IPO Details

Purpose of IPO

• The company is raising approximately HK$9.27 billion net (HK$9.56 billion gross).

• Funds will be used for international expansion, R&D, smart manufacturing, and global brand-building. Haitian Flav is pushing into overseas markets with its “global flavour” initiatives.

IPO Pricing

• Price range: HK$35 to HK$36.30.

• This is approximately a 20% discount to its Shanghai A-share price of about HK$45.58.

Oversubscription

• Retail tranche saw 219× oversubscription.

• Total retail oversubscription exceeded 200×, indicating extremely strong retail demand.

Dividend Commitment

• The IPO prospectus includes a formal dividend policy committing to pay at least 20% of distributable profit annually, subject to shareholder approval and applicable laws.

• Historical dividend payments:

  • 2022: RMB 3,201.6 million

  • 2023: RMB 3,243.7 million

  • First 9 months of 2024: RMB 3,660.4 million

• This reflects the company’s long-term commitment to stable and healthy dividend payouts.

Placement & Listing Outlook

Placement Details

• Initial offering of 263.2 million H-shares.

• Additional 55.3 million shares may be issued via greenshoe option, bringing the maximum to 318.5 million shares.

Supply vs. Demand

• Given the extreme oversubscription and limited share allocation, there is a high likelihood of a strong first-day performance with a significant price jump.

Investors & Subscriptions

Institutional and Anchor Investors

• The offering is led by multiple top-tier global investment banks.

• Institutional demand is reported to be very strong, likely mirroring retail demand.

Strength Signal

• Broad-based and strong subscription across retail and institutional investors shows high market confidence.

Underwriters & Sponsors

Joint Sponsors and Underwriters

• Morgan Stanley

• CICC (China International Capital Corporation)

• Goldman Sachs

Performance Outlook

• Backing from these blue-chip banks enhances credibility and typically boosts first-day market performance due to strong international marketing, pricing, and book-building.

Company Overview

Business Model

• Foshan Haitian Flavouring & Food Co. is China’s largest condiment producer.

• Brand: “Haday” — a leader in soy sauce, oyster sauce, and other sauces.

• The company offers over 1,450 SKUs (products).

Market Share

• No. 1 in China for condiments with approximately 12.6% share in soy sauce category.

• Global soy sauce market share of approximately 1.1%.

Financials (2024)

• Revenue: RMB 26.9 billion (+9.5% year-on-year growth)

• Net profit: RMB 6.34 billion (+12.8% year-on-year growth)

• Profit margin: 23.6%

R&D Investment

• R&D spending: RMB 840 million (~3.12% of revenue)

• Focus on smart factory automation and product innovation.

Management Team

• Chen Junyang (Chairman)

• Guan Jianghua (Director)

• Liao Changhui (Director)

• Pang Kang (Honorary Chairman)

• Wen Zhizhou (Independent Director)

• Cheng Xue (Independent Director)

Market Conditions & Trends

a) Sector Trends

• Asia’s condiment market growing at 5%–10% annually.

• International demand supported by globalization and fusion cuisines.

b) Timing of IPO

• Scheduled listing date: June 19, 2025.

• Currently stable market window in Hong Kong.

c) Economic Climate

• China’s economy is stabilizing.

• Hong Kong market liquidity improving with stronger exchange fund inflows.

d) Recent Updates

• Strong double-digit profit growth.

• Advanced R&D in fermentation, intelligent production, and automation.

e) Market Conditions & Risks

• Conditions are favorable with strong demand, high-quality underwriters, and robust company fundamentals.

• Risks include:

  • Volatility in raw material (soybean) prices.

  • Exchange rate fluctuations.

  • Regulatory risks in China’s food safety and export sectors.

  • Market correlation between A-share and H-share prices.

f) Lock-up Period

• Promoters hold approximately 70% of shares.

• Lock-up period ranges from 6 to 12 months post-listing.

Peer Comparison Table

Peer Comparison Analysis:

• Foshan Haitian trades at a modest P/E discount relative to its peers, while showing superior profit margins, steady revenue growth, and substantial market leadership.

• Recent IPOs in the same sector have seen 10%–15% first-day gains; Haitian’s fundamentals suggest a stronger 20% potential upside.

Analyst Coverage & Targets

• Citi target price: HK$42

• Morgan Stanley target price: HK$45

• Goldman Sachs target price: HK$46

Consensus:

• Analysts expect 20%–30% upside from IPO price range.

IPO Allotment Result

• Final allotment ratio approximately 1:200.

• The extremely high oversubscription ratio signals strong aftermarket demand.

Investment Verdict

Recommendation:

• Strong fundamentals, leading market position, consistent growth, blue-chip sponsors, and high investor demand.

Expected First-Day Price:

• Estimated HK$43–HK$48 (~20%–30% premium on listing day).

Verdict:

• Worth subscribing both for long-term growth investors and short-term IPO trading.

Prospectus Access

• Prospectus can be downloaded from HKEX News website by searching:
  “佛山市海天調味食品股份有限公司” under the “New Listings” section.

  https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0611/2025061100017.pdf

  Bottom Line: Haitian Flav brings leading global scale, strong growth, advanced tech, deep investor appeal and blue-chip backing. Expect a strong debut in HK—potential 20–30% first-day upside.

  Thank you