Xuanzhu Biopharma

Date of Prospectus: October 6, 2025

Xuanzhu Biopharma Launches Hong Kong IPO: In-Depth Analysis of Offer Structure, Financials, Growth Prospects, and Market Outlook

IPO Snapshot: Xuanzhu Biopharma’s Hong Kong Listing

Xuanzhu Biopharma, an innovation-driven biopharmaceutical company focused on China’s dynamic healthcare sector, is launching its initial public offering on the Main Board of the Hong Kong Stock Exchange. The IPO seeks to capture investor interest in the region’s fast-growing biotechnology landscape, offering exposure to a diversified, R&D-led pipeline and China’s transformative pharmaceutical industry.

• IPO Symbol: Not disclosed
• Offer Price: HK\$11.60 per H Share
• Total Offer Size: Approximately HK\$701.0 million in net proceeds (after fees)
• Number of Shares Offered: 67,333,500 H Shares in the Global Offering (comprising both Hong Kong Public Offering and International Offering)
• Post-IPO Outstanding Shares: 517,947,790 Shares (including 160,701,996 H Shares)
• Market Capitalization (post-IPO): HK\$6,008.2 million
• Market Capitalization of H Shares: HK\$1,864.1 million
• Listing Date: Expected on or about October 15, 2025

Use of Proceeds: Financing Growth and Innovation

Net proceeds of approximately HK\$701.0 million are earmarked for high-impact, growth-oriented initiatives, reflecting Xuanzhu’s commitment to innovation and expansion:

• Research and Development: Continued investment in the company’s comprehensive in-house R&D platform and clinical advancement of core pipeline products.
• Product Commercialization: Funding the commercialization of portfolio candidates and supporting related business development activities.
• Working Capital: Enhancing operational flexibility and supporting ongoing administrative and operating costs.
• Cost Efficiency & Receivables: Improving cost management and trade receivables collection as the business grows.

This capital allocation underscores a clear growth-driven story, with resources primarily supporting R&D, product launches, and market development rather than deleveraging.

Dividend Policy: Retained Earnings for Growth

No dividends have been declared or paid during the track record period. The company expects to retain all future earnings to fund operations and expansion, with no formal dividend policy or fixed distribution ratio post-listing. Under PRC law, profits must first make up for historical losses and fund statutory reserves before any dividend. Given accumulated losses, dividends are unlikely in the foreseeable future.

Offer Allocation Breakdown

• Hong Kong Public Offering: 6,733,500 H Shares (approx. 10.00% of Offer Shares)
• International Offering: 60,600,000 H Shares (approx. 90.00% of Offer Shares)
• Preferential Offering (Assured Entitlement): 3,366,500 H Shares (5.00% of Offer Shares), reserved for Qualifying Sihuan Shareholders, offered out of International Offer Shares
• Conversion of Unlisted Shares into H Shares: 93,368,496 Unlisted Shares converted to H Shares on a one-for-one basis upon completion

Public float: 134,585,396 H Shares (approx. 25.98% of issued share capital) will be counted towards public float, exceeding the required 24.96% minimum.

Investor Participation and Book Quality

• Cornerstone Investor: Not named in summary, but cornerstone participation confirmed, with no preferential rights except guaranteed allocation at offer price; does not become a substantial shareholder post-IPO.
• Pre-IPO Investors: Raised approximately RMB1.6 billion in three rounds, including CS Capital Co., Ltd. (held 20.72% pre-IPO); all proceeds used for R&D and working capital.
• Lock-up: Pre-IPO investors are not permitted to sell shares for 12 months post-listing under PRC law.
• Book Quality Assessment: The presence of a sophisticated investor base and cornerstone participation, along with a strong underwriting syndicate, suggests a robust institutional book. This implies potentially strong first-day performance, conditional upon market sentiment and sector trends.

Deal Parties and IPO Structure

• Sole Sponsor: China International Capital Corporation Hong Kong Securities Limited
• Joint Overall Coordinators: Not explicitly named in the summary; inferred to include major bookrunners
• Joint Global Coordinators, Bookrunners, Lead Managers: Roles and parties listed in the full contents but not named in summary sections
• Underwriters: Hong Kong Underwriters (fully underwrite Hong Kong Public Offering); International Underwriters (expected to fully underwrite International Offering)
• Stabilization/Greenshoe: Not specifically disclosed; stabilization provisions referenced in the underwriting section

Listing-day performance is likely to be well-supported by the presence of top-tier sponsors and underwriters with a track record of executing large Hong Kong IPOs, as indicated by their prominent roles in the deal.

Company Overview: Xuanzhu Biopharma’s Innovation-Driven Model

Xuanzhu Biopharma is a China-based, innovation-driven pharmaceutical company leveraging deep local industry understanding to address unmet clinical needs. Since Sihuan Pharmaceutical Holdings Group Ltd. acquired a majority interest in 2008, the company has built a comprehensive, in-house R&D platform supporting a diversified and balanced pipeline.

• Core Products: KBP-3571, XZP-3287, and XZP-3621 (as per Chapter 18A of HKEX Listing Rules)
• Revenue Streams: Commercialized products (notably KBP-3571, generating revenue from 2023 onward), R&D pipeline advancement
• Customer Segments: Healthcare providers, hospitals, and institutions across China
• Geographic Focus: China-centric, with aspirations for global reach

The business model is centered around developing, commercializing, and licensing novel drugs, with a strong emphasis on internal research and innovation.

Industry Landscape and Market Position

Xuanzhu Biopharma operates in China’s biopharmaceutical sector, which is undergoing significant transformation and growth. According to market definitions included in the document:

• Industry Segments: Innovative drugs, generic drugs, and biosimilars
• Growth Drivers: Aging population, rising healthcare expenditure, government support for innovation, and unmet clinical needs
• Competitive Advantages: Proprietary R&D platform, balanced pipeline, track record of advancing products to commercialization, experienced management
• Brand Strength: Supported by Sihuan Pharm’s legacy and industry relationships

Market share and exact rankings are not quantitatively disclosed, but the company positions itself as an innovative leader with a robust, diversified pipeline.

Financial Health: Key Metrics and Ratios

Xuanzhu Biopharma’s financials reflect a company in the early stages of commercialization, with a recent transition from R&D focus to initial product sales. The following table summarizes key ratios and capital adequacy:

The company projects sufficient working capital for at least 12 months post-listing, with a potential financial runway of up to 52 months if IPO proceeds are included.

Management Team and Leadership

Key company leadership includes:

• Directors: Xu Yanjun (Executive Director), Dr. Li Jia Kui, Dr. Shih Cheng-Kon (among others)
• Diverse Board: Comprises executive, non-executive, and independent directors with backgrounds in biopharma and finance
• Corporate Governance: Supported by audit and compliance committees

Trends, Timing & Market Environment

The biopharma sector in China is benefitting from:

• Demographic Tailwinds: Aging population and growing demand for advanced medicines
• Policy Support: PRC government emphasis on pharmaceutical innovation and healthcare access
• Market Timing: The offer period runs October 6–10, 2025, with listing scheduled for October 15, 2025
• Sector Demand: Strong historical demand for innovative drugs and biosimilars, as cited in industry data

Macro indicators and sector commentary in the document point to a broadly favorable environment for a biotech IPO, with investor appetite for growth and innovation stories remaining robust.

Recent Company Developments

• Product Launch: First commercial product, KBP-3571, began generating revenue in 2023 after NMPA approval
• IPO Track Record: Previously applied for Shanghai STAR Market listing in September 2022, withdrawn May 2024
• Pre-IPO Funding: Three rounds, raising RMB1.6 billion, all deployed for R&D and working capital

Risk Factors: Key Exposures and Mitigants

• Regulatory Risk: Subject to evolving PRC and international pharmaceutical regulations; failure to comply may impact operations
• Product Concentration: Commercialization and revenue currently reliant on a limited number of products
• Research and Development: Clinical and regulatory success is uncertain; delays or failures could impact financial performance
• Working Capital: Current ratio declining (3.8 in 2023 to 1.4 in mid-2025), but adequate capital runway projected post-offering
• Pre-IPO Lock-up: All Pre-IPO Investors are restricted from selling for 12 months, reducing near-term overhang risk
• Dividend Restrictions: Historical losses must be covered and statutory reserves funded before any dividends can be paid
• Connected Transactions: Ongoing related-party transactions disclosed, with waivers granted for certain listing rule requirements

Growth Strategy: Expansion, Pipeline, and Market Entry

Xuanzhu Biopharma’s forward plan emphasizes:

• R&D Acceleration: Advancing pipeline products toward commercialization, leveraging in-house capabilities
• Product Launches: Commercializing additional pipeline candidates to diversify revenue
• Cost Efficiency: Improving operational leverage as product sales scale
• Market Expansion: Leveraging proceeds to penetrate new geographic and therapeutic markets
• Strategic Partnerships: Open to alliances and collaborations to extend reach and capabilities

No specific M&A or capex pipeline details are disclosed, but the use of proceeds and management commentary signal a clear intent to scale R&D and market presence.

Ownership Structure and Lock-Ups

• Promoters/Major Shareholders: Pre-listing, Sihuan Pharm and CS Capital Co., Ltd. (20.72%); detailed breakdown includes institutional and strategic investors
• Post-IPO Shareholding: 517,947,790 Shares outstanding; 160,701,996 as H Shares
• Lock-in Periods: Pre-IPO investors and existing shareholders cannot sell shares for 12 months post-listing
• ESOPs and Incentive Platforms: Not detailed in summary; certain partnerships and incentive vehicles named in definitions

Listing Outlook: Investor Considerations and Trading Range

Based on disclosed facts and figures:

• Solid Book Quality: Institutional anchor and cornerstone participation, with all pre-IPO investors locked up for 12 months, suggests reduced selling pressure and robust demand.
• Growth Story: Proceeds are entirely growth-focused, funding R&D, commercialization, and market expansion, which typically attracts long-term institutional support.
• Financial Strength: Sufficient working capital and cash runway for several years post-offering, mitigating near-term financial risk.
• Underwriter Quality: The involvement of leading investment banks and full underwriting of both tranches provide confidence in market support and listing-day stability.

Inferred Outlook: The IPO appears well-structured and likely to be met with strong institutional interest, especially from investors seeking exposure to China’s pharmaceutical innovation boom. First-day trading is likely to be strong, with a trading range at or above the offer price of HK\$11.60, assuming stable market conditions. The absence of dividend, coupled with an R&D-driven model, may limit appeal for income-focused investors but strengthens the case for growth-oriented portfolios.

Prospectus Access

The official prospectus and further information are available at:
www.hkexnews.hk
www.xuanzhubio.com

How to Apply: Application Channels and Timetable

• Application Channels: Fully electronic application process via:
  • White Form eIPO service at www.eipo.com.hk
  • HKSCC EIPO channel (via your broker or custodian using HKSCC’s FINI system)
  • No physical applications accepted.
• Application Window:
  • Opens: 9:00 a.m., Monday, October 6, 2025
  • Closes: 12:00 noon, Friday, October 10, 2025
• Eligibility: Applicants must be at least 18 years old, have a Hong Kong address (for White Form eIPO), and be outside the United States / not a “United States Person.”

Results of allocations will be published no later than 11:00 p.m., Tuesday, October 14, 2025, on www.hkexnews.hk, www.xuanzhubio.com, and www.iporesults.com.hk.