Chinese dairy manufacturer shares tumbled amid Beijing’s crackdown fears
Infant formula milk makers have joined the growing list of stocks hurt by Beijing’s regulatory risk after state media urged supervision of milk powder marketing.
Chinese state-run Xinhua Agency reported last Thursday that some experts have been concerned about the marketing of infant formula milk that made mothers choose milk powder over breastfeeding, urging the government to strengthen regulation on marketing behaviours of breast-milk substitutes.
Dairy product manufacturer China Feihe, listed on Hong Kong Stock Exchange, slumped as much as 10 per cent after the news report was released. Ausnutria Dairy dropped over 3 per cent, while China Mengniu Dairy once slipped as much as 5.9 per cent. Shenzhen-listed Beingmate also declined about 3 per cent.
Fears of Beijing’s regulatory crackdown is mounting in the market after the authorities have taken actions in sectors like technology, online gaming, cryptocurrency and private education.
Last month, China’s State Council announced new regulations banning companies from teaching school curriculums to make profits, raise capital, or go public.
The country’s off-campus tutoring businesses, including Gaotu Techedu, TAL Education Group, and New Oriental Education & Technology Group Inc., took a hit on the stock market as the new rules emerged.
Meanwhile, Chinese tech firm Tencent had seen shares tumbled after a damning editorial published in state media labelling video games “spiritual opium.” The firm later introduced restrictions on how long children can play online gaming.