IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Foshan Haitian Flavouring & Food Company / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/foshan-haitian-flavouring-food-company" target="_blank" data-smartkarma-citation="entities:44279:1" rel="noopener">Foshan Haitian Flavouring &amp; Food Company (3288 HK)</a> has launched its H Share listing at HK$35.00 to HK$36.30 per H Share. Pricing will be on 17 June.</li>
<li>I discussed the H Share listing in <strong><em><a href="https://www.smartkarma.com/insights/foshan-haitian-flavouring-h-share-listing-the-investment-case" target="_blank" data-smartkarma-citation="insights:187902" rel="noopener">Foshan Haitian Flavouring H Share Listing: The Investment Case</a></em></strong>.</li>
<li>The proposed AH discount can be argued as either light or attractive. I lean toward the latter and would participate in the H Share listing.</li>
</ul>



Foshan Haitian Flavouring &amp; Food Company (3288 HK) has launched its H Share listing at HK$35.00 to HK$36.30 per H Share. Pricing will be on 17 June.
I discussed the H Share listing in Foshan Haitian Flavouring H Share Listing: The Investment Case.
The proposed AH discount can be argued as either light or attractive. I lean toward the latter and would participate in the H Share listing.


Foshan Haitian Flavouring H Share Listing (3288 HK): Valuation Insights

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>Hong Kong's IPO market has gathered momentum lately, especially with the overwhelming response to <a href="https://www.smartkarma.com/entities/contemporary-amperex-technology-catl-co-limited" target="_blank" data-smartkarma-citation="entities:45179:1" rel="noopener">CATL (3750 HK)</a>. Consumer IPOs are the next ones to gather interest. </li>
<li>
<a href="https://www.smartkarma.com/entities/foshan-haitian-flavouring-food-company" target="_blank" data-smartkarma-citation="entities:44279:1" rel="noopener">Foshan Haitian Flavouring &amp; Food Co (FHF HK)</a> is the most imminent one, potentially seeking up to US$1bn. Without significant peers in Hong Kong, it should attract good attention.</li>
<li>The other interesting ones include <a href="https://www.smartkarma.com/entities/zhou-liu-fu-jewellery-co-ltd" target="_blank" data-smartkarma-citation="entities:43706:1" rel="noopener">Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH)</a>, <a href="https://www.smartkarma.com/entities/three-squirrels" target="_blank" data-smartkarma-citation="entities:45113:1" rel="noopener">Three Squirrels (TRS HK)</a>, and <a href="https://www.smartkarma.com/entities/eastroc-beverage-group-co-ltd-f3283290-a611-4cb4-8857-93101786e283" target="_blank" data-smartkarma-citation="entities:45048:1" rel="noopener">Eastroc Beverage Group (EBG HK)</a>. </li>
</ul>


Hong Kong's IPO market has gathered momentum lately, especially with the overwhelming response to CATL (3750 HK). Consumer IPOs are the next ones to gather interest. 

Foshan Haitian Flavouring &amp; Food Co (FHF HK) is the most imminent one, potentially seeking up to US$1bn. Without significant peers in Hong Kong, it should attract good attention.
The other interesting ones include Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH), Three Squirrels (TRS HK), and Eastroc Beverage Group (EBG HK). 


HK Strategy: Some Consumer IPO Pipelines and Their Proxies

<ul>
<li>
<a href="https://www.smartkarma.com/entities/foshan-haitian-flavouring-food-company" target="_blank" data-smartkarma-citation="entities:44279:1" rel="noopener">Foshan Haitian Flavouring &amp; Food Company (FHF HK)</a>, the largest condiment company in China, is seeking an H-share IPO in Hong Kong. </li>
<li>It has established brand recognition and leadership positions, product innovation and diversification, opportunities from industry consolidation, and steady earnings with net cash.</li>
<li>Assuming a 28% HA discount, the same as the HS Stock Connect, this implies an FY25 PER of 23.2x. Versus <a href="https://www.smartkarma.com/entities/kikkoman-corp" target="_blank" data-smartkarma-citation="entities:11720:1" rel="noopener">Kikkoman Corp (2801 JP)</a>'s 23.8x, this seems not attractive enough. </li>
</ul>



Foshan Haitian Flavouring &amp; Food Company (FHF HK), the largest condiment company in China, is seeking an H-share IPO in Hong Kong. 
It has established brand recognition and leadership positions, product innovation and diversification, opportunities from industry consolidation, and steady earnings with net cash.
Assuming a 28% HA discount, the same as the HS Stock Connect, this implies an FY25 PER of 23.2x. Versus Kikkoman Corp (2801 JP)'s 23.8x, this seems not attractive enough. 


Foshan Haitian Flavouring Pre-IPO: A Stable Breed

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>Despite returning to positive growth, Haitian still failed to achieve its 2024 revenue target, mainly due to underperformance of Soy sauce products, consumption downgrades, slow online layout/distributors recovery.</li>
<li>Haitian would face dual challenges of "cost increase + structural transformation" in the next three years due to inflation and the negative impact of  "new standard". We shared our performance forecast.</li>
<li>High valuation is unsustainable if based on current growth rate.Reasonable valuation is about 20-30x P/E. However, due to the strong sentiment for AH listing, share price may still perform well. </li>
</ul>


Despite returning to positive growth, Haitian still failed to achieve its 2024 revenue target, mainly due to underperformance of Soy sauce products, consumption downgrades, slow online layout/distributors recovery.
Haitian would face dual challenges of "cost increase + structural transformation" in the next three years due to inflation and the negative impact of  "new standard". We shared our performance forecast.
High valuation is unsustainable if based on current growth rate.Reasonable valuation is about 20-30x P/E. However, due to the strong sentiment for AH listing, share price may still perform well. 


Pre-IPO Foshan Haitian Flavouring & Food Company (PHIP Updates) - Some Points Worth the Attention

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

Foshan Haitian Flavouring & Food Company / Equity Bottom-Up

<ul>
<li>We have visited three supermarkets in Shanghai, looking for Haitian Sauces.</li>
<li>We believe Haitian is obviously the top brand among soy sauces.</li>
<li>However, there are many competitors and Lee Kum Kee is the most important.</li>
</ul>


We have visited three supermarkets in Shanghai, looking for Haitian Sauces.
We believe Haitian is obviously the top brand among soy sauces.
However, there are many competitors and Lee Kum Kee is the most important.


Haitian Flavouring: Looking for Soy Sauces on the Ground

China

Foshan Haitian Flavouring & Food Company Ltd. manufactures food seasonings. The Company develops, produces, and distributes condiments including soy sauce, oyster sauce, vinegar, flavoring sauce, chicken stock, monosodium glutamate, and oil.

Foshan Haitian Flavouring & Food Company (3288 HK)

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Foshan Haitian Flavouring & Food Company (3288 HK)

HK Strategy: Some Consumer IPO Pipelines and Their Proxies

HK's IPO market gains momentum with CATL leading the way. Consumer IPOs like Foshan Haitian are next in line, attracting attention. Others include...

Osbert Tang, CFA

Foshan Haitian Flavouring Pre-IPO: A Stable Breed

Foshan Haitian Flavouring has proceeded through the Exchange hearing, with the impending IPO targeting to raise as much as US$1bn. We recirculate...

Osbert Tang, CFA

Pre-IPO Foshan Haitian Flavouring & Food Company (PHIP Updates) - Some Points Worth the Attention

Haitian faces dual challenges of "cost increase + structural transformation".Despite strong sentiment on AH listing, after all the prosperity,...

Xinyao (Criss) Wang

Haitian Flavouring: Looking for Soy Sauces on the Ground

We have visited three supermarkets in Shanghai, looking for Haitian Sauces. Haitian is obviously the top brand among soy sauces. Among all...

Ming Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Foshan Haitian Flavouring H Share Listing (3288 HK): Valuation Insights

Haitian has launched its H Share listing at HK$35.00 to HK$36.30 per H Share. The proposed AH discount is attractive, and I recommend participating...

Arun George

HK Strategy: Some Consumer IPO Pipelines and Their Proxies

HK's IPO market gains momentum with CATL leading the way. Consumer IPOs like Foshan Haitian are next in line, attracting attention. Others include...

Osbert Tang, CFA

Foshan Haitian Flavouring Pre-IPO: A Stable Breed

Foshan Haitian Flavouring has proceeded through the Exchange hearing, with the impending IPO targeting to raise as much as US$1bn. We recirculate...

Osbert Tang, CFA

Pre-IPO Foshan Haitian Flavouring & Food Company (PHIP Updates) - Some Points Worth the Attention

​Haitian faces dual challenges of "cost increase + structural transformation".Despite strong sentiment on AH listing, after all the prosperity,...

Xinyao (Criss) Wang

Haitian Flavouring: Looking for Soy Sauces on the Ground

We have visited three supermarkets in Shanghai, looking for Haitian Sauces. Haitian is obviously the top brand among soy sauces. Among all...

Ming Lu

Haitian faces dual challenges of "cost increase + structural transformation".Despite strong sentiment on AH listing, after all the prosperity,...