Australia’s Beston Global Food Co. Ltd. is trading at a heavy discount compared to its issue price less than a week ago in a reflection that investors are reticent to invest in food companies that rely on the Chinese market.

 

According to its prospectus, Beston does not focus on one segment of the food or agriculture space, but rather, invests in food companies that sell “highly sought after food and beverage commodities to growing populations, particularly in Asia.”

 

The company’s initial planned investments include total ownership in a dairy farm, a 36% stake in a lobster producer, and a 25% stake in a dairy producer.

 

After raising A$130 million (US$93.55 million) from its initial public offering, the company’s stock is traded at a 14% discount to the issue price of 35 Australian cents per share before leveling at 32 cents per share.

 

Over the past two months, other Australian food companies have shown weak listings as well, including citrus, berry, and tomato producer, Costa Group Holdings Ltd., which is producing tomatoes in China and is selling at 12% below its issue price of last month, and Murray Goulburn’s MG Unit Trust, which is trading 10% below its issue price one month after listing.