Chinese Lactic Acid Products Maker Jindan Floats $90m IPO On ChiNext

Henan Jindan Lactic Acid Technology, a Chinese producer of lactic acid products, has garnered 638 million yuan ($90 million) in an initial public offering (IPO) on Shenzhen’s startup board ChiNext on Wednesday.

The company, which exports over 30 per cent products, sold 28.3 million shares at a price of over 22.53 yuan ($3.18) apiece in the offering. It reached a market capitalization of over 3.66 billion yuan ($517 million) on the debut date.

Jindan, incorporated in August 2006, mainly manufactures lactic acid, calcium lactate, sodium lactate, ethyl lactate and other products for clients in China over 80 countries and regions worldwide. The company is based in Zhoukou City in central China’s Henan Province, one of China’s largest areas for growing corns, which is the raw material for the natural fermentation process in the production of lactic acid.

Its offerings of lactic acid and related products claimed a global market share of 18.34 per cent in 2018, according to London-based global information provider IHSMarkit.

Before the IPO offering, Guangzhou-based Chengxin Venture Capital (CXVC) was the second-largest shareholder of Jinda with an 8.81 per cent stake, only after the company chairman Zhang Peng who held 43.62 per cent shares.

Shouzhong Fund, an education-focused vehicle managed by Chinese private equity firm First Capital Fund, had a 7.72 per cent stake in Jindan.

The company registered a revenue of 878 million yuan ($124 million) in 2019, up 9.48 per cent from 802 million yuan ($113 million) in 2018. The net profit was 113 million yuan ($16 million) in 2019, representing a 35.83 per cent growth compared to the year earlier, according to its prospectus.

According to Chinese business information platform Tianyancha, Jindan raised 120 million yuan ($17 million) in a Series A round from Chinese government-led Shenzhen Captial Group, state-owned China Venture Capital, and CXVC in September 2010.

Shares of Jindan are floated under the symbol “300829.”