Since the beginning of this year, Hong Kong's innovative pharmaceutical sector has continued its remarkable "comeback" performance, accompanied by intensifying refinancing activities. In the first half of this year alone, the cumulative refinancing amount in the Hong Kong stock market reached HK$173.8 billion, representing a year-on-year growth of 227% and already exceeding the full-year scale of 2024. Within this trend, over 10 innovative pharmaceutical companies in Hong Kong's healthcare sector completed placement financing. This intensive capital replenishment not only reflects the R&D confidence of domestic innovative drug companies but also reveals their ambitions to target global markets and leverage differentiated innovation advantages.
As a pioneering pharmaceutical company holding blockbuster COVID-19 innovative drugs and multiple pipeline candidates with License-out potential, SIMCERE PHARMA (02096) has also chosen to conduct placement financing during this critical development period to further consolidate its advantages in the innovative drug sector.
**Optimizing Investor Structure and Enhancing Long-term Value**
On September 2, before Hong Kong market opening, SIMCERE PHARMA announced a placement financing deal, stating that the company plans to conduct a top-up placement of 121 million shares, raising approximately HK$1.553 billion net proceeds.
From the details of SIMCERE PHARMA's placement financing, the pricing and placement structure demonstrate the company's maturity and professionalism in capital market operations, representing a key balance between the company's financing needs and investor interests.
Regarding pricing benchmarks, the placement price of HK$12.95 represents approximately 8.03% discount to the closing price of HK$14.08 on the day before the placement agreement was signed (September 1, 2025), and approximately 6.67% discount to the average closing price of about HK$13.876 over the previous 5 trading days. This falls within the common 5%-10% discount range for additional stock issuances in the Hong Kong market, representing a reasonable level. This dual-layer price comparison mechanism considers both short-term market fluctuations and medium-term price trends, providing investors with a comprehensive value reference framework.
In terms of placement scale, SIMCERE PHARMA's issuance of 121 million new shares will represent approximately 4.66% of the total enlarged issued share capital, assuming no other changes to the company's share capital upon completion. This scale design satisfies the company's substantial financing needs while controlling dilution effects within a relatively reasonable range, reflecting management's consideration for shareholder interests.
Under the current backdrop of strong institutional investor demand for Hong Kong's innovative pharmaceutical sector, SIMCERE PHARMA's placement financing is expected not only to replenish development "ammunition" but also attract participation from numerous overseas top-tier long-term investors, sovereign wealth funds, and strategic investors. These types of investors typically have characteristics of long investment cycles and high stability, providing sustained and stable shareholder support for SIMCERE PHARMA. From a corporate governance perspective, introducing overseas long-term institutional investors helps optimize the company's shareholder structure, enhance the internationalization level of corporate governance, and lay the foundation for potential future overseas capital operations.
Notably, following the placement announcement, secondary market reactions showed dual characteristics of short-term volatility and long-term optimism. On one hand, SIMCERE PHARMA's stock price experienced some decline after opening on September 2, which represents normal market behavior reflecting dilution effects and market sentiment reactions to additional stock issuance. On the other hand, SIMCERE PHARMA's trading volume exceeded 180 million shares that day, setting a new single-day trading volume record since listing, demonstrating strong secondary market demand for the company's positioning and recognition of its long-term value.
**Accelerating Differentiated Innovation with Further Validation of Biopharma Value Expected**
In recent years, SIMCERE PHARMA has achieved rapid transformation, becoming a domestic innovative pharmaceutical company with innovation capabilities, global clinical value provision, and leading pipeline advancement speed. The results of its transformation from generics to innovation are already evident.
According to the latest disclosed 2025 interim results, during the reporting period, SIMCERE PHARMA's revenue grew 15.1% year-on-year to HK$3.585 billion, with adjusted net profit of HK$651 million, up 21.1% year-on-year, exceeding market expectations. This was primarily driven by its innovative drug business. The company currently has ten marketed innovative drugs, with innovative drug revenue of HK$2.776 billion during the period, growing 26% year-on-year and accounting for over three-quarters of total revenue at 77.4% for the first time.
In the first half of this year, SIMCERE PHARMA had 2 innovative drugs approved for market, 2 candidate drugs entering NDA review stage, and 2 self-developed clinical-stage products achieving innovative overseas licensing, demonstrating impressive innovation transformation results. During the period, the company also reached multiple strategic collaborations with international pharmaceutical companies including AbbVie (ABBV.US), NextCure (NXTC.US), and Idorsia, making progress in ADC, trispecific antibodies, and central nervous system drug development, with several blockbuster varieties' global R&D and overseas clinical progress advancing to critical stages.
It's worth noting that approximately 90% of SIMCERE PHARMA's placement financing proceeds will be used for R&D-related expenses. With innovative drugs now serving as a key growth engine, SIMCERE PHARMA's placement financing to reserve more "ammunition" for continued focus on core areas including neurology, oncology, autoimmune, and anti-infection, further expanding the global layout of its innovation pipeline, will help the company "spend money where it matters most," further validating its Biopharma value and bringing greater returns to investors in the secondary market.