Analysis of the Impact of BioRay Pharma's Hong Kong IPO on Zhejiang Hisun Pharmaceutical's Investment Value and Asset Reassessment

On January 6, 2026, Zhejiang Hisun Pharmaceutical (600267.SH) announced that its subsidiary Zhejiang BioRay Pharmaceutical Co., Ltd. has formally submitted an application for the initial public offering of overseas listed shares (H-shares) and listing on the main board of the Hong Kong Stock Exchange [1][2]. This is one of the most important asset reassessment catalysts for Hisun in recent years.

: Hisun holds a 39.62% stake in BioRay Pharma, making it the second-largest shareholder; the largest shareholder is PAG (Pacific Alliance Group) with a 44.62% stake; other shareholders include GIC (4.64%), Taizhou State-owned Assets, Fuyang State-owned Assets, etc. [1][3].

: It is a biopharmaceutical company focused on the immunotherapy field, with 8 commercialized products, including Beijiele® (Bimekizumab), the world’s first IL-17A/F dual-target inhibitor, Anruixi (Zebutuzumab), China’s first class 1 innovative CD20 monoclonal antibody, and BR2251, a potential first-in-class gout drug [2][3]. BioRay Pharma’s revenue grew from approximately RMB 200 million in 2019 to RMB 1.65 billion in 2024, with a 5-year compound annual growth rate of over 35% [2].

BioRay Pharma has experienced significant valuation growth. In 2019, PAG (Pacific Alliance Group) acquired a 58% stake in BioRay Pharma for RMB 3.828 billion, corresponding to an overall valuation of approximately RMB 6.6 billion [3][4]. In 2022, BioRay Pharma completed a RMB 540 million financing, with a post-investment valuation reaching RMB 13.5 billion, an increase of approximately 105% compared to 2019 [3][5]. Hisun’s original investment cost is estimated to be approximately RMB 2.77 billion (before 2019), and its current holding corresponds to RMB 262 million in registered capital [5].

Valuation analysis is conducted using the Price-to-Sales (PS) ratio method:

• Conservative Estimate (PS=8x): Valuation of RMB 13 billion, value of Hisun’s stake: RMB 5.14 billion
• Neutral Estimate (PS=14x): Valuation of RMB 22.7 billion, value of Hisun’s stake: RMB 9.0 billion
• Optimistic Estimate (PS=16x): Valuation of RMB 26 billion, value of Hisun’s stake: RMB 10.29 billion

In terms of peer valuation benchmarks, Hong Kong-listed biopharmaceutical companies such as Kangnoah Bio (PS=12.3x), Sino Cell Therapy (PS=15.2x), and DualityBio (PS=25.8x) provide valuation references for BioRay Pharma [3][6]. Given that BioRay Pharma is profitable and has 8 commercialized products, the neutral valuation range should be PS=12-16x, corresponding to a valuation of RMB 19.5-26 billion.

Hisun’s current book value of long-term equity investment is approximately RMB 3.5 billion. If BioRay Pharma completes its IPO at a neutral valuation (PS=14x, valuation of RMB 22.7 billion), the value of Hisun’s 39.62% stake will be approximately RMB 9.0 billion, corresponding to a reassessment appreciation of approximately RMB 5.5 billion, with an appreciation rate of 157% [0][5].

This reassessment impact is of great significance to Hisun:

• The stake value (RMB 9 billion) accounts for
  102%
  of Hisun’s current market capitalization (RMB 8.8 billion)
• The reassessment appreciation (RMB 5.5 billion) accounts for approximately
  62%
  of Hisun’s net assets
• Based on this calculation, Hisun’s other businesses are essentially given a
  negative valuation
  by the market

From the perspective of historical investment returns:

• Hisun’s original investment cost: approximately RMB 2.77 billion
• Current book value: approximately RMB 3.5 billion
• Post-IPO stake value (neutral): approximately RMB 9.0 billion
• Potential book value appreciation: approximately RMB 5.5 billion
• Total return multiple: 3.25x

In terms of accounting treatment, this investment will be measured at fair value after the IPO, and the reassessment appreciation will be recorded in capital reserves. Although it will not affect current profits, it will significantly increase net assets.

In 2025, the Hong Kong-listed biopharmaceutical sector rebounded significantly. Hengrui Medicine raised HK$9.89 billion in its Hong Kong IPO and rose 25.2% on the first day, DualityBio rose 116% on its first day, and Insilico Medicine rose 45.5% on its first day [6]. As of 2025, 28 healthcare companies have listed in Hong Kong, exceeding the total number of listings in 2024 and 2023 combined [6]. This positive market environment is conducive to BioRay Pharma’s IPO pricing.

: Approval from the China Securities Regulatory Commission, Hong Kong Securities and Futures Commission, and Hong Kong Stock Exchange is still required, and the final issue price may be lower than expected [1].

: The biopharmaceutical sector experiences significant valuation volatility, and Hong Kong stock market liquidity is relatively weaker than that of the A-share market [6].

: As a major shareholder, Hisun may face a 6-12 month lock-up period, and share reductions must comply with relevant regulations [1].

: Including pressure from price cuts in centralized procurement of biosimilars, risks of innovative drug R&D failure, intensifying market competition, etc.

1. A typical asset reassessment opportunity from the spin-off listing of a subsidiary
2. BioRay Pharma is profitable with 8 commercialized products, distinguishing it from R&D-only biotechs
3. The stake value (RMB 9 billion under neutral estimate) is close to Hisun’s current market capitalization (RMB 8.8 billion)
4. The Hong Kong-listed biopharmaceutical sector rebounded in 2025, with improved financing conditions

Hisun’s current PB ratio is 1.39x, which is lower than the pharmaceutical industry average of 2.5x. If BioRay Pharma successfully completes its IPO and achieves a reasonable valuation, Hisun is expected to undergo an asset reassessment, with its PB ratio repairing to above 2.0x, corresponding to a potential stock price increase of approximately 40-60%.

Scenario	PS Valuation Multiple	Value of Hisun’s Stake (RMB 100 million)	Impact on Stock Price
Pessimistic	8x	51.4	Neutral to Bearish
Conservative	12x	77.2	Moderate Increase
Neutral	14x	90.0	30-50% Increase
Optimistic	16x	102.9	50%+ Increase
Aggressive	20x	128.6	Potential to Double

: Cautious Add (Event-Driven Opportunity)

: IPO approval progress, valuation expectations disclosed in the prospectus, performance of the Hong Kong-listed biopharmaceutical sector, and improvement in Hisun’s core business operations.

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[1] Yicai - “Zhejiang Hisun Pharmaceutical: Subsidiary BioRay Pharma Submits H-Share Listing Application” (https://www.yicai.com/brief/102989970.html)

[2] Sina Finance - “Hisun Pharmaceutical’s Subsidiary BioRay Pharma’s Hong Kong IPO Application Accepted” (https://finance.sina.com.cn/roll/2026-01-07/doc-inhfkwsm8159269.shtml)

[3] Pharmcube - “Valued at RMB 13.5 Billion! BioRay Pharma Submits Hong Kong IPO Application, PAG Holds 44.62% Stake” (https://bydrug.pharmcube.com/news/detail/d8dce9559486b7609304b12b8685e23f)

[4] BioRay Pharma Official Website - “Dr. Wang Haibin, CEO of BioRay Pharma: An ‘Unconventional’ Entrepreneur” (https://www.bioraypharm.com/index.php?m=content&a=index&classid=41&id=97)

[5] Debon Institute - “Zhejiang Hisun Pharmaceutical (600267.SH): Continuous Improvement in Operational Efficiency and Profitability” (https://pdf.dfcfw.com/pdf/H3_AP202312031613220913_1.pdf)

[6] Securities Times - “Biopharmaceutical Sector Enters IPO Boom: Can Hong Kong Stocks Become a Financing ‘Safe Haven’ Under the 18A Policy?” (https://www.stcn.com/article/detail/3345721.html)

[0] Jinling AI - Calculated based on public disclosure data of listed companies and financial analysis tools