We are one of the top five dairy farm operators in China, ranking third, fourth and fifth among all dairy farm operators in China in terms of sales volume, sales value and production volume of raw milk in 2021, with a market share of 1.6%, 1.8% and 1.7%, respectively, according to Frost & Sullivan. We provide premium raw milk to a well-diversified customer base of downstream dairy product manufacturers. We have a diverse customer base, ranging from leading national and regional dairy product manufacturers (including Mengniu (蒙牛), Bright Dairy (光明), Meiji (明治), Junlebao (君樂寶), New Hope Dairy (新希望乳業), Jiabao (佳寶) and Classykiss (卡士)), to emerging dairy brands (such as Chi Forest (元氣森林) and Honest Dairy (簡愛)), and we are not reliant on our Controlling Shareholders as our downstream customers. We are valued by our customers for our stable supply of high-quality and traceable raw milk in a large scale, which has enabled our customers to promote their various high-end milk product offerings catering to end customers. In 2019, 2020, 2021 and the six months ended 30 June 2021 and 2022, we produced approximately 565,400 tons, 582,800 tons, 638,800 tons, 298,300 tons and 359,200 tons of raw milk.
We are the first dairy farm operator in China to design, build and operate large-scale and standardised dairy farms with over 10,000 heads of dairy cows, according to Frost & Sullivan. Leveraging the know-how and expertise gained from our parent Japfa Group’s experience in Indonesia since 1997, we commenced our own dairy farming operations in China in 2009. As of the Latest Practicable Date, we owned and operated ten dairy farms in China, with an aggregate gross land area of approximately 14,657 mu. As of 30 June 2022, we had a total herd size of 111,424 heads of dairy cows, 57,383 of which were milkable cows.
We have achieved and consistently maintain high operational efficiency and product quality as evidenced by the average milk yield we achieved. According to Frost & Sullivan, we have been ranked No. 1 in China in terms of average milk yield per milkable cow, the key indicator of the productivity and efficiency of dairy farms, for seven consecutive years from 2015 to 2021. In 2021, our annualised average milk yield per milkable cow reached 12.7 tons/year, far exceeding the industry average of 8.7 tons/year and the average of the top five dairy farm operators in terms of annualised average milk yield per milkable cow in China of 11.5 tons/year. In terms of individual dairy farm ranking in 2019, 2020 and 2021, we had six, seven and five dairy farms, respectively, ranked among the top ten large-scale dairy farms with over 10,000 heads of dairy cows in China in terms of annualised average milk yield per milkable cow, according to Frost & Sullivan. Our raw milk quality has continuously surpassed market standards based on various key quality indicators such as fat content, protein content, aerobic plate count and somatic cell count.
We have established an integrated and synergistic business model. Driven by the increasing demand for beef in China, we have developed our beef cattle business in China since 2018. We leverage the established standard operating procedures and experience from our dairy farming operations to build our beef cattle farming operations. We have further improved the productivity of our beef cattle and achieved cost efficiencies through economies of scale and optimisation of resources such as shared land and our team of technical experts. As of 30 June 2022, we owned and operated two large-scale beef cattle feedlots in China with 28,152 heads of beef cattle, 26,566 of which were Holstein beef cattle. According to Frost & Sullivan, we were the eleventh largest beef cattle farming company in China in terms of the number of beef cattle as of 31 December 2021, with a market share of 0.03%.
We are committed to building a sustainable business and minimising our operational impact on the environment. We have adopted a series of comprehensive and effective measures to identify, assess, manage and reduce the risk relating to environmental, social and governance (“ESG”) issues. Our farms are equipped with waste recycling and treatment facilities as well as technology to reduce greenhouse gas (“GHG”) and air emissions. We also aim to reduce the average GHG emission per ton of raw milk produced by improving our operational efficiency and milk yield. We also place significant importance on animal welfare, as we believe that happy cows and cattle produce more milk and meat of a higher quality.
We have experienced rapid growth over the Track Record Period. The increase in China’s milk consumption and the emergence of new dairy brands in recent years has driven demand for premium dairy products and quality raw milk supply. In addition, the increased demand for beef in China has driven demand for our beef cattle. Our revenue from continuing operations increased from US$351.5 million in 2019 to US$521.9 million in 2021, representing a CAGR of 21.9%, and increased by 15.4% from US$241.2 million in the six months ended 30 June 2021 to US$278.3 million in the six months ended 30 June 2022. Our EBITDA from continuing operations, a non-IFRS measure, was US$104.4 million, US$130.4 million, US$149.9 million, US$99.2 million and US$57.8 million in 2019, 2020, 2021 and the six months ended 30 June 2021 and 2022. Our net profit from continuing operations was US$74.6 million, US$99.1 million, US$104.6 million, US$80.0 million and US$29.8 million in 2019, 2020, 2021 and the six months ended 30 June 2021 and 2022. Our adjusted net profit, a non-IFRS measure, was US$75.5 million, US$104.0 million, US$120.6 million, US$85.9 million and US$41.3 million in 2019, 2020, 2021 and the six months ended 30 June 2021 and 2022. See “Financial Information – Non-IFRS Financial Measures”.
The Listing will constitute a spin-off from Japfa Ltd, which is listed on the Mainboard of the SGX-ST. Japfa Ltd is the holding company of the Japfa Group, which is a pan-Asian industrialised agri-food group with operations in Indonesia, Vietnam, India, Myanmar and Bangladesh.
Source: AustAsia Group (02425) Prospectus (IPO Date : 2022/12/16) |