Investors bank on Chinese dairy firms as domestic demand to soar

Huishan Dairy plans to raise up to $1.3bn (€1bn) in a Hong Kong initial public offering to fund its expansion, with the world’s No 2 economy expected to catch up with its Asian peers in the consumption of infant formula, yoghurt and fresh milk.

Investors have bought up shares of companies including China Modern Dairy and China Mengniu Dairy, betting that the country’s huge consumer market will fuel China’s long-term intake of milk products.

China’s current per capita dairy consumption rate of 23 kilograms is less than half of its Asian neighbours, according to Macquarie.