CDH-backed Dali Foods seeks $1.3b HK IPO

Dali will sell about 1.7 million newly-issued shares at HK$6.15 apiece, according to the prospectus. The shares will represent about 12.4% of the company's post-IPO share capital. All of the existing shareholders, including CDH, will retain their stakes in a bid to boost confidence among new investors. 

Most of the proceeds of the offering, about HK$5.49 billion, will be split evenly between development of new products, expansion of manufacturing capacity, and enhancement of sales and marketing channels. Another HK$2.7 billion will be spent on acquisition and collaboration opportunities, with the remainder marked for working capital and general corporate purposes.

Founded in 1989 as Hui'an Meili Minzheng Food Factory, Dali has grown from a Fujian-based biscuit factory into one of China's leading manufacturers of branded snack foods and beverages. The company holds a market-leading position in each of its six product categories, according to a report by Frost & Sullivan.

For the year ended December 2014, Dali reported revenue of RMB14.9 billion ($2.3 billion), up from RMB12.8 billion the year before; over the same period, net profit rose from RMB1.2 billion to RMB2.1 billion.

CDH has been an investor in Dali since September 2014, when it bought a 1% stake in the company for RMB813,000. The firm raised its holding to 3% in the company's pre-IPO round earlier this year for RMB1.1 billion.

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• Topics
• Greater China
• Consumer
• Investments
• China
• Hong Kong (China)
• IPO
• CDH Investments Management
• Consumer