March 5, 2004

China's Mengniu Dairy Co. To Be Listed On Hong Kong Stock Exchange In Mid April 2004

An eFeedLink Exclusive Report
 

China's largest private producer of dairy products, Inner Mongolia Mengniu Dairy Co. Ltd, is finally going for public listing on the Hong Kong Stock Exchange and has already engaged BNP Paribas Peregrine to handle its Initial Public Offering (IPO). Should this be successful, Mengniu will be able to raise HK$1.5-1.6 billion. Insiders expect Mengniu's public listing to take place in mid April 2004.
 

Mengniu is China's largest dairy milk producer, with more than 300,000 dairy cows producing 800,000 tons of milk annually. Established in 1999, Mengniu's turnover was only RMB43 million during that year. However, by end 2003, the dairy company's sales earnings have exceeded RMB5.1 billion, with a net profit of RMB180 million.

Mengniu's shareholders comprise over thirty of its key managerial staff. Mr Niu Gensheng, Mengniu Group's chairman and the single largest shareholder, holds 10% of the shares.     

It is reported that US leading investment bank, Morgan Stanley, has invested RMB480 million in Mengniu, making the dairy producer its largest direct investment in China.

Recently, Mr Niu Gensheng has just approved two liquid-milk production projects in Tangshan Fengrun and Luannan regions in Heibei province, which are expected to require an investment capital of RMB700 million.

Specifically, RMB400 million will be allocated to the production plant in Tangshan Fengrun region in Heibei province, which is capable of processing, on average, 600 tons of fresh milk daily with an annual achieved output value of up to RMB1 billion.

On the other hand, the liquid-milk production plant in Luannan County in Heibei province will have twenty production lines, with an annual production capacity of 200,000 tons of liquild milk. The production plant is expected to commence production in May 2004.