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Equity Bottom-Up

YuanShengTai Dairy Farm / Equity Bottom-Up

<ul>
 <li>
<a href="https://smartkarma.com/entities/yuanshengtai-dairy-farm-ltd">YuanShengTai Dairy Farm</a> is undergoing a significant financial turnaround, with a dramatic recovery in profitability and margins in the last two fiscal years, following a substantial loss in 2023.</li>
 <li>The company's valuation appears highly attractive compared to its peers, trading at a significant discount on key metrics such as P/E, P/B, and EV/Sales, suggesting a potential mispricing by the market.</li>
 <li>Strategically, the company benefits from its close relationship with China Feihe, a major infant formula producer, which provides a stable and significant demand base for its raw milk production.</li>
</ul>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.


  
YuanShengTai Dairy Farm is undergoing a significant financial turnaround, with a dramatic recovery in profitability and margins in the last two fiscal years, following a substantial loss in 2023.
  The company's valuation appears highly attractive compared to its peers, trading at a significant discount on key metrics such as P/E, P/B, and EV/Sales, suggesting a potential mispricing by the market.
  Strategically, the company benefits from its close relationship with China Feihe, a major infant formula producer, which provides a stable and significant demand base for its raw milk production.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Primer: YuanShengTai Dairy Farm (1431 HK) - Aug 2026

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

China Shengmu Organic Milk / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-shengmu-organic-milk-ltd" target="_blank" data-smartkarma-citation="entities:12714:1" rel="noopener">China Shengmu Organic Milk (1432 HK)</a>’s mandatory offer from <a href="https://www.smartkarma.com/entities/china-modern-dairy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:6785:1" rel="noopener">China Modern Dairy (1117 HK)</a> is HK$0.35, subject to a 50% minimum acceptance condition. The first closing date is 21 July.</li>
<li>I previously opined that meeting the minimum would be challenging. However, based on CCASS data, including acceptances, CMD’s shareholding was 45.69% of outstanding shares as of 10 July.</li>
<li>The offer is on track to be declared unconditional by the first closing date. At the last close and the 30 July payment, the gross/annualised spread is 7.7%/294%.</li>
</ul>



China Shengmu Organic Milk (1432 HK)’s mandatory offer from China Modern Dairy (1117 HK) is HK$0.35, subject to a 50% minimum acceptance condition. The first closing date is 21 July.
I previously opined that meeting the minimum would be challenging. However, based on CCASS data, including acceptances, CMD’s shareholding was 45.69% of outstanding shares as of 10 July.
The offer is on track to be declared unconditional by the first closing date. At the last close and the 30 July payment, the gross/annualised spread is 7.7%/294%.


China Shengmu (1432 HK): Fast-Tracking Towards Being Declared Unconditional

<ul>
<li>On 30 June, the IFA opined that <a href="https://www.smartkarma.com/entities/china-modern-dairy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:6785:1" rel="noopener">China Modern Dairy (1117 HK)</a>’s mandatory conditional cash offer for <a href="https://www.smartkarma.com/entities/china-shengmu-organic-milk-ltd" target="_blank" data-smartkarma-citation="entities:12714:1" rel="noopener">China Shengmu Organic Milk (1432 HK)</a> at HK$0.35 was fair and reasonable. </li>
<li>However, the independent directors' recommendation was not unanimous, with Mr Wang Liyan (Independent non-executive director) dissenting. The first closing date is 21 July. </li>
<li>While meeting the 50% minimum acceptance condition has been aided by the significant derating of peers over the last month, it remains challenging. </li>
</ul>


On 30 June, the IFA opined that China Modern Dairy (1117 HK)’s mandatory conditional cash offer for China Shengmu Organic Milk (1432 HK) at HK$0.35 was fair and reasonable. 
However, the independent directors' recommendation was not unanimous, with Mr Wang Liyan (Independent non-executive director) dissenting. The first closing date is 21 July. 
While meeting the 50% minimum acceptance condition has been aided by the significant derating of peers over the last month, it remains challenging. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-modern-dairy-holdings" target="_blank" data-smartkarma-citation="entities:6785:1" rel="noopener">China Modern Dairy (1117 HK)</a> has received SAMR approval for its acquisition of a 1.28% stake in <a href="https://www.smartkarma.com/entities/china-shengmu-organic-milk" target="_blank" data-smartkarma-citation="entities:12714:1" rel="noopener">China Shengmu Organic Milk (1432 HK)</a>. Completion will occur by 22 May.</li>
<li>Completion will trigger a mandatory cash offer at HK$0.35, conditional on a 50% minimum acceptance condition, which remains an issue, particularly given the significant re-rating of peers. </li>
<li>Nevertheless, in the case of a deal break, the downside is low, as the peer-adjusted undisturbed price is HK$0.37, which is above the last close of HK$0.32.</li>
</ul>



China Modern Dairy (1117 HK) has received SAMR approval for its acquisition of a 1.28% stake in China Shengmu Organic Milk (1432 HK). Completion will occur by 22 May.
Completion will trigger a mandatory cash offer at HK$0.35, conditional on a 50% minimum acceptance condition, which remains an issue, particularly given the significant re-rating of peers. 
Nevertheless, in the case of a deal break, the downside is low, as the peer-adjusted undisturbed price is HK$0.37, which is above the last close of HK$0.32.


China Shengmu (1432 HK): SAMR Approval Finally Secured; Next Up, the 50% Min Acceptance Condition

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The data in this insight is collated from the "shareholding disclosure" link on the HKEx website.</li>
<li>Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.</li>
<li>The key stock mentioned in this regular insight is <a href="https://www.smartkarma.com/entities/china-feihe-ltd" target="_blank" data-smartkarma-citation="entities:24413:1" rel="noopener">China Feihe (6186 HK)</a>
</li>
</ul>


The data in this insight is collated from the "shareholding disclosure" link on the HKEx website.
Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
The key stock mentioned in this regular insight is China Feihe (6186 HK)



Hong Kong CEO & Director Dealings (21 June): China Feihe's CFO Sells Around All-Time Low

China

YuanShengTai Dairy Farm is a dairy farming company primarily engaged in the production and sale of raw cow milk. The company operates dairy cow farms in Heilongjiang and Jilin Provinces, China, supplying raw milk to downstream dairy processors. It was founded in 2008 and is headquartered in Qiqihar, People's Republic of China.

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YuanShengTai Dairy Farm (1431 HK)

Primer: YuanShengTai Dairy Farm (1431 HK) - Aug 2026

YuanShengTai Dairy Farm is undergoing a significant financial turnaround, with a dramatic recovery in profitability and margins in the last two...

αSK Primers

China Shengmu (1432 HK): Fast-Tracking Towards Being Declared Unconditional

The offer is on track to be declared unconditional by the first closing date. At the last close and the 30 July payment, the gross/annualised...

Arun George

China Shengmu (1432 HK): Touch and Go

CCASS movements show that 536,097,305 shares (6.40% of outstanding shares) have been tendered today, which exactly matches EQT’s shareholding (the...

Arun George

China Shengmu (1432 HK): SAMR Approval Finally Secured; Next Up, the 50% Min Acceptance Condition

The 50% minimum acceptance condition remains an issue, particularly given peers' significant re-rating. Nonetheless, the downside on a deal break...

Arun George

Hong Kong CEO & Director Dealings (21 June): China Feihe's CFO Sells Around All-Time Low

Feihe is cheap. It's not at all clear why Lin Hua would opt to kick out a chunk of his stake at these levels. Valuation-wise, I'd be getting some...

David Blennerhassett

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