Analysis of the Impact of Biocytogen's H+A Listing Expectations on Its Valuation

Based on collected information, I will systematically analyze the impact of Biocytogen’s H+A listing expectations on its valuation.

Biocytogen (stock code: 02315.HK/688796.SH) is a biotech company focused on innovative antibody drug research and development. Its core competitive advantages lie in its self-developed RenMice® platform and the “Thousand Mice & Ten Thousand Antibodies” Initiative, which aims to scale screening and development of innovative antibody drugs by knocking out over 1000 potential drug targets.

Regarding the H+A listing process: Biocytogen received Sci-Tech Innovation Board (STAR Market) IPO acceptance on June 20, 2023. After over two years of review, it was registered effective on October 16, 2025, and officially confirmed the issuance price at 26.68 yuan per share on December 4, corresponding to an issuance P/E ratio of 519.12x, far exceeding the industry average of 39.31x [1]. The total raised funds amounted to 1.267 billion yuan, mainly invested in early drug R&D service platform construction projects and antibody drug R&D and evaluation projects.

From the capital market performance: Biocytogen’s Hong Kong stock rose by 315% in 2025, becoming one of the top ten bull stocks in the innovative drug sector [2]. Behind this significant increase, H+A listing expectations were an important catalyst for the stock price rise. As one of the companies striving for dual H+A listings, its Hong Kong stock price became increasingly strong as the A-share listing review and listing milestones approached. Especially after being successfully included in the Stock Connect targets on December 24, 2025, the stock price rose another 22% that day, fully demonstrating the capital market’s high recognition of the H+A listing.

Inclusion in Stock Connect targets is a milestone, significantly improving the company’s stock liquidity and market attention. For a relatively niche market like Hong Kong stocks, participation of southbound funds can effectively expand the investor base and improve stock liquidity, thereby supporting a higher valuation level. Historical experience shows that H-shares included in Stock Connect targets often gain both liquidity and valuation improvements.

Through its RenMice® platform and “Thousand Mice & Ten Thousand Antibodies” Initiative, Biocytogen has built an extensive global cooperation network, with overseas revenue accounting for up to 70%, demonstrating strong international revenue-generating capabilities [2]. H+A listing expectations allow the company to gain valuation recognition from both domestic and overseas markets, forming a more complete valuation system. The A-share market usually gives higher growth premiums to innovative drug companies, while the Hong Kong stock market values international capabilities and liquidity more; the combination helps the company obtain a more reasonable and stable valuation.

From the fundamental perspective: Biocytogen successfully turned around losses in 2024, and its performance growth momentum further continued in 2025. First-half revenue increased by over 50% year-on-year; first-three-quarters revenue reached 941 million yuan, with a year-on-year growth rate rising to 60%, and net profit of 114 million yuan in the same period, with steadily improving profit quality [2]. Significant performance delivery provides solid support for the stock price, making the valuation boost from H+A listing expectations have a solid fundamental basis rather than pure concept speculation.

Biocytogen’s 519.12x issuance P/E ratio far exceeds the industry average, meaning the market has extremely high expectations for its future growth. Calculated based on 2024 financial data, its issuance price-to-sales ratio is 12.16x, which is also relatively high among comparable companies in the same industry [1]. High valuation is both recognition of the company’s development prospects and brings huge performance pressure. If future performance cannot continue to grow at a high speed to match the current valuation, it may face the risk of valuation correction.

Despite improved performance, Biocytogen still faces development concerns. The company began to significantly cut R&D investment in 2024: from 699 million yuan in 2022 to 209 million yuan in the first half of 2025, accounting for revenue from 130.96% to 33.68%. More critically, the R&D team size dropped sharply from 627 in 2022 to 403 in the first half of 2025, and full-time R&D personnel decreased from 58 to only 5 [1]. Reduced R&D investment and talent may adversely affect the company’s long-term innovation capabilities, which contradicts the high growth expectations implied by the high valuation.

Biocytogen’s RenNano fully human antibody mouse platform was sued for infringement by Harbour BioMed; the two sides have been in a tug-of-war for over a year. In November 2025, Harbour BioMed again filed a lawsuit with the Shanghai Intellectual Property Court, claiming 10 million yuan in economic losses and reasonable expenses [1]. In addition, actual controller Shen Yuelei borrowed funds in his personal name to make capital contributions to the employee equity incentive platform, and Ni Jian also obtained loans from Zhongguancun Bank to pay taxes for acquisition transactions [1]. These legal disputes and governance issues may have a negative impact on the company’s valuation.

From historical experience: A+H dual-listed companies usually have certain price differences. For Biocytogen: the STAR Market issuance price is 26.68 yuan per share, while the Hong Kong stock price may have differences due to various factors. Although inclusion in Stock Connect helps narrow the price difference, short-term valuation fluctuations and arbitrage behaviors may still affect stock price stability.

The core logic of Biocytogen’s valuation increase after H+A listing includes: sustained performance growth capability, commercialization progress of the “Thousand Mice & Ten Thousand Antibodies” Initiative, overseas market expansion capability, and overall valuation center changes in the innovative drug industry. The company needs to deliver sustained performance to support the current high valuation level.

Investors are advised to focus on the following indicators: revenue growth rate and net profit margin changes, R&D investment recovery status, number and quality of newly signed cooperation projects, patent dispute progress, and milestone payment status of the “Thousand Mice & Ten Thousand Antibodies” Initiative.

Investors need to pay attention to the following risk factors: high valuation correction risk, erosion of innovation capabilities due to sustained R&D investment reduction, uncertainty impact of legal lawsuits, and changes in innovative drug industry policies and market sentiment.

Overall: Biocytogen’s H+A listing expectations have had a significant positive impact on its valuation; the 315% stock price increase in 2025 fully reflects the market’s recognition of this expectation. H+A listing not only brings liquidity improvement and investor base expansion but also, more importantly, realizes international re-rating of valuation, allowing the company to gain value recognition from both domestic and overseas markets. However, the extremely high valuation level of 519x issuance P/E ratio also puts forward higher requirements for the company’s future performance growth. Risk factors such as reduced R&D investment, patent disputes, and founder debt issues still need close attention. In the long run: the company’s valuation will depend more on the commercialization progress of the “Thousand Mice & Ten Thousand Antibodies” Initiative and R&D breakthroughs of core products.

[1] 519x P/E Ratio Soon to Land on STAR Market: Growth and Concerns Behind Biocytogen’s “H First Then A” - STAR Market Daily (https://www.cls.cn/detail/2219897)

[2] Top Ten Bull Stocks in China’s Innovative Drug Sector 2025 - Investment Circle/Amino Observation (https://news.pedaily.cn/202601/559487.shtml)