March 20, 2012
Translated By Zhu Na

Beijing News reported Tuesday that two privately-owned pharmacy chains LBX Pharmacy (老百姓大药房) and Yifeng Pharmacy (益丰大药房), have applied to hold initial public offerings.

If their applications are approved, the companies will become the first pharmacy chains to trade on the A-share index and it may spur a boom in IPOs from the sector.

The companies are both based in Hunan and are undergoing the first stage of the examination procedure for IPOs according to the data recently issued by China Securities Regulatory Commission.

LBX's listing is being sponsored by UBS Securities and would take place on the Shanghai exchange. Yifeng's sponsor is CITIC Securities and its listing would be in Shenzhen.

LBX has annual sales of 3.7 billion yuan from 600 stores spanning 15 provinces. Yifeng has 470 stores.

Guo Fanli (郭凡礼), who analyses the market, said that a flurry of IPOs in the pharmacy sector could lead to a major restructuring of the industry and the elimination of some of the weaker players.

The published data shows that around a third of China’s pharmacies operate at a loss, and analysts believe that the pharmacy chains will benefit from a reorganization of the pharmaceuticals distribution sector.  

Links and Sources
The Beijing News: 零售药店有望首次进入A股