There’s no questioning the health of the market as far as Sihuan Pharmaceutical is concerned. The Chinese maker of cardio-cerebral vascular drugs priced its $741 million IPO last Friday at HK$4.60, the very top of its range. At 26.7 times forecast earnings for 2011 that makes it the most expensive stock to list in Hong Kong this year, according to FinanceAsia. The company began trading yesterday and surged 25% on its first day. Investors seem prepared to pay a high valuation, says Reuters, as “China promises to spend billions to reform its antiquated medical system”. There’s more to come: the country’s second biggest drug firm, Shanghai Pharmaceuticals, plans a $1.5 billion IPO next year.
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