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Beijing San Yuan Foods Co. Ltd., China's leading dairy product maker, announced plans last week to float stock on the domestic A-share market.
"With our expanded business scale, we are confident of our future listing," said Li Ning, a marketing official of San Yuan. He declined to reveal the time and size of the offering, however.
As the first step toward going public, the state-owned company recently completed its restructuring program aimed at trans-forming itself into a shareholding firm.
Following the move, San Yuan's current investors, Beijing Enterprises Holding Ltd. and Beijing General Co. Agriculture Industry & Commerce will become its major shareholders.
In addition, Beijing Yanjing Co. Ltd., Beijing Yizhuang Xincheng Industrial Ltd., Tung Hsin Trading Co. Ltd. and Beijing Yanjing Beer Group Co. became its new shareholders.
"San Yuan's restructuring has increased its competitiveness in the dairy market in northern China," said analyst Ding Pin of Haitong Securities.
"By expanding its business, the company may challenge Shanghai Bright Dairy & Food Co. Ltd.'s dominance in the southern region."
With the government's support for animal husbandry development, San Yuan's plan to raise money from the stock market has bright prospects, said Ding.
San Yuan, which supplies 90 percent of fresh milk in Beijing, is also benefiting from the nationwide school-milk project, aimed at increasing milk con-sumption among China's 200 million students.
The company's listing plan followed its acquisitions of foreign and domestic dairy enterprises.
In the past two months, San Yuan bought a 50 percent stake in the Guangdong branch of McDonald's from domestic companies and acquired 85 percent of Beijing Kraft Foods Co. Ltd. from foreign investors.
The company also purchased two dairy production plants in Inner Mongolia.
Established in 1997, San Yuan enjoyed an average annual growth of 40 percent, with last year's sales rising to 800 million yuan (US$96.38 million) from 370 million yuan in 1998.The company expects its turnover to increase to 1 billion yuan this year.
Bright, the country's largest dairy product maker with annual sales estimated at more than 1.6 billion yuan, also plans to sell shares on the domestic market by the middle of this year.
(Eastday.com 01/22/2001)
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