Pharma play Simcere Pharmaceutical (2096 HK) has announced the spin-off and listing of 83.1%-held Simcere Zaiming on the HKEx.
There will be a global offering, the details of which are still to be fleshed out. Simcere Pharma is expected to hold >50% in Simcere Zaiming post listing.
Simcere Zaiming, a biopharmaceutical play focusing on oncology, accounted for ~20% of Simcere Pharma’s revs in 2024, and ~23% of NTA.
The Trade:
Often, the sum of the parts is larger than the whole. This may still hold here.
However, given the size of Zaiming - relative to Simcere Pharma - higher market multiples may have a limited impact on the overall valuation. Especially when factoring in a holdco discount.
My calcs suggest Simcere Pharma is fairly valued versus its historical metrics.
Simcere Pharma’s share price is down since the announcement. That’s illustrative.
The insight is still labelled bullish as I’m not bearish here. But it’s not a strong conviction.