State-Owned SDIC Invests USD30.8bn in BGI Genomics

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State-owned SDIC has invested RMB200m into Chinese biotechnology firm BGI Genomics [300676:CH], as reported by Reuters on February 22. SDIC purchased 1.4m shares in BGI via its Central SOE Poverty Area Industrial Investment Fund run by its wholly-owned venture capital subsidiary SDIC Chungyi. The deal was part of BGI’s USD300m fundraising private placement round in which other investors included state-owned securities firms Huatai Securities [6886:HK] and China Merchant Securities [600999:CH]. SDIC Chuangyi chairman Wang Weidong stated that the investment is part of the government’s strategy to alleviate poverty through better healthcare and fighting the pandemic. In a February 1 filing, BGI stated that it will use the new funds to reduce pressure on working capital, upgrade genetic data storage capacity and build biological sample banks.

The investment comes after US security agencies have warned American health firms against using BGI’s and other Chinese COVID-19 testing technologies citing national security and data privacy concerns. BGI had repeatedly denied any links to Beijing. BGI recently stated that its controlling shareholders remain private enterprises and that SDIC only holds a 0.3332% stake in the firm, which gives it no voting powers and no significant influence on its operations. The SDIC Chuangyi fund has recently also invested in other pharmaceutical distribution firms, lithium battery raw materials suppliers and restructured China’s largest railway materials firm.

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