On July 3, 2019, China Feihe Limited (Feihe), as a leading company in Chinese milk powder industry, submitted a listing prospectus to HKEX (Hong Kong Exchanges and Clearing Limited). On the purpose of further expanding its overseas business based in Hong Kong, Feihe believes that it is a great investment opportunity for the company to be listed on HKEX, so as to achieve constant business growth. In the meanwhile, being listed on HKEX enables the company to recruit more international professionals and to have more effective access to finance opportunities in the capital markets.
Founded in 1962, Feihe is one of the first Chinese enterprises of milk powder industry. For about 50 years, Feihe has been focusing on the manufacturing of milk powder especially for Chinese babies. Having spent a great number of studies about the characteristics of Chinese infants, the company invented the technique and formulation for its milk powder according to the body constitution of Chinese babies.
Feihe also appeared in the capital markets. In 2003, the company was listed on NASDAQ
(National Association of Securities Dealers Automated Quotations), becoming the
one and only Chinese dairy company listed in the USA. After two years, Feihe
transferred to New York Stock Exchange successfully. At the cost of 10-year
efforts, the company finally created a complete industry chain of Chinese milk
powder on the World Gold Milk Source Belt at 47 degrees of north latitude.
At the moment, the company mainly engages itself in production and procurement of all kinds of formula milk powder products for infants, which are basically divided into high-end formula milk powder and ordinary formula milk powder. In the aspect of Feihe‘s high-end formula milk powder, AstroBaby is the major product series of the company.
disclosed in the prospectus, Feihe has been experiencing growth constantly for the
latest three years. The gains of money are respectively RMB 3,724 million in
2016, RMB 5,887 million in 2017, and RMB 10,392 million in 2018, while the
profits are RMB 406 million in 2016, RMB 1,160 million in 2017 and RMB 2,242
million in 2018.
According to the data from a quarter in 2019, Feihe’s gains of money reach RMB 2,756 million and the net profits get to RMB 771 million. The revenue of 2018 even breaks through 10 billion yuan, with a sharp increase by 75% compared to the last year. The growth of net profits reveals a very positive business performance of the company.
It is also reported that most of the income growth comes from the high-end product series of the company. Statistics show that the overall revenue of the company’s high-end product series reached RMB 6,658 million last year. As a representative of high-end series, AstroBaby achieved RMB 510 million as revenue last year, accounting for more than 70% of the overall revenue, with an annual increase rate of 168%.
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