A SMALL drugmaker based in eastern China shelved its share sale plan less than two weeks after the country’s initial public offering (IPO) market reopened, sparking speculation of government intervention after regulators promised to take a more hands-off approach.

    The drugmaker postponed its share sale, saying it was “too big.” The decision, a rarity in the advance stage of a listing process, pours cold water on a market which restarted after a 15-month hiatus with new rules to curb excessive pricing.

    Consulting firm PricewaterhouseCoopers has forecast the Chinese IPO market could be worth up to 250 billion yuan (US$41.3 billion) in 2014. The drugmaker’s postponement could lead to more restrained pricing by issuers and underwriters.

    The China Securities Regulatory Commission (CSRC), in comments on its official Sina Weibo microblog account Friday, denied it had forced Jiangsu Aosaikang Pharmaceutical Co. to halt its IPO, saying the decision was made by the company and the underwriter, China International Capital Corp.

    Sources familiar with the matter had earlier said that the CSRC had pressured the drugmaker to postpone, signalling the regulator may not be loosening its control of IPOs despite pledging to allow issuers and underwriters decide timing and pricing.

    Nanjing-based Jiangsu Aosaikang had aimed to raise 4.05 billion yuan by listing on the Shenzhen Stock Exchange’s ChiNext board at a price 21 percent higher than the industry average.

    The maker of digestive and anti-cancer agents Thursday said it planned to sell 55.46 million shares at 72.99 yuan each, equivalent to 67 times its 2012 net profit.

    But in an exchange filing Friday morning, it said it would postpone the sale until an appropriate time because “the proposed issuance was too big.”

    The average price-to-earnings ratio of pharmaceutical companies listed on the ChiNext board is 55.31, while Aosaikang’s new share sale valued the firm at 67 times 2012 earnings. (SD-Agencies)