Sinopharm Group Co. (HKG:1099) plunges

Northern, WI 03/28/2013 (avauncer) - The largest drug maker of China, Sinopharm Group Co. (HKG:1099) (Current HKD25.00, down by 7.41%) was the biggest loser in Hong Kong trading market in the past three years. The company proposed to sell close to $515 Million new shares.

Sinopharm plummeted 7.4% to HK$25.0 at 1:40 p.m., the biggest fall in the stock price since May 25, 2010. Close to 51 Million shares of Sinopharm were traded. The average trading volume of the stock is 3 Million.

On the MSCI Asia Pacific Index (excluding Japan), Sinopharm was the third-largest loser.

The China based company; Sinopharm expressed its inclination to sell 165.7 Million common stocks at HK$24.6 per share to non-retail investors which would range between 6 and 10. Per share stock price of the issue would be 8.9% lower to than the closing price of the stock on Wednesday.

The company has 994.0 Million of H-share and the company‘s issued share capital would total 2.6 Billion after the sale. The funds thus raised through the share issuance would be utilized in expanding the sales network of the company. Sinopharm plans to expand its pharmaceutical distribution network and retail footprint through the funds raised. This would even enhance the liquidity position of the company.

UOB Kay Hian Investment Co., an investment consultant firm based in Shanghai commented that the capital thus raised by Sinopharm is essential for it to expand and grow further. Carol Xiao, an analyst in UOB Kay Hian Investment Co also speculated a further additional share issue by the company later this year to sustain its growth plans.

According to Sinopharm, the controlling hold of the company would be retained by China National Pharmaceutical Group Corp, a state owned enterprise.