The Hong Kong IPO market is alive and well. Sinopharm, the largest drug distributor on the mainland, came public yesterday. The offering, which raised HK$8.73 billion, was almost 600x oversubscribed, according to Bloomberg. The stock was priced at the top of the range, on a 2010 price earnings multiple of 25x.
I have no opinion about the merits of Sinopharm. It sounds like a great story and may well turn out to be the superior long-term winner that the market expects it to be. But 600x oversubscribed means animal spirits are running high in the Hong Kong market and suggests that the timing of the IPOs of the WYNN and LVS Macau casinos couldn’t be much better.