Huishan Dairy Surges After Explaining Investors’ SalesStephanie Wong
China Huishan Dairy Holdings Co., the milk producer backed by billionaire Cheng Yu-tung, jumped the most in almost seven months after saying investors’ share sales were unrelated to its operations.
The shares climbed 6.7 percent to close at HK$1.76, the biggest gain since Oct. 3, 2013. Huishan dropped 23 percent in the previous four trading days and remains below last year’s initial public offering price of HK$2.67.
Investors An Yu Investments Ltd. and Spring Harvest Ltd., a unit of Swiss food company Hero Beteiligungen AG, have sold stakes after investing in Huishan’s initial public offering, the company said in a statement. Huishan also said it’s in preliminary talks to form joint ventures to make and sell dairy products.
“Both An Yu and Hero informed the company that their respective disposal of shares was based on their own investment decisions and are unrelated to the group’s business operations,” Huishan, based in Shenyang city in northeast China, said in the filing.
An Yu sold a 2 percent holding while Hero sold a 3.6 percent stake, according to the statement.
The stock had plummeted 9.8 percent yesterday on concerns that investors’ share sales may continue.
Investors in the company, including An Yu, had agreed not to sell their shares within six months of the Sept. 27 listing, according to Huishan’s prospectus.
Huishan, which raised a $1.3 billion from its IPO last year, was established in 2009 as a raw milk producer, and has moved into the business of selling liquid milk and milk powder products, grain processing and trading.
The company signed a facility letter with the Macau branch of the Bank of China Ltd. to borrow $50 million to refinance the bank loans with higher interest rates in China, it said yesterday.
The company owned more than 106,000 dairy cows, the second-largest herd in the nation, as of end 2012, the company said in its prospectus, citing researcher Frost & Sullivan.