Citrus firm boosts land holdings after IPO

Dongfang Modern Agriculture Holding Group Ltd, considered China's second-largest citrus fruit producer, will use some of the proceeds from its Australian listing to more than double the land it owns at home.

The move, the first such step by a Chinese agricultural firm, comes as Australia increasingly emerges as a destination for Chinese companies looking to raise capital as a lengthy wait and market volatility discourage them from listing at home.

Dongfang Modern said in a statement it was buying 5,270 hectares of land via two deals in Jiangxi province for A$106 million ($76 million). The company will own more than 8,000 hectares after the deals are completed.

The firm said the investment would be partially funded from the nearly A$40 million it raised through its listing on the Australian Securities Exchange in October. It had targeted a capital raising of A$50 million.

"We are delivering upon the expansion plans outlined within our IPO prospectus, and will seek further opportunities to grow within the world's largest agribusiness sector, China," said Executive Chairman Cai Hongwei.

Analysts said that Chinese companies listing in Australia must overcome language barriers and a reluctance by Australian investors to embrace an investment prospect which has underperformed severely.

Just a handful of Chinese companies that have listed on the ASX since 1996 remain trading at or above their listing price, Reuters data show.

China Dairy Corporation, the privately owned milk producer, said it plans a A$20 million listing to fund Australian investment and domestic land expansion.