Debt repayment pressure is severe; Billion-dollar New Hope Dairy plans to list in Hong Kong

Why Does New Hope Dairy’s High Dividends Coexist with Debt Repayment Pressure?

Produced by | Damo Finance

Liu Yonghao and Liu Chang’s daughter are about to launch another IPO.

On April 2nd, New Hope Dairy Co., Ltd. (hereinafter “New Hope Dairy”) submitted its application to the Hong Kong Stock Exchange, with Morgan Stanley and CITIC Securities serving as joint sponsors.

New Hope Dairy (002946.SZ) was established in 2001 and incubated by New Hope Group. Starting from Southwest China, it expanded through continuous acquisitions and was listed on the Shenzhen Stock Exchange in 2019. If this Hong Kong IPO succeeds, New Hope Dairy will become the first domestic dairy company to be listed in both “A+H” markets.

Today, New Hope Dairy has grown into a leading domestic dairy enterprise, owning over 20 dairy brands including New Hope, Asahi Weipin, Today Fresh Milk Shop, and Huo Run. According to the prospectus, based on the retail sales of liquid dairy products or low-temperature liquid dairy products in 2025, New Hope Dairy ranks fifth in China’s liquid milk industry and is the top in the Southwest region for low-temperature liquid milk.

In recent years, New Hope Dairy’s overall performance has shown a growth trend. By 2025, the company’s revenue is projected to reach 11.23B yuan, a 5.33% increase year-over-year; net profit attributable to shareholders is expected to be 731 million yuan, up 35.98%.

Low-temperature milk products have been the main driver of New Hope Dairy’s performance growth in recent years. Despite overall pressure in the domestic dairy market, the low-temperature milk segment continues to expand. According to the National Bureau of Statistics, from January to December 2025, the output of dairy manufacturing enterprises in China reached 29.5M tons, a 1.1% decrease year-over-year. Meanwhile, data from Ma Shang Ying Intelligence Station shows that in Q4 2025, sales of domestic low-temperature yogurt and low-temperature pure milk increased by 13.00% and 25.22% respectively year-over-year.

In the low-temperature milk track, New Hope Dairy has seized the industry opportunity. From 2023 to 2025, the company’s revenue from low-temperature liquid milk products increased from 4.93B yuan to 6.05B yuan, accounting for 44.8% to 53.8% of total revenue. In contrast, the revenue and proportion of ambient liquid milk products have been steadily declining.

Looking at shareholding, New Hope Dairy is deeply tied to Liu Yonghao’s family. By the end of 2025, Liu Yonghao and Liu Chang together control 76.49% of the company’s shares. Among them, Universal Dairy Limited, wholly owned by Liu Chang, holds 65.07% of the company; New Hope Investment, wholly controlled by Liu Yonghao, owns 11.42%. In recent years, New Hope Dairy has continuously increased its dividend payout ratio, and with its high shareholding, Liu Yonghao and his daughter can also enjoy substantial dividends. In 2025 alone, they could receive nearly 300 million yuan in cash dividends.

Liu Chang is 46 years old, a Singaporean, and currently serves as a director of New Hope Dairy. She also holds positions as a director of New Hope Group, chairman of New Hope (000876.SZ), and chairman of New Hope Investment.

As of the close on April 3rd, New Hope Dairy’s stock price was 17.80 yuan per share, with a total market value of about 15.3 billion yuan. Since the beginning of 2025, the company’s stock price has increased by 25.13%.

“Cash-strapped” New Hope Dairy

This time, with its Hong Kong listing, New Hope Dairy plans to raise funds to enhance brand positioning and expand sales networks, improve product innovation, biotechnology, and digital capabilities, expand supply chain infrastructure, and supplement working capital.

As it prepares for the Hong Kong listing, market attention has once again focused on New Hope Dairy’s financial condition.

Since its founding, New Hope Dairy has frequently expanded through acquisitions. After its establishment in 2001, it quickly acquired multiple dairy companies such as Kunming Xuelan, Sichuan Huaxi, Anhui Baidi, Hangzhou Shuangfeng, and Qingdao Qinpai, establishing a presence in Southwest China, East China, and North China. After 2015, the company launched a second round of expansion, acquiring brands like Nanshan, Shuangxi, Asahi Weipin, and Sanmu, further penetrating Southwest and East China markets and filling gaps in Central China. In 2020, it spent 1.71 billion yuan to acquire 100% of Ningxia-based Huanmei Dairy.

Through continuous acquisitions, New Hope Dairy’s revenue grew rapidly. Since its IPO in 2019, revenue increased from 5.6 billion yuan to 11.2 billion yuan, nearly doubling. However, the accumulation of brands and subsequent production line construction have burdened the company with heavy capital demands.

For example, in the acquisition of Huanmei Dairy, the transaction price included 1.03B yuan paid in cash, with the remaining 680 million yuan paid via issuance of convertible bonds. The 718 million yuan convertible bonds due in December this year have only seen about 120k yuan converted as of the end of Q1, with the rest still outstanding.

By the end of 2025, New Hope Dairy’s asset-liability ratio is approximately 56.51%. While lower than in previous years, it remains relatively high among leading dairy companies. At the same time, the company’s cash and financial assets amount to about 568 million yuan, but short-term loans and non-current liabilities due within one year total 120k yuan.

In recent years, New Hope Dairy’s debt repayment pressure has continued to increase. The prospectus shows that from 2023 to 2025, the company’s net cash outflows from financing activities were 946 million yuan, 971 million yuan, and 1.09 billion yuan respectively, mainly due to increasing debt repayments. As a result, the company’s overall cash flow turned negative, with figures of 15 million yuan, -47 million yuan, and -66 million yuan over these years.

Notably, while facing debt pressure, the company’s dividend payouts have been rising. At IPO in 2019, annual dividends were 51 million yuan, with a payout ratio of about 21.02%. By 2025, annual dividends reached 387 million yuan, accounting for 52.97% of net profit attributable to shareholders.

By the end of 2025, Liu Yonghao and Liu Chang together hold 76.49% of New Hope Dairy, meaning most of these dividends will flow into their hands. Just in 2025, they could receive nearly 300 million yuan.

For New Hope Dairy, successfully raising funds through the Hong Kong listing could help optimize its debt structure.

Additionally, expanding overseas operations is also one of the goals of this IPO. In previous announcements, the company stated that listing in Hong Kong could meet its business development needs, promote internationalization strategies, build an international capital operation platform, and further enhance its capital strength.

Last June, Liu Shuaijun, vice president of New Hope Dairy, publicly stated that the company would leverage the global resources of New Hope Group to “lighten the load” and focus on opportunities in Southeast Asia with a “half-step ahead” strategy.

New Hope Group Once Faced the Green Jie Controversy

According to official information, New Hope Group was founded by Liu Yonghao in 1982 and has a 44-year history. The group mainly operates in modern agriculture, animal husbandry, and food industries, with world-leading feed production capacity, top-tier meat processing capabilities in China, and is now one of the largest integrated suppliers of meat, eggs, and dairy in the country.

Since 2011, Liu Yonghao, then 60, began gradually delegating authority to his daughter Liu Chang. In 2013, Liu Chang officially took over as chairman of the listed company New Hope.

Currently, Liu Yonghao and Liu Chang control several listed companies, including New Hope, Feima International (002210.SZ), Huarong Chemical (301256.SZ), New Hope Dairy, and New Hope Services (03658.HK). They also previously held stakes in Huachuang Yunxin (600155.SH) and Xingyuan Environment (300266.SZ).

Under Liu Chang’s leadership, the New Hope system has been shifting its development style: selling off traditional assets while investing in emerging industries. For example, in 2024, New Hope sold stakes in six feed subsidiaries including Hainan New Hope, Nanchang Guoxiong, and Nanning Guoxiong, and transferred holdings in two joint ventures, Minsheng Insurance and Qingdao Damu Ren Machinery, raising over 1 billion yuan.

In terms of investments, Liu Chang has focused on emerging industries, with recent investments including IPOs of SF Express Same City, MeinGenomics, and others, as well as frontier tech companies like Xixi Intelligent, a food processing robot firm, and Guanglun Intelligent, a unicorn in data-driven solutions.

It is worth noting that last year’s Shanghai Green Jie food safety incident caused a public relations crisis for New Hope. Green Jie is a subsidiary of Kilcoy Global Foods, which was acquired by New Hope over a decade ago. Liu Yonghao’s family currently holds 45.44% of Kilcoy Global Foods through a trust. Kilcoy Global Foods had attempted to go public twice: submitting an IPO application to HKEX in 2020 without success, and then listing in the U.S. in June 2025. After the Green Jie incident, there has been no further progress.

As the incident unfolded, New Hope responded that it has no equity, management, or business connections with Green Jie. In November 2025, the Shanghai Green Jie Food Safety Incident Investigation Team issued a report revoking Green Jie’s food business license and business registration, and eight responsible persons including the company’s actual controller Zhang Mouhua were lawfully detained.