Pine Agritech launches share issue

By Lee Su Shyan
May 04, 2005
The Straits Times

PINE Agritech, which makes soya bean-based products in China used in the food processing industry, has launched its initial public offering (IPO) to raise net proceeds of $80.7 million.

Its largest shareholder with a 49 per cent stake is mainboard-listed People's Food, which is involved in pig slaughtering and meat processing.

Pine Agritech, which is aiming for a mainboard listing, says that it plans to pay out a dividend of at least 20 per cent of its net profit for this financial year and the next.

For the year ended Dec 31, the firm estimates that it made a pre-tax profit of 136.9 million yuan (S$27.5 million), a 48 per cent increase over the previous year.

Located in Linyi city in eastern China's Shandong province, Pine Agritech makes and sells soya bean-based food products such as soya bean oil and soya protein isolates. These products are used in foods ranging from sausages to infant formula.

Chief executive Li Zhuping said: 'We believe that we are well-positioned to be an industry leader in China.'

The group believes that China will continue to be one of the largest producers and consumers of soya bean products in the world.

It is also confident that with growing affluence and increasing awareness of healthy living, demand for such products will increase.

Another soya bean player listed here is Celestial NutriFoods.

The offer comprises 150 million new shares at 57.5 cents each. Five million shares will be offered to the public.

On listing, Pine Agritech's market capitalisation is expected to be about $345 million.

The net proceeds will be used to increase its production capacity, to expand its marketing and distribution network, and to pay off loans.

The issue opens at noon today and closes next Tuesday. Trading is expected to start on the Singapore Exchange on May 12.