Feihe Limited, China’s leading domestic infant formula manufacturer (assessed by total sales value), successfully listed on the Hong Kong Stock Exchange on November 13, 2019, recording an initial value that would make its shares the most valuable of all China’s listed dairy companies.
Major milestone of Feihe
1962: Founded in Heilongjiang province.
1984: Registered the trademark “飞鹤”.
2009: Listed on New York Stock Exchange becoming first Chinese dairy company to do so.
2010: Launched its first high-end infant formula - 星飞帆.
2013: Delisted on New York Stock Exchange.
2014: Granted manufacturer registration (domestic regulation).
2017: Successfully registered 12 infant formula product lines (36 separate formulae). Also established a manufacturing facility in Kingston Canada
2018: Famous actress Zhang Ziyi signs contract as brand ambassador. Infant formula sales break 10 billion yuan ($1.4 billion) in a single year.
2019: Recognized as one of Top 500 Chinese manufacturers. Listed on HKSE.
According to Chinese food industry expert Mr. Zhu Danpeng, Feihe’s growth has been fast-tracked by governmental support in the forms of preferential policies designed to stimulate domestic enterprise and curtail the growth of overseas companies. In addition, Feihe has successfully leveraged its strong homefield advantage by utilizing both multichannel marketing and multichannel retail and by also being an early adopter of emerging retail channels like social ecommerce, live streaming, and new retail (the combination and integration of offline and online supply chains and offline and online retail and marketing).
Feihe came through the 2008 melamine incident relatively unscathed but still suffered under the post scandal fallout and lingering pervasive perception that Chinese products were unsafe and inferior when compared to products manufactured overseas. Following on from this, Feihe began to prioritize development of middle- and high-end baby and infant formula products and positioned itself towards the premium end of the market, eventually managing to shake off negative consumer perceptions and excel in China’s low-tier cities.
On the first page of its IPO document, Feihe emphasized the importance of offline retail channels particularly “bricks and mortar” baby care and infant nutrition stores. From 2016 to 2019, the number of its distributors and retailers was 58k (2016), 67k (2017), 90k (2018) and 109k (2019).
Further business movements
According to the IPO plan, 40% of the company's IPO funds will be used to repay offshore debt, 20% for potential acquisitions, and 10% for the operation of Canada's Kingston plant. Additionally, 10% is used for R&D of infant formula and nutritional products for overseas markets, and 5% is used for the expansion of Vitamin World, one of the largest nutritional supplement retailers in the United States, acquired by Feihe in 2017.
One spokesman from Feihe said, the company plans to expand its product portfolio and provide new products covering the entire development of infants and mothers.
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