Blog: Dean BestNZ dairy Synlait Milk makes solid debut on stock market

Dean Best | 23 July 2013

Down in New Zealand today, dairy ingredients and infant formula firm Synlait Milk took its bow on the country's stock exchange - and its shares finished significant above the IPO price.

Synlait's shares closed at NZ$2.74 when trading finished, up sharply from the listing price of NZ$2.20.

The company launched the listing to fund a series of programmes that it says will speed up the growth of its nutritionals products and infant formula businesses. Synlait is, for instance, investing to improve its production of lactoferrin. The move follows contract wins with YinQiao Xi'An, the largest dairy manufacturer in north western China, Bright Food and New Zealand milk firm A2 Corp. Demand for lactoferrin is being driven by the rapid expansion of the Chinese infant formula market.

And it is the prospects for Synlait in Asia that has likely got investors interested in driven up its shares today. Synlait will face intense competition from a raft of dairy companies, not least those in its own backyard like New Zealand's Fonterra and Australia's Murray Goulburn.

But investors are betting Synlait can milk the buoyant dairy markets in Asia and can look to the likes of China's Bright Dairy (which retains a 39% stake in the company) and FrieslandCampina (which snapped up a chunk of the business ahead of the IPO) which have put their money that it can.


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