New Dairy Rushes to Hong Kong Stock Exchange, Are Dairy Enterprises Starting a "Battle Royale" in Southeast Asia?

Ask AI · How can New Hope Dairy’s high debt levels drive a Hong Kong stock listing?

（Author | Zhou Qi Editor | Zhang Guangkai）

On the evening of March 11, a brief announcement from New Hope Dairy’s headquarters dropped a stone into the somewhat dull Chinese dairy industry landscape.

The announcement states that the company plans to issue H-shares and list on the Main Board of the Hong Kong Stock Exchange. If successful, this family-owned dairy company under Liu Yonghao will become the first domestic dairy producer to be listed in both A-shares and H-shares.

However, the reaction from the capital market was a cold shower for this ambition.

The day after the announcement, New Hope Dairy’s stock price hit the limit down intraday and ultimately closed down 9.21%, with a market value evaporating over 1.5 billion yuan.

Investors’ concerns are understandable. In the context of continued low liquidity in Hong Kong stocks and generally pressured valuations for dairy companies, why is New Hope Dairy eager to relist in Hong Kong?

Last June, Zhang Shuai, Vice President of New Hope Dairy, revealed that the company hopes to leverage the global resources of New Hope Group to “lighten the load,” adopting a “half-step ahead” strategy to focus on opportunities in Southeast Asia and other markets.

Currently, giants like Yili and Mengniu are shifting their strategic focus to Southeast Asia, where a “big escape” among Chinese dairy companies is quietly unfolding on this land with nearly 700 million people.

Financial Pressure

The primary goal of New Hope Dairy’s Hong Kong listing is to “raise capital.”

The company’s H-share issuance will not exceed 15% of the total post-issue share capital, and the funds raised will mainly be used for product upgrades, market expansion, supply chain improvements, technological R&D, digitalization, and company operations.

Shen Meng, Executive Director of Sang Sang Capital, straightforwardly states that the purpose of New Hope Dairy issuing H-shares is to raise funds and improve its asset-liability structure.

This judgment is not unfounded.

As an industry consolidator that grew through acquisitions, New Hope Dairy has rapidly expanded from a regional dairy company in Southwest China to a nationwide player by acquiring brands like Yangping, Tianyou, Shuangxi, Nanshan, Xiajin, and Australian Dairy.

According to its official website, the company owns 15 major dairy brands, 16 dairy processing plants, and 12 proprietary farms.

Revenue grew from 5.675 billion yuan in 2019 to 10.987 billion yuan in 2023, successfully entering the “hundred-billion club.”

However, the scale expansion brought by acquisitions also harbors hidden risks.

From 2022 to 2024, New Hope Dairy’s total liabilities were 6.825 billion yuan, 6.299 billion yuan, and 5.736 billion yuan respectively, with current liabilities reaching as high as 4.261 billion yuan, 4.018 billion yuan, and 3.731 billion yuan. The debt-to-asset ratios were 71.91%, 70.47%, and 64.61%, respectively, decreasing to 59.98% by the end of Q3 2025.

More concerning is the risk related to goodwill.

As of the end of Q3 2025, goodwill stood at 1.003 billion yuan, accounting for 27.25% of net assets.

The acquisition of “Yizhi Yogurt Cow” in 2021 is a typical example. After being acquired, the brand suffered losses for two consecutive years, and ultimately, New Hope Dairy had to transfer 45% equity for 148.5 million yuan. This “pitfall” also exposed the high risks of the acquisition model.

In May 2023, New Hope Dairy proposed a “Five-Year Strategic Plan,” clearly shifting its growth source from “internal growth and external expansion” to “mainly internal growth with acquisitions as a supplement.”

Behind this strategic shift is a deep reflection on past acquisition models. The plan aims to reduce the company’s debt ratio by 10 percentage points and double net profit margins over the next five years.

But strategic transformation is easier said than done.

In 2024, New Hope Dairy’s revenue declined by 2.93% year-on-year to 10.665 billion yuan, marking the company’s first negative revenue growth since 2015.

Although in the first three quarters of 2025, revenue increased by 3.49% year-on-year to 8.434 billion yuan, the growth rate has significantly slowed compared to previous rapid expansion.

In the face of overall pressure in the liquid milk market and intense industry competition, New Hope Dairy urgently needs to find new growth engines.

Collective Breakthrough

Going overseas might be the answer for New Hope Dairy.

Currently, the company’s internationalization strategy is divided into “three steps.” The first step is a dual-driven approach of international trade, starting with Chinese supermarkets to penetrate mainstream local retail channels, and B2B support for Chinese tea chain brands; the second step involves cross-border operations and localized marketing; the third step is global management.

According to disclosures, the internationalization strategy targets “differentiated growth opportunities in Southeast Asian flavored milk markets,” which is reasonable given that Southeast Asian consumers prefer sweetened and flavored dairy drinks.

On the other hand, the company’s strategy to support Chinese tea chain brands like Mixue Bingcheng and Tianlala also presents many opportunities.

As these brands accelerate their expansion into Southeast Asia, the demand for high-quality milk bases is increasing. If New Hope Dairy can leverage the group’s overseas resources to establish a “from farm to cup” supply chain advantage, it could open up a blue ocean.

This strategy is not just on paper.

Zhang Shuai stated that the company will fully utilize New Hope Group’s global resource deployment to “lighten the load.” The group has abundant agricultural and pastoral resources overseas, providing unique synergy advantages for New Hope Dairy’s international expansion.

Choosing to “go south” to Southeast Asia is no coincidence.

From the supply side, China’s dairy industry is experiencing a structural winter. Nielsen IQ data shows that by September 2025, dairy sales across channels declined by 16.8% year-on-year.

Raw milk prices remain low, and domestic dairy companies urgently need new growth points.

Southeast Asia is considered a “new continent” for dairy. According to China International Capital Corporation (CICC), the dairy market in six Southeast Asian countries reached $24.7 billion in 2024, but per capita annual dairy consumption is only 11 liters, far below the global average of 28 liters.

This makes Southeast Asia a new battleground for dairy companies.

Yili launched a new ice cream sub-brand, Joyday, in Indonesia as early as 2018, setting up an Southeast Asia Innovation Center there. Its flavored yogurt is exported to Singapore, Thailand, Myanmar, Malaysia, Vietnam, and other countries.

Mengniu, after appointing new CEO Gao Fei, proposed an “integrated two-wing” strategy to accelerate international growth and become a long-term growth engine for the group.

Data shows that Mengniu’s ice cream brand “Aixue” has achieved strong growth, ranking first in Indonesia’s ice cream market and second in the Philippines’ ready-to-eat ice cream market.

In June last year, Fonterra also entered the Southeast Asian market, starting with the Philippines, launching mid-to-high-end fresh milk formula milk powder AceKid, and later expanding to Vietnam, Indonesia, and other countries.

In January this year, Junlebao listed on the Hong Kong Stock Exchange, aiming to step onto the international capital stage. Its products like “Yuexianhuo” have entered Hong Kong and Macau markets, and the company is actively evaluating potential markets in Southeast Asia.

Clearly, New Hope Dairy is also eyeing this opportunity. But internationalization requires capital—more specifically, an international capital operation platform.

While A-shares have strong financing capabilities, they still have limitations in cross-border M&A, foreign exchange management, and attracting overseas investors. Hong Kong, as an international financial center, is evidently better suited for this role.

For New Hope Dairy, listing in Hong Kong may just be the first step. The real test will be whether, once the “grain” is in place, it can carve out a niche in the competitive Southeast Asian market surrounded by giants.