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Independent Singapore
2 days ago
- Business
- Independent Singapore
Hong Kong's China Medical System Holdings plans SGX secondary listing
SINGAPORE: Hong Kong-listed China Medical System Holdings (CMS) plans a secondary listing on the Mainboard of the Singapore Exchange (SGX), with shares set to trade in July 2025. This is part of its regional expansion strategy to tap investors in the city-state and expand in Southeast Asia's fast-growing healthcare market. The secondary listing is expected to raise its profile and tap a pool of sophisticated healthcare and life sciences investors. The firm has already secured a letter of eligibility from the Singapore bourse. China Medical System is part of the Hang Seng Large-Mid Cap (Investable) Index. Since 2023, it's also been part of the Hang Seng Innovative Drug Index. This is due to its evolving focus on cutting-edge therapies. The last two years have been challenging for the company due to the impact of Beijing's stand on volume-based procurement (VBP) policy. Designed to reduce the cost of drugs and medical devices, the VBP scheme has driven steep price competition, affecting firms with more traditional product lines. This led CMS to transition to an innovation-led business model that focuses on high-value, clinically driven products. According to company reports, it's in gradual recovery from the effects of VBP. It predicts renewed growth momentum, with a pipeline of approximately 40 innovative projects as of the end of 2024. With a regional population close to 700 million, Southeast Asia's growing demand for medicine is fuelled by a mix of factors. This includes a growing regional middle class, the spread of lifestyle diseases, and ageing demographics in countries like Singapore and Thailand. CMS will tap this market through two entities. The first is Singapore-based Rxilient Health, a regional unit focused on global licensing and commercialisation of pharmaceuticals. The second is CMS's associated firm, PharmaGend Global, which has acquired a Singapore-based contract development and manufacturing organisation (CDMO). This facility spans over 60,000 square metres and can produce up to 1 billion tablets and capsules annually. Rxilient Health has operations in Malaysia, Vietnam, Indonesia, the Philippines, and Thailand. This will enable market localisation, while commercial production in Singapore, which began at the end of 2024, will enable supply to regional customers. The Singapore facility has received a Good Manufacturing Practice certification from the US Food and Drug Administration (FDA) and passed inspections by Singapore's Health Sciences Authority (HSA). FY2024 saw China Medical System face significant financial challenges. Its earnings dropped by 32.5% compared to the previous year, falling to RMB 1.62 billion (~US$288 million or S$367 million). This also saw a decline in gross profit (11.2%) as well as net profit (32.3%). The company is banking on its investments in innovation and overseas market expansion to drive future recovery and growth. The timing of the secondary listing comes amid strong momentum on the Singapore bourse. SGX shares rose 7.2% last week, hitting a five-year high of S$14.72 on Jun 27. The Straits Times Index (STI) closed the week at 3,966.20, up 0.7%. Investors appear to be leaning on Singapore's stability as global concerns over inflation, oil prices, and tariffs continue. Trading activity has picked up noticeably, especially in the small and mid-cap segments.
Business Times
5 days ago
- Business
- Business Times
Hong Kong-listed China Medical System seeks secondary listing on SGX
[SINGAPORE] Hong Kong-listed China Medical System (CMS) is seeking a secondary listing on the mainboard of the Singapore Exchange (SGX) in July this year. CMS is a specialty pharma with a focus on sales and marketing in China, with capabilities across the full lifecycle of drug development, from identifying clinical needs to research and development (R&D) regulatory approval, and commercialisation. It has been listed on the Stock Exchange of Hong Kong since 2010. The pharmaceutical company expects the secondary listing will help it deepen its presence in South-east Asia and 'tap into a new and sophisticated investor base in Singapore'. CMS said it is looking to replicate its success in South-east Asia – building on the proven track record attained in China's pharmaceutical industry. 'This region, with a population of nearly 700 million, is experiencing surging pharmaceutical demand due to rapid economic growth, the rise of the middle class, ageing population, and the increasing burden of non-infectious diseases,' it said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Its financial performance in 2023 and 2024 were hit by China's volume-based procurement (VBP) policy – three of its products were included in the VBP list. This policy aims to lower the prices of drugs with generic competition, by guaranteeing certain procurement volumes from public hospitals at significantly reduced prices through a bidding process. But CMS had a top-line rebound in H2 2024, driven by progress in commercialising innovative drugs and the continued growth of non-VBP exclusive products. The company moved towards innovative drugs, given that they typically enjoy a pricing advantage due to their exclusiveness, novelty and quality, and are supported by favourable government policies. It expects growth momentum will accelerate on the back of the replenishment of its pipeline of innovative drugs to about 40 products as at Dec 31, 2024. It noted four key platforms to scale its pharmaceutical ecosystem across Asia-Pacific. CMS R&D is involved in drug discovery and development targeting global markets, while PharmaGend is a development and manufacturing platform for regional manufacturing and supply. It also has Rxilient Health, a Singapore-headquartered entity focused on registration and commercialisation in South-east Asia and a Singapore venture arm, which makes strategic investments to support regional pharma innovation. In a statement on Jun 24, CMS said the proposed listing will not involve issuance of new shares, and the shares will continue to be primarily listed and traded on the Hong Kong Stock Exchange thereafter. Singapore is its regional headquarters for its South-east Asia and Middle East business, the company said. The announcement follows the news of several new listings on SGX – software services provider Info-Tech Systems, a data centre real estate investment trust (Reit) by Japanese telco Nippon Telegraph and Telephone (NTT), and a spin-off of mainboard-listed construction company Lum Chang Holdings' interior fit-out business. Info-Tech Systems, whose shares are expected to begin trading on Jul 4, is the first SGX mainboard listing in two years. NTT DC Reit, which will have a portfolio of six of NTT's data centre assets, will likely be the largest Singapore Reit listing in a decade. Meanwhile, interior fit-out business Lum Chang Creations is looking to list on the Catalist board.