Panda Dairy registers to be listed on stock market 09-27-2020

After submitting its initial public offering registration on August 12, Panda Dairy has been informed by the China Securities Regulatory Commission that it has been approved to be listed on the stock market. 

Panda Dairy, established in 1956, is a large-scale condensed milk manufacturing enterprise in China. The company is mainly engaged in the research, production, sales, of dairy products, as well as servicing of dairy industrial technology. Panda Dairy has earned the titles of “well-known Chinese trademark,” “Specialty of Zhejiang,” and “Traditional product of Zhejiang.”

Panda Dairy’s main products include sweetened condensed milk, evaporated milk, cheese, and vegetable protein drinks. According to statistics from the China Dairy Industry Association, the most famous product of Panda Dairy is Panda Brand Condensed Milk, whose sales volume was second only to Nestle in 2018. Data also showed that during each year from 2016 to the first half of 2020, Panda Dairy’s revenues from dairy products were RMB 409 million, RMB 534 million, RMB602 million, RMB 604 million, and RMB 236million, respectively, with net profits of RMB 85 million, RMB 88 million, RMB 96 million, RMB 68 million, and RMB 11.3 million, respectively. The company’s revenue increased by 10.36% YoY in the first half of 2020.


Panda Dairy previously faced listing difficulties

Panda Dairy has suffered many difficulties in registering to become a listed company. In June 2015, as an unlisted securities company, Panda Dairy’s stock had to be distributed on the over-the-counter market. In October 2016, Panda Dairy submitted its documents for pre-listing tutoring to the China Securities Regulatory Commission of Zhejiang Province, and also signed an IPO cooperation agreement with China Securities Co., Ltd. In 2018, Panda Dairy submitted its IPO registration but then withdrew its documents and decided to suspend the IPO plan. In March 2019, Panda Dairy relaunched its IPO plan and submitted its IPO registration in February 2019, and finally was approved by the China Securities Regulatory Commission.


Panda Dairy mainly dependent on Xiangpiaopiao Food for revenue

However, Panda Dairy is still faced with several challenges. For example, many are concerned with Panda Dairy’s problems with food safety, as well as its dependance on a single key customer, Xiangpiaopiao Food Co., Ltd. (Xiangpiaopiao). According to some news report, Panda Dairy was involved in a dispute regarding food quality with the company Zhongshan Hongchang. On August 20, 2020, Panda Dairy and Zhongshan Hongchang both revealed their confirmation letter to show that there is no such dispute between the companies. The letter stated that from January 1, 2017 to the present, Jiangzhong Diet Therapy Technology Co, Ltd., Zhongshan Hongchang and Panda Dairy did not have any dispute or potential dispute over food safety and food quality.


In addition, Xiangpiaopiao has been a key customer of Panda Dairy. However, Xiangpiaopao suffered a great loss in the first half of 2020. Shenzhen Stock Exchange required Panda Dairy to reveal its financial report of 2020 to show whether the company’s revenue from Xiangpiaopiao dropped rapidly. According to Panda Dairy’s response, the company mainly sells sweetened milk powder in tube packages to Xiangpiaopiao, and the products are mainly sold in the first and fourth quarter of each year. During each month from August to October of 2020, Xiangpiaopiao plans to purchase RMB 7.9 million, RMB 8.5 million and RMB 10.6 million worth of sweetened milk powder in tube packages, respectively. These three periods all show an increase compared to the same periods last year. As a result, there is no risk of decreasing revenue from Xiangpiaopiao.


For more information on China’s dairy market, please check our China Dairy Products News.

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