Japfa's acquisition of China dairy farms will expand capacity that will benefit from higher raw milk prices: CGS-CIMB

CGS-CIMB Research analyst Tay Wee Kuang is upbeat on Japfa following its announcement of the acquisition of two dairy farms located in Shandong, China for US$123.4 million ($166.10 million) on June 28.

Japfa’s 75%-owned subsidiary AusAsia Investment Holdings will acquire the entire issued capital for Falcon Dairy Holdings (Falcon) for US$123.4 million ($165.5 million). Falcon holds 100% interest in Pure Source Farm Company, which in turn owns the two dairy farms.