(Bloomberg) — China Youran Dairy Group Ltd. and its shareholder, private equity firm PAG, have raised about HK$5 billion ($643 million) after pricing the dairy product maker’s Hong Kong initial public offering at the low end of a marketed range, according to people familiar with the matter.

The company and funds managed by PAG have priced 715.4 million shares at HK$6.98 each, the people said, asking not to be identified because the information is private. They had marketed the shares at HK$6.98 to HK$8.66 apiece, the prospectus showed.

Youran Dairy’s flotation was met with mediocre investor demand as some retail buyers canceled orders, the Hong Kong Standard reported on Thursday. Orders placed through margin financing stood at HK$1.29 billion on Thursday, down about 8% from Monday, the Standard reported. The pricing was first reported by IFR.

An external representative for Youran Dairy declined to comment.

The lackluster debut adds to recent signs that Hong Kong’s IPO market is cooling down. Last month’s first-time share sales underwhelmed expectations, coming amid volatile trading and concerns about rising inflation.

The share sale attracted two cornerstone investors, Citic Prudential and Harvest Private Wealth. The firms agreed to subscribe for a combined $50 million worth of the offered shares, based on the mid-point of the price range.

The offering consists of 493.4 million new shares and 222 million existing shares, prior to the so-called greenshoe option, according to the prospectus. The company plans to use the proceeds for activities including building dairy farms and feed mills and buying dairy cows.

Founded in 1984, Youran Dairy produces and sells fresh milk and engages in related animal farming activities in China. It reported net income of 1.34 billion yuan ($210 million) in 2020, up from 801.9 million yuan in the previous year, according to its prospectus. PAG and Inner Mongolia Yili Industrial Group Co. hold 42.9% and 40% stakes respectively in the firm.

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The stock is set to begin trading on June 18 in Hong Kong. Huatai International Ltd. and Credit Suisse Group AG are joint sponsors for the listing.

(Updates with company response in fourth paragraph.)

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