Feihe in US$200m buyback as shares plunge

China Feihe (6186) unveiled a share repurchase plan yesterday, after the infant milk producer's share price was battered by its chairman's forecast that Covid-19 vaccination would hurt powdered milk sales.

The board is to repurchase up to 10 percent of the total number of issued shares for up to US$200 million (HK$1.56 billion), until the conclusion of the next annual general meeting. China Feihe will finance the repurchase from its existing available cash reserves and free cash flow.

Shares of China Feihe once plunged 8.54 percent to an intraday low of HK$18.84 yesterday morning but after the company released its share repurchase plan at noon, the stock pared earlier losses to close 6.60 percent lower at HK$19.24.

This came after chairman Leng Youbin said he expected a steep drop in powdered milk sales in the coming one or two years, since many parents can not prepare for pregnancy within six months after getting the Covid-19 vaccination, according to mainland media reports.