The Capital Allocation Strategy
China Feihe Limited, a premium dairy product manufacturer listed on the Hong Kong Stock Exchange, has actively optimized its balance sheet by deploying RMB 1.4 billion in surplus corporate cash. According to an official regulatory disclosure on August 3, 2026, the group executed seven distinct institutional subscriptions to enhance treasury returns.
The corporate treasury division concentrated these capital flows into short-to-medium-term instruments, maintaining an investment duration that balances capital safety with liquidity constraints. By utilizing temporary idle funds, the company aims to cover operating expenses and support upcoming dividend payments.
Institutional Manager Selection
Rather than relying on a single asset manager, China Feihe distributed its capital across five top-tier Chinese wealth management platforms. This approach reduces counterparty risk while capturing optimal yields across different institutional product lines.
The mandates include a massive RMB 500 million allocation to Huaxia Wealth Management’s Fixed Income Debt-Type Product No. 701, which yields 2.55%. Additional assets were routed to specialized vehicles managed by CMB Wealth Management, China Post Wealth Management, BOCOM Wealth Management, and Xinyin Wealth Management.
Vehicle Structure and Asset Parameters
The selected financial instruments operate exclusively under a non-principal-guaranteed framework with floating returns. This structure allows corporate treasurers to capture higher yields compared to standard, low-yielding time deposits in mainland China.
The underlying investment scopes are strictly restricted to low-risk fixed-income assets, providing stable income generation. This asset selection insulates the group's working capital from equity market volatility while fulfilling its fiduciary wealth preservation objectives.
Regulatory and Governance Compliance
Because the products were issued by China Merchants Bank and its affiliated entities, the subscriptions triggered aggregation mandates under Hong Kong Listing Rule 14.22. The cumulative transaction size surpassed the 5% disclosable threshold but remained below the 25% major transaction ceiling.
Consequently, the multi-billion-renminbi strategy required direct disclosure to the market, though it remains exempt from formal shareholder approval. The board confirmed that robust internal control procedures are in place to ensure these treasury actions do not impact daily cash requirements.