The Wuhan-based food additives producer, which wasn’t approved for listing on the ChiNext in 2017, is trying its luck again. This time – on the Shanghai Stock Exchange Sci-Tech Innovation Board.
The STAR Market, a new Shanghai Stock Exchange-based venue, is aimed at giving local hi-tech companies broader access to multiple sources in order to fund their businesses. It was launched a month ago and is expected to start trading on July 22 with the first batch of 25 companies debuting on the board.
CABIO Biotech (Wuhan) Co., Ltd. (嘉必优) is a leading food manufacturer specializing in arachidonic acids, algal oils, carotenes and other products. The company filed for an initial public offering on the STAR board on April 29. It is the only firm representing the food industry among the 148 applicants, as of today.
It is worth mentioning that the firm has already submitted an IPO application in China: two years earlier it made an attempt to get listed on the Shenzhen Stock Exchange-based Nasdaq-style ChiNext board. At that time, CABIO didn’t pass the approval process.
CABIO’s Wuhan factories are concentrated around the production of DHA (docosahexaenoic acid) and ARA (arachidonic acid), synthesized versions of the essential fatty acids that are naturally found in breast milk. Those are the key components of various infant formula produced around the world.
The firm generated operating revenue of CNY 286 million (USD 41.6 million) last year, the indicator soared 25% from 2017’ record. Gross profit margin had raised from 46.45% to 48.94% over the same period.
According to an online provider of market and consumer data Statista, baby food market size in China amounted to CNY 17 billion (USD 2.5 billion) last year. The market is expected to grow annually by 4.2% and reach CNY 21.5 billion (USD 3.12 billion) in 2023.