Scarce stock rush recommendation: The first A+H condiment giant, Haitian's Hong Kong stock subscription is timely

In 2025, the Hong Kong IPO market welcomes another heavyweight player—$HAITIAN FLAV(03288.HK). This household name in the condiment industry has officially submitted its listing application to the Hong Kong Stock Exchange at the beginning of the year and recently passed the hearing, initiating the H-share offering process. As one of the highest market-cap food companies in the A-share consumer sector, Haitian’s "southbound" listing is a natural progression.

So the question arises: Is Haitian Flavouring and Food Company worth subscribing to? My answer is a definite yes. Whether from the perspective of fundamentals, industry position, or valuation, Haitian’s Hong Kong listing offers high subscription value.

1. Strong Financials: Revenue and Profits Resume Growth, Robust Earnings and Ample Cash

Looking at Haitian’s 2024 financial report, this condiment leader has emerged from the trough of the past two years, achieving "double growth" in revenue and profits.

1. Performance Recovery: 2024 revenue reached 26.9 billion yuan, up 9.53% YoY; net profit was 6.34 billion yuan, up 12.75% YoY. How does this compare? The industry average growth was only 1.3%, making Haitian’s performance significantly ahead.

2. Improved Profitability: Gross margin rose to 38.62% (+2.47 percentage points), and net margin reached 23.63% (+0.65 percentage points). After weathering raw material price hikes, Haitian has successfully restored its profit margins.

3. Strong Cash Flow: Operating cash flow was 6.85 billion yuan, exceeding net profit, indicating strong cash conversion capabilities. With minimal interest-bearing debt, its balance sheet is "healthy."

4. High Dividend Payout: Ample cash allows Haitian to continue its tradition of high dividend payouts—proposing a cash dividend of 8.6 yuan per 10 shares for 2024, totaling 4.773 billion yuan, or 75.2% of net profit. Over the past decade, cumulative dividends have exceeded 30 billion yuan, making it a true "dividend powerhouse."

2. Distinctive Competitive Advantages: Brand + Channels + Product

Why has Haitian remained the industry leader? Primarily due to three moats:

1. Strong Brand Influence and Deep Consumer Base

Haitian is a genuine "Chinese time-honored brand" with strong consumer trust. Data shows it reaches 800 million consumers annually, with leading market shares in core categories like soy sauce and oyster sauce. For example, its soy sauce market share is nearly 20%, and oyster sauce exceeds 42%.

2. Extensive Distribution Network and Strong Terminal Control

From supermarkets to rural convenience stores, Haitian products are ubiquitous. In the foodservice sector, its bulk products dominate. Meanwhile, its online sales are accelerating, with a 29% annual growth rate, indicating significant future potential.

3. Diverse Product Line for Risk Diversification

Haitian isn’t just about soy sauce—it offers over 1,000 SKUs, including oyster sauce, sauces, vinegar, and cooking wine. Amid consumer upgrades, it has launched healthier products like low-salt and additive-free options to cater to new-generation consumers.

3. Hong Kong Listing Opens New Opportunities, Global Expansion Timely

This Hong Kong listing isn’t just about entering a new market—it’s a critical step in Haitian’s globalization strategy.

From a valuation perspective, A-share consumer stocks have been overvalued in recent years, while Hong Kong offers more rational pricing for mature consumer companies. Haitian’s current A-share P/E is around 35x, suggesting potential re-rating opportunities in Hong Kong.

More importantly, the Hong Kong IPO aims to raise $1 billion, primarily for overseas expansion. Haitian’s are already sold in over 90 countries, and the company plans to build factories in Southeast Asia, obtain international certifications, and enhance global brand awareness.

The first target is the Chinese diaspora—markets like Singapore, Malaysia, and North America. Next, Haitian aims to penetrate mainstream consumers in Europe and the U.S., transitioning from a "Chinese condiment leader" to a "global condiment giant."

4. Conclusion: Defensive + Growth Attributes, Promising Long-Term Value

Looking ahead, I’m optimistic about Haitian Flavouring and Food Company. For investors, it offers three "plus points":

• Solid Fundamentals: Strong brand moat, extensive distribution, leading scale and technology, and robust finances ensure stable domestic leadership and cyclical resilience.
• Growth Potential: Embracing consumer upgrades (product innovation, category expansion) and accelerating globalization via the Hong Kong listing unlock long-term growth.
• Clear Investment Appeal: As a staple consumer goods leader, it exhibits "long-term bull stock" traits (cyclical resilience, strong cash flow, high dividends), combining defensive (earnings support) and growth (globalization narrative) qualities.

Haitian Flavouring and Food Company isn’t just a bottle of soy sauce—it’s a consumer goods leader with global ambitions. It blends the stability of an established brand with proactive strategies of a newcomer, backed by solid finances, generous dividends, and growth potential. For investors bullish on Chinese brands going global, this Hong Kong IPO deserves serious attention.