Chipscreen Biosciences Trading at 1,270 Times Earnings on Star Market
Innovative drugmaker's stock soared on the first day of trading in Shanghai, the firm's market capitalization leaped to CNY 39.08 billion (USD 5.53 billion).
Chipscreen Biosciences Co., Ltd. (微芯生物, 688321:SH) made a stellar debut on the new sci-tech board in Shanghai today. The share price jumped 366.52% from the opening CNY 20.43 (USD 2.89) to CNY 95.31 (USD 13.49) by the end of the afternoon trading session. The stock's P/E ratio, accordingly, climbed to 1,270.93 (trailing twelve months) or 1,110.97 (last year record).
Shenzhen-based Chipscreen's development history could be traced back almost two decades. Founded in 2001, it has raised venture capital from a handful of well-known investors including LYZZ Capital and Vertex Ventures, which led the last round of financing through which the pharma company raised USD 7.7 million in 2015.
It filed for an IPO on the Star Market on March 27 this year. It took the bourse less than 4 months to approve the listing. Now Chipscreen is the only therapeutics company among the 28 stocks traded at the fresh venue.
With only 371 employees, 104 of which are directly involved in R&D activity, the biotech startup is among the smallest enterprises listed at the fresh venue. Its total operating income was about CNY 147 million (USD 21 million) in 2018. With a margin of over 21% in the same year, the company earned more than CNY 31 million (USD 4.4 million) in net profit.
According to Statista, China's pharmaceutical products market size amounted to USD 124 billion in 2016. It is expected to reach USD 574 billion by 2022. Health-care information company IQVIA projected the market to be worth USD 122.6 billion in 2017. With its huge scale and aging population, China remains attractive for biotech companies from all around the globe.