Fresh Milk For China's Largest Domestic Infant Formula Maker
The nation's biggest infant-formula maker China Feihe Ltd. is buying its largest milk supplier. The formula producer has courted YuanShengTai Dairy Farm Ltd. for 10 years, according to a statement from China Feihe.
China Feihe banked on the fame of movie star Zhang Ziyi as a celebrity endorsement and was listed in Hong Kong in November where it raised HK$6.7 billion ($860 million). It offered HK$3.07 billion for YuanShengTai at HK$0.63 a share in cash.
The manufacturer's stock price rose to HK$17 per share Monday - more than twice its initial public offering price. At close of play Tuesday it was at HK16.40 per share.
Securing milk supply is crucial for China Feihe. Any disruptions might delay production and reduce sales. China Feihe said after the takeover it would become the controlling shareholder of YuanShengTai but it would not delist the supplier.
China Feihe is one of the few domestic manufacturers to produce infant milk formula using fresh milk. Between 2016 and 2019 nearly 80 percent of China Feihe's fresh milk was purchased from YuanShengTai.
Other big China dairy companies such as China Mengniu Dairy Co. Ltd. and Inner Mongolia Yili Industrial Group Co. Ltd., have been looking to secure supplies of raw milk through company takeovers, too.
5G Rollout Exceeds 2020 Targets
China has surpassed its building targets for 5G base stations and, therefore, the number of 5G subscribers will likely reach 100 million by the end of this year, Securities Daily reported.
To date, there are 60 million 5G users in China and that will increase because commercial companies are pushing 5G technology applications, according to the Ministry of Industry and Information.
Mobile carriers China Mobile Ltd. China Telecommunications Corp. and China United Network Communications Group Co., Ltd., or China Unicom, have to date built as many as 480,000 5G base stations. That is expected to reach 750,000 to 800,000 by the end of this year, according to the report. It outpaced an earlier target of 500,000 5G base stations by 2020.
These companies sought 5G certification in advance and received licenses in June last year, according to a telecommunications source. There will be an estimated 100 million people subscribed to 5G domestically this year, the source told the Securities Daily.
Local governments used incentives to speed 5G base station construction. In Shenzhen, for example, operators received 10,000 yuan for each 5G base station installed. Shenzhen claims it is the first city fully covered with 5G networks.
Former Streaming Video Leader Gets Top Fine
LeTV was previously one of the biggest streaming video companies in China. It has been delisted and is currently embroiled in a debt crisis. Now the former industry leader has been slapped with a hefty fine from China's top securities watchdog.
The company said late Monday it received an "Administrative Punishment and Market Banning Advance Notice" issued by the China Securities Regulatory Commission for illegal information disclosure and the fraudulent issuing of company stock.
The CSRC hit LeTV with its biggest fine - 240 million yuan ($35.13 million). That is 5 percent of the funds the company raised through the stock market.
The CSRC reportedly investigated LeTV in April last year. The announcement didn't disclose details about LeTV's illegal information disclosure and fraudulent stocks.
LeTV was delisted from the A-share stock market July 21 and stopped trading the day before with its share price at 0.18 yuan ($0. 026) and total market value at 718 million yuan.
As of this June, the company reported 20.85 billion yuan in debt and a net asset value of negative 14.62 billion yuan.
Chip Maker In Shock After U.S. Trade Ban
China's biggest chip manufacturer Semiconductor Manufacturing International Corp. is "in complete shock" as it watched its share price fall after the U.S. announced SMIC could be next on the U.S. government's trade blacklist.
