Baby formula maker China Feihe seeks up to $1.14b in Hong Kong IPO

Photographer: Justin Chin/Bloomberg

China Feihe Ltd., a baby formula producer, started taking investor orders on Monday for its Hong Kong initial public offering which could raise as much as HK$8.9 billion ($1.14 billion).

The Beijing-based company is offering 893.3 million shares at HK$7.50 to HK$10 apiece, according to terms of the deal obtained by Bloomberg. The price range implied a market value of $8.5 billion to $11.4 billion, the terms show.

The offering would at least be Feihe’s second attempt to conduct an IPO in Hong Kong. It had applied for a listing in the city in May 2017. The dairy company went private from the New York Stock Exchange in 2013 amid a wave of delistings by U.S.-traded Chinese firms.

China’s baby formula industry met its watershed moment in 2008 when a tainted milk scandal killed six children and poisoned 300,000 others, spurring demand for products by international firms over locally-produced ones. The country, in a bid to restore consumer confidence, in June released a plan to increase the output of homegrown baby formula.

The government aims to achieve 60% self-sufficiency rate along with improving quality and bolstering consumer confidence for domestic brands in the country’s $27 billion infant-formula industry. The newly-announced plan will also support domestic dairy producers in acquiring or setting up overseas bases for milk supply as well as tightening regulations on milk-powder imports and online sales platforms.

Feihe plans to use the proceeds for purposes including offshore debt repayment, potential acquisitions and funding the operation of a new manufacturing plant, the terms show. The company is expected to stop taking investor orders Nov. 5 before beginning trading on Nov. 13.

JPMorgan Chase & Co, China Merchants Securities Co Ltd., CCB International Holdings Ltd. are joint sponsors of the offering, according to a preliminary prospectus.

Bloomberg

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.