New Stock Announcement | Jiuyuan Gene (02566) will conduct a public offering from November 20th to November 25th, planning to globally issue 45.39 million H shares.

Jiuyuan Genetics (02566) will be listed from November 20, 2024 to November 25, 2024. The company plans to globally issue 45.3988 million H shares, with approximately 10% of the shares being publicly offered in Hong Kong, and approximately 90% offered internationally. The offer price will be between HK$11.48 and HK$12.56 per share. H shares are expected to start trading on the Stock Exchange of Hong Kong on November 28, 2024, at 9:00 am. H shares will be traded in units of 200 shares per lot. The Group has entered into cornerstone investment agreements with Hadafu Hong Kong, Fosun Industrial (a wholly owned subsidiary of Shanghai Fosun Pharmaceutical), Hong Kong JKY, ALI HEALTH Hong Kong (indirectly wholly owned by ALI HEALTH Information Technology Limited), Jointown International, Wu Qiyuan, Delta Capital HK (each and collectively referred to as cornerstone investors). The cornerstone investors have agreed to subscribe for or cause their specified entities (including qualified domestic institutions approved by Chinese authorities) to subscribe (as appropriate) for a total amount of approximately HK$350 million, excluding broker commissions, SFC trading fees, HKEX trading fees, and to purchase the number of shares available (rounded down to the closest unit of 200 shares per lot). Assuming the offer price is HK$12.02 per share, which is the midpoint of the price range set out in the prospectus, the total number of shares subscribed for by cornerstone investors will be 29.1174 million shares, representing approximately 64.14% of the shares offered globally, and approximately 11.87% of the total issued share capital of the company after the global offering is completed (assuming the over-allotment option is not exercised). Assuming an offer price of HK$12.02 per share (the mid-point of the price range set out in the prospectus) and after deducting underwriting fees, commissions, estimated expenses for the global offering, and assuming the over-allotment option is not exercised, the Group estimates that it will receive net proceeds of approximately HK$468 million from the global offering. The Group currently intends to use the net proceeds from the global offering for the following purposes: Approximately 40.0% of the net proceeds will be allocated to the ongoing research and development of selected pipeline products in the Group's key therapeutic areas. Of this amount, approximately 20.9% will be used to continue the research and development of selected metabolic disease pipeline products that are currently in the preclinical stage, in preparation for clinical trials or awaiting NDA approval. Approximately 9.1% will be used to continue the research and development of selected orthopedic pipeline products currently in the preclinical stage. Approximately 9.9% will be used for the ongoing research and development of selected oncology pipeline products currently in the preclinical stage or preparing to enter clinical trials; approximately 30.0% of the net proceeds will be used for the marketing and commercialization of the Group's existing and near-commercialized products. Of this amount, approximately 25.0% will be used to expand the Group's sales and marketing teams. Approximately 5.0% will be used to strengthen the marketing and development of the Group's marketed products; approximately 10.0% of the net proceeds will be used for seeking strategic collaborations; approximately 10.0% of the net proceeds will be used for the Group's manufacturing system, to build new production lines, and to upgrade and further automate the Group's existing production facilities; and the remaining approximately 10.0% of the net proceeds will be used to provide funds for the Group's working capital and other general corporate purposes. Established in 1993, the Group is a biopharmaceutical company in China with over 30 years of experience in research, development, production, and commercialization of biopharmaceuticals and medical devices. The Group focuses on four rapidly growing therapeutic areas: orthopedics, metabolic diseases, oncology, and hematology. According to data from ZO Consulting, these four therapeutic areas accounted for 51.5% of China's total drug sales in 2023, far outperforming the overall performance of the China Meheco Group industry from 2018 to 2023, with trends expected to continue in the near future. The Group's diversified portfolio of marketed products and active pharmaceutical ingredients has contributed to its stable financial performance during the reporting periods. For the years 2021, 2022, and 2023, and for the six months ended June 30, 2024, the Group's revenue was RMB 1.307 billion, RMB 1.125 billion, RMB 1.287 billion, and RMB 702 million respectively. For the years 2021, 2022, and 2023, and for the six months ended June 30, 2024, the Group's net profit was RMB 119 million, RMB 59.9 million, RMB 120 million, and RMB 105 million respectively. For the years 2021, 2022, and 2023, and for the six months ended June 30, 2024, the Group's gross margin was 72.7%, 75.9%, 77.0%, and 77.0%, and the net margin was 9.1%, 5.3%, 9.3%, and 15.0% respectively.