Shares of Chinese infant-formula maker Yashili International opened 11.9 percent lower than its initial public offering price of 4.2 HK dollars (54 U.S. cents) on Monday, its first trading day in Hong Kong.

Under the stock code of 1230, shares of the privately-owned company, based in South China's Guangdong Province neighboring Hong Kong, started trading at 3.7 HK dollars per share at the Hong Kong bourse.

Yashili International announced its IPO plan on Oct. 20, for which it sold 644 million shares -- 10 percent for public offering in Hong Kong while the other 90 percent for the international placing.

Net proceeds from the global offering stood at 2.31 billion HK dollars, the company said in an earlier statement to the Hong Kong stock exchange.

According to the statement, Yashili International's substantial shareholders were Zhang International and U.S.-based Carlyle Group.

Zhang International, which was founded and owned by Zhang Lidian, president of Yashili International, and his brothers, has a controlling stake of 52.19 percent of Yashili International. Carlyle has a 24.39 percent stake in Yashili International.

In a speech at the listing ceremony, Zhang Lidian said the IPO was a major milestone in Yashili International's history and would serve as a new starting point for its liftoff.

On the performance of its debut, Zhang said fluctuations of share prices were normal in the stock market and he was very confident over Yashili International's prospect.

Yashili International, set up by the Zhangs in 1983, said it was the third largest infant-formula maker on the Chinese mainland, with a market share of 7.6 percent in terms of total retail sales value. Yashily and Scient are two of its major brands.

According to the company, its total revenue amounted to 2.59 billion yuan (387 million U.S. dollars) in 2009, with a profit of 402 million yuan (60 million U.S. dollars).

In the first half this year, Yashili International's net profit rose 22 percent year-on-year to reach 241 million yuan (36 million U.S. dollars).

The company said it was committed to maintaining strict standards of quality control and assurance over the course of its operating history. It currently procure 100 percent of the raw milk powder used to manufacture its infant-formula products from suppliers in New Zealand and Australia.

The Chinese milk formula industry was hard hit by the melamine incident in 2008, in which the chemical melamine had been commonly added to milk supplies. The contaminated milk caused the deaths of six babies and sickened tens of thousands of others in the mainland.

Yashili International said the melamine incident had caused it a total loss of 787 million yuan in 2008 alone, which were mainly attributable to the costs and expenses relating to product recalls and decreased sales in the second half of 2008.

Also at the listing ceremony, Yashili International announced donation of 1 million HK dollars to the Hong Kong Community Chest, a charity organization. (1 U.S. dollar equals 7.753 HK dollars)