Investors bet on rising demand from China's ageing population

[HONG KONG] Venus MedTech (HangZhou) Inc is adding fuel to a boom of health-care IPOs in Hong Kong, as investors bet on rising demand from China's ageing population.

The Chinese developer of cardiovascular devices began taking orders Tuesday, counting big names including Singapore's sovereign fund GIC Pte among its cornerstone investors. Venus is seeking as much as US$331 million from the sale, with an expected Dec 10 listing.

Health-care initial public offerings have raised US$4.4 billion in Hong Kong since January, setting a record for the first 11 months and marking an almost 30 per cent growth over the same period last year, according to data compiled by Bloomberg. Proceeds from Venus and drugmaker Alphamab Oncology, which started gauging investor demand last week for a listing in the city, could boost the full-year tally to a record US$5 billion. Alphamab may raise as much as US$300 million, according to IFR Asia.

Another Chinese drugmaker, Pharmaron Beijing Co, will start trading in Hong Kong on Thursday after raising US$589 million. The company priced shares at the top of a marketed range last week, with Oaktree Capital Management and OrbiMed Capital among cornerstone investors.

Health-care IPOs have rewarded investors with strong rallies in the city. The sector's 15 new stocks this year have jumped on average 35 per cent since their listings, adjusting for IPO sizes, data compiled by Bloomberg show. Vaccine developer CanSino Biologics Inc stands out, with a rally of more than 130 per cent from its offer price.

BLOOMBERG