower than before.
Furthermore, the supply of A+H listing projects has continued to increase in 2026, and the average issuance discount across the market has generally widened further. The ultra-low discount range of 1.8% to 12.2% for Sichuan Biokin Pharmaceutical Co.,Ltd. last year would be even harder to gain acceptance from global institutional investors in today's market.
Medium to long-term hidden concerns are also considerable. The new foreign sponsor institutions, Jefferies and Deutsche Bank, have less influence in global capital markets, less experience with large Hong Kong IPOs, and a narrower coverage of global healthcare institutional funds compared to Goldman Sachs and JPMorgan. If the company remains steadfast in its previous pricing approach, even if the IPO is successfully completed this time, the market-based nature of the issuance will be weakened, likely creating sustained downward pressure on the stock price.
Conclusion
The difficulty of Sichuan Biokin Pharmaceutical Co.,Ltd.'s Hong Kong IPO is essentially a conflict between "expectations and reality." The company holds a world-leading ADC pipeline, operates a dual-engine model of traditional and innovative businesses, has solid fundamentals, and justifies a 100-billion-yuan market cap. Yet, it is precisely this "good company" that saw its partnership with the most prestigious Wall Street banks collapse over pricing disagreements—a fact that speaks volumes more than the question of the company's quality. With Goldman Sachs and JPMorgan choosing to exit, the market will be watching to see if the new underwriting team can find a viable path to issuance. The more important question is: Having learned from the previous failure, is the company now prepared to make a more appropriate choice between the "ideal issue price" and the "realistic market demand"?