New Dairy plans to list on the H-share market; why did the A-share stock price hit the limit down during trading?

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来源：Cai Seng

Image source. This article is from: First Financial Author: Luan Li

Why Did Xinruye’s H-Share Listing Plan Cause Its A-Share Stock Price to Drop to the Limit During Trading?

On the evening of March 11, Xinruye (002946.SZ) announced its plan to issue H-shares and list on the Hong Kong Stock Exchange. After the market opened today, Xinruye’s stock price plummeted rapidly, hitting the limit down during trading.

Re-financing through the Hong Kong market is also one of the main financing methods for domestic companies, but industry insiders speculate that currently, the Hong Kong market’s attention to the dairy industry is low, and there may be market concerns.

According to the announcement, to meet the company’s business development needs, deepen the internationalization strategy, build an international capital operation platform, and further enhance the company’s capital strength, Xinruye plans to issue overseas listed foreign shares (H-shares) and list on the Main Board of the Hong Kong Stock Exchange. The scale of Xinruye’s H-share issuance will not exceed 15% of the total share capital after issuance, with an over-allotment option granted. The funds raised will mainly be used for product upgrades, market expansion, supply chain upgrades, technological R&D, digital construction, and company operations.

In recent years, as domestic market competition intensifies, internationalization has become a key focus for domestic dairy companies, especially in Southeast Asia. Companies like Yili, Mengniu, Feihe, and Junlebao are all expanding into this region. At the 2025 Investor Conference, Xinruye’s management stated that they are seeking to go global and create a second growth curve, targeting the differentiated growth opportunities in Southeast Asia’s flavored milk market. Southeast Asia has nearly 700 million people, with per capita liquid milk consumption generally below 20 kg/year, leaving huge room for growth.

However, after today’s market open, Xinruye’s stock price continued to decline, closing before noon at 17.9 yuan per share, down 9.91%.

According to Shen Meng, Executive Director of Xiang Song Capital, currently, there are generally two situations for A-share listed companies to go public in Hong Kong: one is to support the construction of Hong Kong as an international financial center and expand Hong Kong’s financial market business, mainly involving top-tier large A-share companies; the other is due to industry restrictions and difficulties in refinancing in A-shares, so they issue H-shares for moderate financing. Xinruye is more likely to fall into the second category. However, from the current perspective, the H-share market is not very enthusiastic about dairy companies, and financing costs and issuance prices may be affected, leading to market concerns.

Independent dairy industry analyst Song Liang said that over the past decade, Chinese dairy companies have accelerated supply chain construction and established modern breeding and industrial systems. Currently, the industry is shifting from basic nutrition to functional nutrition, which requires substantial capital. Although Hong Kong stock financing capacity is weaker, the listing threshold is lower than A-shares, and it also provides long-term benefits for the next stage of internationalization development.■

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Editor: Yang Hongbu