CHINESE dairy company, China Dairy Corporation Limited, has announced an Australian Stock Exchange (ASX) listing.
The listing is set to position the company for further growth in China and to create a platform for expansion into dairy-producing markets with a focus on Australia.
The company, which will be valued at approximately $A150 million based on the offer price at the maximum subscription level, has milk production from its own resources and exclusive partners in excess of 600 tonnes per day from its herd of more than 40,000 cows.
Based in the agriculture and dairy province of Heilongjiang in the north of China, the company’s operations include production and wholesaling of raw milk and the rearing, breeding and selling of dairy cows.
China Dairy chairman Enjia Liu said the company had profitability of $A40 million NPAT for 2015, a net cash position of more than $A70 million and low balance sheet debt.
“Listing on the Australian Stock Exchange is a key milestone in China Dairy’s history which will herald a new phase of growth for our company as we capitalise on the increase in demand for dairy products in China,” he said.
“We are seeing a voracious appetite for dairy products, spurred by China’s rapidly urbanising population which already consumes more than US$5 billion of imported milk products annually.
“Australia’s dairy industry has an enviable reputation globally and we are keen to work with Australian dairy processors to meet that gap in China.
“With China’s domestic milk production being projected to grow only at 3.3 per cent annually between 2011 and 2020 we, ourselves, will benefit from incorporating Australian technology and techniques to our production capabilities,” he said.
Within China, the company is keen to explore opportunities for product diversification into downstream growth markets, such as liquid milk for children.
The funds raised through the initial public offer would be used to pay costs associated with the offer, develop a new business stream to provide liquid milk for children, and fund working capital requirements.
The offer will raise a maximum of A$20 million, representing 100 million CHESS Depository Interests (CDIs) at A$0.20 per CDI, equivalent to 100 million shares at A$0.20 per share.
The offer is open and will close on January 5, 2016, with trading expected to commence on the ASX on January 15.
BlueMount Capital, with offices in Australia and Asia, is the Australian corporate advisor for the offer.