YST Dairy fixes IPO price in bottom half of the range

The Chinese raw milk producer raises $426 million at a valuation of 17 times forward earnings, while investors look ahead to the larger offerings from Cinda Asset Management and Qinhuangdao Port due next week.

YuanShengTai Dairy Farm, better known as YST Dairy, has priced its Hong Kong initial public offering at HK$2.70 per share, resulting in a total deal size of HK$3.3 billion $426 million.

The price was fixed in the lower half of the HK$2.49-HK$3.18 range despite sources saying the deal was multiple times subscribed. There is also a lot of positive momentum in China’s dairy sector at the moment on the back of the government’s announcement last week that it plans to relax its one-child policy.

The thinking is that this may increase the demand for baby formula, which is a key product...

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