Drug maker debut lands China’s new richest man

* Li’s stock worth $7.8 bln after debut on start-up market

* High tech new source of wealth as property falls from
grace

* Hepalink shares jump as much as 27 pct

By Samuel Shen and Edmund Klamann

SHANGHAI, May 6 (BestGrowthStock) – A pharmaceutical researcher
once spurned by big state-owned firms became China’s richest
man on Thursday after shares in a drug maker partly owned by
Goldman Sachs (GS.N: ) were listed in the southern boomtown of
Shenzhen.

Shenzhen Hepalink Pharmaceutical Co (002399.SZ: ) Chairman
and founder Li Li’s wealth rose to $7.8 billion after the
shares gained as much as 27 percent on China’s Nasdaq-style
market for start-up stocks.

Hepalink is the world’s biggest maker of blood-thinning
heparin products and a supplier to global drug firms including
Sanofi-Aventis (SASY.PA: ) and Novartis (NOVN.VX: ).

The stellar IPO, against the backdrop of a weakening
broader market, may stir concerns over asset price bubbles but
offers some clues on future investment opportunities in China,
where authorities have stepped up curbs on the overheating
property sector.

“I expect to see more people in the rich list to come from
high-tech sectors as the government is obviously shifting its
support away from traditional industries such as real estate,”
said Wu Binghua, analyst at Debon Securities Co.

Eight of China’s 10 richest people in 2009 were involved in
the real estate sector, according to the Hurun Rich List.

STELLAR RETURNS

Hepalink traded as high as 188 yuan, a record high price
for a Chinese stock and up 27 percent from its 148 yuan IPO
price. It values the company at about $10.5 billion.

The listing propelled Li, who with his wife owns a 72
percent Hepalink stake, past Wang Chuanfu, chairman of carmaker
BYD Co (1211.HK: ). Wang’s wealth last year was estimated at $5.1
billion, according to the Hurun list.

The debut also generates a return on paper of more than 200
times for Wall Street Bank Goldman, which paid about 37 million
yuan for 45 million Hepalink shares in 2007.

Li, 46, and his wife met while studying chemistry at
Sichuan University, according to media reports. After failed
attempts to cooperate with state-owned pharmaceutical firms,
they founded Hepalink in 1998 to produce heparin using a
procedure Li says he has been perfecting for 25 years.

The start-up became profitable in 2000 and growth has
accelerated in recent years, partly helped by funding from
investors such as Goldman.

Annual net profit growth averaged almost 250 percent during
the past three years, on sales that surged nearly 175 percent
every year, according the company’s prospectus.

First-quarter earnings more than doubled to 1.69 yuan per
share, while three analysts polled by Reuters forecast an
annual profit of 3.15 yuan per share in 2010.

Hepalink’s IPO price of 148 yuan is 73.27 times the
company’s reported earnings in 2009 on a diluted basis.
Stock Market Analysis

(Editing by Lincoln Feast)
($1=6.826 Yuan)

Drug maker debut lands China’s new richest man