Hong Kong-listed pharmaceutical group China Medical System (CMS) has filed for a secondary listing on the Singapore Exchange (SGX) mainboard, with trading expected to commence in July 2025. The move represents a strategic expansion into Southeast Asia's rapidly growing pharmaceutical market as the company seeks to replicate its success in China's pharmaceutical landscape.
Strategic Regional Expansion
CMS aims to deepen its footprint in Southeast Asia by leveraging Singapore as its regional hub. The company noted that "the Southeast Asian region, home to nearly 700 million people, is experiencing a surge in pharmaceutical demand" driven by rapid economic expansion, a growing middle class, an ageing population, and the rising prevalence of non-communicable diseases.
Founded in 1995 and listed on the Hong Kong Stock Exchange since 2010, CMS specializes in the entire lifecycle of pharmaceuticals, including clinical need identification, research and development (R&D), regulatory approval, and commercialisation. The company expects the secondary listing will help it "tap into a new and sophisticated investor base in Singapore."
Financial Recovery Following Policy Challenges
CMS's financial performance faced headwinds in 2023 and early 2024 due to China's volume-based procurement (VBP) policy, which led to price suppression on several of its products. Three of CMS's products were included in the VBP list, a policy that aims to lower drug prices with generic competition by guaranteeing certain procurement volumes from public hospitals at significantly reduced prices through a bidding process.
However, the company experienced a second-half rebound in 2024, driven by the commercialisation of innovative drugs and growth in non-VBP products. CMS moved towards innovative drugs, given that they typically enjoy a pricing advantage due to their exclusiveness, novelty and quality, and are supported by favourable government policies.
Innovation Pipeline and Growth Strategy
Looking ahead, CMS expects accelerated growth, underpinned by a robust innovation pipeline projected to include around 40 innovative drug products by the end of 2024. The company outlined its regional strategy through four key platforms:
CMS R&D focuses on global drug discovery and development targeting global markets, while PharmaGend oversees manufacturing and regional supply chains as a development and manufacturing platform for regional manufacturing and supply.
Rxilient Health, based in Singapore, is responsible for commercialisation in Southeast Asia, serving as a Singapore-headquartered entity focused on registration and commercialisation in the region. The company's Venture Arm backs strategic investments in regional pharmaceutical innovation, making strategic investments to support regional pharma innovation.
Non-Dilutive Listing Structure
In its June 24 announcement, CMS clarified that the SGX listing will be non-dilutive, involving no issuance of new shares. The company's primary listing will remain on the Hong Kong Stock Exchange, with Singapore serving as its regional headquarters for its Southeast Asia and Middle East business.
Market Context
CMS's announcement comes amid renewed IPO activity on SGX, with recent filings including Info-Tech Systems, a software services firm expected to debut on July 4, marking SGX's first mainboard listing in two years. Other notable listings include NTT DC Reit, backed by Japanese telecom giant Nippon Telegraph and Telephone, set to become Singapore's largest Reit IPO in a decade, and Lum Chang Creations, a spin-off from Lum Chang Holdings.
The SGX is attracting interest from other Chinese firms seeking secondary listings, a trend driven by ASEAN growth prospects and the region's increasing relevance to multinational pharma strategies. This strategic SGX listing underscores CMS's ambition to become a pan-Asian pharmaceutical powerhouse, capitalising on cross-border innovation, local market access, and investor diversification.
