Switzerland: CanSino Biologics and BCHT join list of Chinese firms heading to Switzerland with GDRs

Changchun BCHT Biotechnology, a biopharmaceutical enterprise committed to the prevention and control of infectious diseases, and vaccine company, CanSino Biologics, are the latest in a line of Chinese companies looking to list on the SIX Swiss Exchange.

SIX had been working with the Chinese authorities and the Shanghai and the Shenzhen stock exchanges to establish a system that enables Chinese companies to access the Swiss capital market – and vice versa. By the end of 2022, there had been nine listings recorded including Global Depositary Receipts (GDR) for Joincare Pharmaceutical and Lepu Medical Technology.

GDRs are tradable securities, issued by a bank, that represent shares in foreign equity securities that are segregated and deposited in the home country. The listing of GDRs on SIX Swiss Exchange has been possible since 2007, but a recent revision of the regulatory framework, which came into force in July 2022, saw four Chinese companies becoming the first to list as part of the newly launched China-Switzerland Stock Connect programme.

CanSino Biologics and BCHT are the latest to express an interest in widening their investor base to Europe in order to fund expansion plans.

HK-listed CanSino Biologics sees a GDR listing as a means to broaden its international financing channels and enhancing its brand and image abroad. Xinyao (Criss) Wang, a HK/China healthcare analyst writing on SmartKarma is bullish for CanSino, pointing to the demand/supply mismatch for blood products intensifying. “There’s little way to increase production capacity in short time,” says Wang. “Which offers a good time to invest blood products companies.”

The single product structure is the biggest risk of BCHT, however, according to Wang. That points to BCHT as being inferior to CanSino in terms of pipeline quality and R&D capability. “We think its valuation should be lower than CanSino,” says Wang.