Tongjitang Chinese Medicine Co, a domestic traditional Chinese
medicine manufacturer, made its debut on Friday on the New York
Stock Exchange, becoming the first traditional Chinese medicine
company to list on the world's biggest exchange.
Tongjitang earlier offered 9.87 million American Depositary
Shares (ADS) at an estimated price range of US$15 to US$17 a share
in a bid to raise as much as US$168 million. The offer was
underwritten by Merrill Lynch, UBS Securities and CIBC World
Markets. The company offered 8.35 million ADS; selling shareholders
offered another 1.5 million ADS.
"It is a sign that Chinese herbal medicine has been winning
greater recognition among Westerners as an alternative health care
supplement," said Yuan Lu, an analyst at Everbright Securities.
Tongjitang was privately founded in 1995. It has more than 140
kinds of Chinese traditional medicine and Western medicine,
which are sold both by prescription and over the counter. The
company owns seven patented herbal drugs, including Xianling Gubao
for the treatment of osteoporosis and Zaoren Ansheng for
neurasthenia.
Tongjitang's net income in 2006 amounted to US$17.2 million, up
20 percent from 2005. Its major product, Xianling Gubao, accounted
for 77.2 percent of the revenue.
Premier Wen Jiabao said in a March 5 report that the
government would strongly support the development of traditional
Chinese medicine and the folk medicine of ethnic minorities and give full play to their
important role in preventing and treating illness.
"The premier's report raised our confidence in the Chinese
medicine industry. Chinese traditional medicine companies have been
performing well in recent years," said Yuan. For instance, Yunnan Baiyao Group Co Ltd, which listed on
the Shenzhen Stock Exchange, posted a net profit increase of 20
percent in the period from January to September in 2006.
"But not all the medicine companies performed well, especially
when the price of medicine drops and the medicine industry lacks
regulation," said Ye Songtao, an analyst at Changjiang
Securities.
"Listing overseas can help companies boost their international
reputation and facilitate overseas expansion," said Ye.
(China Daily March 17, 2007)