Chilled pork producer hopes investors will not be scared off by the recent outbreak of a fatal pig disease in the mainland China's second-largest producer of chilled pork, which is seeking a Hong Kong listing, is banking on investors being able to look beyond this summer's outbreak of a fatal pig-borne disease and focus on its projection that net profit will nearly double this year. Analysts say the offer should also be underpinned by strong investor interest for mainland consumer plays, which have led to hefty price gains for the likes of China Mengniu Dairy, sportswear retail chain Li Ning and Dynasty Fine Wines Groups in the past 12 months. 'We saw little effect on sales [during the outbreak], in fact we experienced even faster growth momentum,' Zhu Yicai, chairman and founder of China Yurun Food Group, said yesterday. The Streptococcus suis disease, which killed at least 38 people in the mainland between late June and last month and infected at least six people in Hong Kong, has heightened food safety awareness among the public and as a result, frozen and chilled pork were becoming increasingly popular in China, Mr Zhu said. At present, only 10 per cent of the 600 million live pigs that are slaughtered in the mainland every year get to make their last squeal at industrialised and chilled slaughter houses like those operated by Yurun. The rest are killed at traditional butchers, who typically work at room temperature and sell mostly through wet markets. Neither of the company's two production facilities in the hardest-hit Sichuan province was affected by the outbreak. However, in its listing document, Yurun does acknowledge that there are no assurances that they will not be in the future or that the market for pork products will not decline due to fears of similar outbreaks. Yurun, which also produces frozen pork and processed meat, is hoping to raise up to $1.53 billion from the sale of 416.09 million shares, or 30 per cent of the enlarged share capital, at between $2.85 and $3.70 each. Ten per cent of the shares have been earmarked for retail investors in a public offering that will be open from today until noon on Friday, while the remaining 90 per cent will be sold to institutional investors. The shares are scheduled to start trading on October 3. Goldman Sachs, whose private equity arm will hold 6.75 per cent in the company after the listing, is global co-ordinator and sole bookrunner for the offer. Guotai Junan Capital is joint sponsor. The offer price values Yurun at 11.3 to 14.6 times this year's earnings, which are forecast to be at least $335 million, up 98 per cent from $169.1 million last year. In the first quarter, it posted a 130 per cent rise in net profit to $94.2 million from $40.9 million in the same period last year, while turnover rose 119 per cent to $1.09 billion. Between 2002 and last year, net profit rose at a compound annual growth rate of 75 per cent, while sales expanded by 30 per cent per year and its gross profit margin remained stable at 14 to 16 per cent. Yurun plans to pay at least 25 per cent of net profit as dividend. Mr Zhu, who will hold 53.4 per cent of the firm after listing, highlighted the company's growth rate and strong brand as key selling points for the share offer and said he was optimistic about the pork industry in China. China accounts for almost half of the world's pork consumption and the market continues to grow as living standards and income levels improve. The market is also highly fragmented and Yurun plans to capitalise on expected industry consolidation to conduct 'selective acquisitions', Mr Zhu said.