China Huishan Dairy Holdings Co. (06863.HK) has sought to put speculation at rest over the sale of stake in the company by Hong Kong billionaire Cheng Yu-tung.
Cheng offloaded shares to Huishan Dairy’s chairman and chief executive Yang Kai following a specific request from Yang, a senior executive with the Chinese firm said.
Cheng and another major investor sold a combined 8.97 percent stake in Huishan Dairy to Yang recently. The deal was said to be worth HK$2.24 billion in total.
The Hong Kong tycoon, who is currently the honorary chairman of New World Development Co. (00017.HK), had invested in Huishan Dairy before its initial public offering in 2013.
Cheng had been requested to transfer his holding to Yang as it was felt that the move would be beneficial to Huishan Dairy’s share price performance, the Chinese firm’s chief financial officer Su Yonghai said, according to the Hong Kong Economic Journal.
In other comments, Su said that Huishan Dairy has booked 450 million yuan in fair value losses on its cattle stocks for the year ended March, up 68.43 million yuan from a year ago.
The higher charge came amid volatility in the price of raw milk and an increase in the number of retired cows.
Milk prices have now turned stable, currently hovering at around 3,400 yuan per metric ton, after a nine-week fall, Su said.
Huishan Dairy hopes to cash in on rising demand for quality milk in first- and second-tier cities in China, while also tapping into the Yangtze River Delta market for low-temperature dairy products.
A new factory in Jiangsu will commence operation in the third quarter this year.
Translation by Vey Wong
[Chinese version 中文版]
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