June 21, 2021
Youran Dairy completes US$644 million Hong Kong listing
China Youran Dairy Group Limited, China's largest integrated upstream dairy player by revenue, debuted on the Hong Kong Stock Exchange on June 18, 2021.
Youran's IPO offering size totaled approximately HK$5.0 billion (US$644 million), giving Youran a total market value of HK$26.5 billion (US$3.4 billion) upon listing. The offering size can be increased to approximately HK$5.7 billion (US$741 million) with exercise of the overallotment option.
Youran's businesses cover the entire upstream dairy value chain, including raw milk products, feed for dairy farms, dairy breeding and other ruminant farming products and solutions, and is today the largest producer of raw milk globally. Founded in 1984, Youran has nearly 40 years of experience in the dairy industry and related R&D, and is formerly a wholly owned subsidiary of Yili, the world's fifth-largest and Asia's largest dairy manufacturer.
PAG has been an investor in Youran since its spin-off from Yili in 2015, and has invested about US$700 million in the company over time.
From 2018 to 2020, Youran has grown its herd size from around 127,000 dairy cows to more than 350,000 cows, and increased annual revenues from ¥6.3 billion (US$919 million) to ¥12.9 billion (US$2 billion). Youran is a leader in organic and specialty raw milk, with its products exceeding quality standards set by the United States, the European Union, Japan and China.
Zhang Xiaodong, chief executive officer of Youran, said: "This IPO is a testament to Youran's impressive growth over the past six years in partnership with Yili and PAG. We are looking forward to using the IPO as a ramp for the company's future growth, and to continue to be a world leader in dairy farming and dairy breeding. We thank our strategic shareholders Yili and PAG for their steadfast support."
PAG partners Suining Xiao, Kevin Xu, and David Qiu said: "We congratulate Youran on their Hong Kong listing and are very pleased with the track record of the company over the years we have worked with them. This IPO is the result of very hard work by Youran's management and we are excited to continue to be a strategic shareholder in Youran as a public company. We believe Youran will continue to be the number one market leader in the upstream dairy space in China and be in the forefront of this industry's rapid development in China."
Yili chairman and CEO Pan Gang said: "We are very pleased with the continued development and growth of Youran Dairy, a strategic affiliate of Yili and with PAG as an investment partner. We're looking forward to continuing Yili's path to be a global leader in dairy products, with Youran as a strategic platform for developing upstream dairy resources."