Former meat factory worker named China's richest man

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The Independent Online

A tycoon who began his working life in a state-owned meat-packing factory became China's richest man yesterday when he floated his pharmaceuticals business and saw its shares jump by 27 per cent on the first day of trading.

Li Li's company Shenzhen Hepalink Pharmaceutical listed on China's Nasdaq-style stock exchange, the Shanghai Composite Index, and soared in early trading, putting Mr Li's wealth at about $7.8bn (£5.2bn).

The initial public offering, which comes against the backdrop of soft international equity markets thanks to the debt woes of Greece, raised 5.9bn yuan (£573m). The money will allow Hepalink to expand its operations. The group is the world's biggest maker of blood-thinning heparin products and supplies the likes of Novartis and Sanofi-Aventis.

Mr Li, the group's founder and chairman, retains a 72 per cent stake in the group, but he was not the only one to get rich from yesterday's flotation. Goldman Sachs, the US investment bank, has made a 250-fold return on its investment after it paid just £3.5m for 45m shares in Hepalink three years ago.

Mr Li has shot to the top of China's rich list as a result the IPO, unseating Wang Chuanfu, who heads the Chinese car maker BYD. Mr Wang was reportedly worth as much as $5.1bn last year.

Mr Li studied chemistry at Sichuan University in the Nineties. After graduating he worked for the meat-processing company, before resigning and in 1998 establishing Hepalink. "I expect to see more people in the rich list to come from hi-tech sectors, as the [Chinese] government is obviously shifting its support away from traditional industries such as real estate," said Wu Binghua, an analyst at Debon Securities.

Eight of China's 10 richest people in 2009 had interests the real-estate sector. The Chinese government has become concerned that the property sector in China could overheat, and is considering policies to prevent it becoming a bubble.

On its first day of trading, Hepalink reached a record high of 188 yuan a share, after hitting the market at 148 yuan. The company became profitable in 2000, with growth accelerating in recent years, partly helped by funding from backers such as Goldman Sachs.

The group's first-quarter earnings more than doubled to 1.69 yuan a share, while net income increased five-fold to 809m last year. Sales at the group jumped to 2.2bn yuan.

Heparin is one of the oldest drugs in clinical use, having been discovered in the US during the First World War and developed for medical use in Canada. Extracted from pig or cow intestines, it is injected to prevent blood clots in patients with heart conditions.