Genome sequencing company BGI is weighing an A-share Chinese listing, FinanceAsia reports.
Although BGI's chief science officer Mao Mao has told Chinese media that the firm is planning to launch its IPO by the end of the year, a FinanceAsia source says that it's "very unlikely" that BGI would go public this year, given how slowly new Chinese IPOs are being approved.
BGI plans to list on the Shenzhen-based ChiNext exchange. But, some 250 companies are waiting to be added to ChiNext, and only 11 have been added since the start of the year, FinanceAsia says, noting that the slowdown comes in the wake of China Securities Regulatory Commission's four-month IPO ban after last summer's stock market crash, though this slow rate also may reflect the quieter period that accompanies the Chinese New Year holidays.
With its IPO, BGI is seeking to raise funds for development and acquisitions, including ones that would help the company expand internationally, FinanceAsia adds.
"Most Chinese companies go overseas through mergers and acquisitions. … We will adopt a similar approach," Yin Ye, BGI's chief executive, tells FinanceAsia. BGI bought California-based Complete Genomics in 2013 for about $117.6 million, a move that came, FinanceAsia says, after selling a stake in BGI Tech to consortium of private equity and venture capital investors in 2012.
BGI previously sought an IPO of BGI Tech in Hong Kong in 2014, but ditched that plan, FinanceAsia adds, after its net earnings fell from Rmb98.7 million (US$15 million) in 2013 to Rmb6.5 million in 2014.