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KGF is one of the largest importers of premium beef in China. The demand for premium beef in China is expected to stay strong which should benefit the company's longer term prospects.
KGF was setup in 2013 and has since grown via a series of acquisitions. It is backed by New Hope Liuhe (000876 CH). Since acquiring the different companies, KGF has already undertaken one round of capacity upgrades. The company plans to further augment its capacity via using the proceeds from the IPO. This should aid in near to mid-term growth.
However, it's not just one company. The company appears to have been put together via a series of acquisition of distinct companies across geographies. Apart from addressing similar markets, what exact synergies have been derived from putting these companies together remains unclear. It also appears that a large part of the gross margin expansion was owing to a drop in cattle prices in Australia, which might reverse post the drought and bushfires onslaught.
Kilcoy Global Foods Pre-IPO - Rising margins fuel earnings but a lot of loose ends still remain unexplained
Kilcoy Global Foods (KGF) plans to raise up to US$400m in its Hong Kong listing. KGF is a premium food solutions provider with a focus on premium beef and other high quality animal protein products. KGF has operations and processing facilities located across Australia, China and the United States.KGF is one of the largest importers of premium beef in China. The demand for premium beef in China is expected to stay strong which should benefit the company's longer term prospects.
KGF was setup in 2013 and has since grown via a series of acquisitions. It is backed by New Hope Liuhe (000876 CH). Since acquiring the different companies, KGF has already undertaken one round of capacity upgrades. The company plans to further augment its capacity via using the proceeds from the IPO. This should aid in near to mid-term growth.
However, it's not just one company. The company appears to have been put together via a series of acquisition of distinct companies across geographies. Apart from addressing similar markets, what exact synergies have been derived from putting these companies together remains unclear. It also appears that a large part of the gross margin expansion was owing to a drop in cattle prices in Australia, which might reverse post the drought and bushfires onslaught.
Underlying
Kilcoy Global Foods
Provider
Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Sumeet Singh
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