New Hope to list meat processor Kilcoy Pastoral in Hong Kong

China’s New Hope has opted to head to the Hong Kong stock exchange for an initial public offering of its Kilcoy Pastoral rural business.

Plans to float the business were first tipped by this column last year when it was expected to be worth as much as $1bn.

Queensland-based Kilcoy Pastoral Company is among Australia’s five largest meat-processing companies, with brands including Kilcoy Pure, Ebony Black Angus, Golden Jubilee and Kilcoy Blue Diamond.

The business is understood to generate annual revenue of between $800m and $1bn.

Kilcoy had been boosting staff last year in what was thought to be preparation for a listing.

New Hope is China’s biggest producer and processor of pork, chicken, eggs and stock feed, with annual sales in excess of $15bn.

It has a large presence in the US meat processing industry.

It was understood last year that New Hope, the majority owner of Kilcoy, was considering IPO plans at a time when it outlaid funds to improve its Australian assets.

An IPO could fund acquisitions of the numerous Australian meat processing assets that have come up for sale, with higher beef prices often triggering lower volumes, putting pressure on shippers and abattoir owners.

Elsewhere, analysts from Ord Minnett say they believe Lendlease’s sale of its engineering business will cause the company’s shares to rerate.

The analysts believe that on the back of a sale, shares would increase to between $18 and $18.50.

Lendlease is trading at 12.5 times its net profit, compared with the 19.3 times average across the broader market.

Lendlease has placed its engineering and services business up for sale through Morgan Stanley and Gresham, and is expected to soon short-list its sales process to one or two parties.

A $500m pre-tax provision was issued against the division for underperforming projects.

Final-round offers for the engineering business are due in the next few weeks and a sale is possible by the end of the year, subject to conditions.

It comes as Lendlease Engineering, in a
joint venture with CIMIC, this week secured the Badgerys Creek earthworks contract for
Western Sydney International Airport.