IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

China Youran Dairy Group IPO: Valuation First-Look

China Youran Dairy Group IPO: Valuation Insights

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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.

Equity Capital Markets

China Youran Dairy Group Ltd / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/china-youran-dairy-group-ltd" target="_blank" data-smartkarma-citation="entities:31075:1" rel="noopener">China Youran Dairy Group Ltd (1836774D CH)</a> is the world’s largest raw milk provider as measured by herd size of dairy cows as of 30 June 2020 and raw milk production volume in 1H20, according to Frost &amp; Sullivan. Youran was once a wholly-owned subsidiary of <a href="https://www.smartkarma.com/entities/inner-mongolia-yili-indus-a" target="_blank" data-smartkarma-citation="entities:3220:1" rel="noopener">Inner Mongolia Yili Industrial Group (A) (600887 CH)</a> until PAG Capital’s investment in 2015. Yili has remained as one of the controlling shareholders and owns 40.0% of the outstanding shares. Youran is pre-marketing an HKEx IPO to raise $800 million, according to press reports. </p><p>The downstream dairy value chain in China is highly concentrated with the top five dairy manufacturers by retail sales value of dairy products accounting for a combined market share of 73.5%, according to Frost &amp; Sullivan. The concentrated downstream dairy value chain is driving the need for upstream suppliers such as Youran with a larger scale and broader footprints. Raw milk demand for dairy consumption in China has outstripped raw milk supply over the years, and the shortfall in supply is expected to reach 21.0 million tons in 2025, according to Frost &amp; Sullivan.</p><div class="content-highlight"><p>Notwithstanding its high revenue dependence on Yili, Youran is capitalising on this market opportunity by delivering strong organic growth (on a pro-forma basis), rising margins and accretive acquisitions. Overall, we believe that Youran is worth a look.</p></div>

China Youran Dairy Group Ltd (1836774D CH) is the world’s largest raw milk provider as measured by herd size of dairy cows as of 30 June 2020 and raw milk production volume in 1H20, according to Frost &amp; Sullivan. Youran was once a wholly-owned subsidiary of Inner Mongolia Yili Industrial Group (A) (600887 CH) until PAG Capital’s investment in 2015. Yili has remained as one of the controlling shareholders and owns 40.0% of the outstanding shares. Youran is pre-marketing an HKEx IPO to raise $800 million, according to press reports. The downstream dairy value chain in China is highly concentrated with the top five dairy manufacturers by retail sales value of dairy products accounting for a combined market share of 73.5%, according to Frost &amp; Sullivan. The concentrated downstream dairy value chain is driving the need for upstream suppliers such as Youran with a larger scale and broader footprints. Raw milk demand for dairy consumption in China has outstripped raw milk supply over the years, and the shortfall in supply is expected to reach 21.0 million tons in 2025, according to Frost &amp; Sullivan.Notwithstanding its high revenue dependence on Yili, Youran is capitalising on this market opportunity by delivering strong organic growth (on a pro-forma basis), rising margins and accretive acquisitions. Overall, we believe that Youran is worth a look.

Inner Mongolia Yili Industrial Group (A) (600887 CH)

China Youran Dairy Group IPO Initiation: Ecownomics