HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Foshan Haitian Flavouring & Food Company / Equity Capital Markets

<ul>
<li>The essence of Haitian's business is “hard-earned money”.Although performance rebounded in 2024, more observations on net profit are needed.It’s time to take a look at Haitian from a different angle.</li>
<li>The past high valuation of Haitian is due to the market's high expectations for it, or rather, the market's optimism about its performance growth. However, Haitian's moat is not deep.</li>
<li>A comfortable valuation range is 20-30x P/E. Based on the IPO pricing and 2025 forecast, P/E is about 27.5-28.5x. So, we think the IPO pricing range of Haitian is reasonable.</li>
</ul>


The essence of Haitian's business is “hard-earned money”.Although performance rebounded in 2024, more observations on net profit are needed.It’s time to take a look at Haitian from a different angle.
The past high valuation of Haitian is due to the market's high expectations for it, or rather, the market's optimism about its performance growth. However, Haitian's moat is not deep.
A comfortable valuation range is 20-30x P/E. Based on the IPO pricing and 2025 forecast, P/E is about 27.5-28.5x. So, we think the IPO pricing range of Haitian is reasonable.


Pre-IPO Foshan Haitian Flavouring & Food Company - Thoughts on the IPO Pricing

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 17 June, Bloomberg reported that Foshan Haitian Flavouring &amp; Food Company has raised HK$10.1 billion after a strong remand for its shares to be listed in Hong Kong.</li>
<li>We estimate the company to generate revenue of 29.4 billion RMB (up 9.2% YoY) and net profit of 6.8 billion RMB (up 7.1% YoY) in 2025.</li>
<li>Our valuation analysis suggests that Foshan Haitian is undervalued. Our base case valuation suggests implied market cap of 286 billion CNY, which represents 25% higher than current levels.</li>
</ul>


On 17 June, Bloomberg reported that Foshan Haitian Flavouring &amp; Food Company has raised HK$10.1 billion after a strong remand for its shares to be listed in Hong Kong.
We estimate the company to generate revenue of 29.4 billion RMB (up 9.2% YoY) and net profit of 6.8 billion RMB (up 7.1% YoY) in 2025.
Our valuation analysis suggests that Foshan Haitian is undervalued. Our base case valuation suggests implied market cap of 286 billion CNY, which represents 25% higher than current levels.


Foshan Haitian Flavouring & Food Company Hong Kong IPO Valuation Analysis

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

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.

Foshan Haitian Flavouring & Food / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/foshan-haitian-flavouring-food-co-ltd" target="_blank" data-smartkarma-citation="entities:15577:1" rel="noopener">Foshan Haitian Flavouring &amp; Food (603288 CH)</a>, a leading Chinese pharmaceutical company, has filed its PHIP for an H Share listing to raise US$1 billion.     </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 Company (FHF HK)</a> has been China’s leading condiments company in terms of sales volume for 28 consecutive years.</li>
<li>The investment case rests on its market positioning, return to growth, industry-leading profitability, cash generation and strong balance sheet. However, the valuation of the A Shares is full.</li>
</ul>



Foshan Haitian Flavouring &amp; Food (603288 CH), a leading Chinese pharmaceutical company, has filed its PHIP for an H Share listing to raise US$1 billion.     

Foshan Haitian Flavouring &amp; Food Company (FHF HK) has been China’s leading condiments company in terms of sales volume for 28 consecutive years.
The investment case rests on its market positioning, return to growth, industry-leading profitability, cash generation and strong balance sheet. However, the valuation of the A Shares is full.


Foshan Haitian Flavouring H Share Listing: The Investment Case

<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

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>In our latest int'l reports we have preached caution, and since January we have discussed our expectations for $93 to cap upside on the ACWI-US</li>
<li>Thus far, $93 has proven to be rock-solid resistance, and ACWI-US now displays a 4.5-month uptrend violation signaling the pullback has officially begun.</li>
<li>We would expect this pullback to continue down to $86-87 at minimum, and potentially $84 (December 2022 low). Even $75-77 (the 2022 lows) is not out of the question.</li>
</ul>


In our latest int'l reports we have preached caution, and since January we have discussed our expectations for $93 to cap upside on the ACWI-US
Thus far, $93 has proven to be rock-solid resistance, and ACWI-US now displays a 4.5-month uptrend violation signaling the pullback has officially begun.
We would expect this pullback to continue down to $86-87 at minimum, and potentially $84 (December 2022 low). Even $75-77 (the 2022 lows) is not out of the question.


MSCI ACWI Uptrend Break; Defensives to Shine; Ideas in Staples, Health Care, Telecomm, Utilities

China

Qianhe Condiment and Food Co Ltd develops and sells food additives.  The Company sells soy sauce, vinegar, spices, caramel color and more.

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Qianhe Condiment And Food-A (603027 CH)

Pre-IPO Foshan Haitian Flavouring & Food Company - Thoughts on the IPO Pricing

Haitian's IPO pricing is in line with our analysis in the insight, which means share price upside potential could be lower-than-expected due to...

Xinyao (Criss) Wang

Foshan Haitian Flavouring & Food Company Hong Kong IPO Valuation Analysis

Our valuation analysis suggests that Foshan Haitian is undervalued. Our base case valuation suggests implied market cap of 286 billion CNY, which...

Douglas Kim

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

MSCI ACWI Uptrend Break; Defensives to Shine; Ideas in Staples, Health Care, Telecomm, Utilities

$93 on $ACWI has proven to be rock-solid resistance, and it now displays a 4.5-month uptrend violation signaling the pullback has officially begun....

Vermilion Research

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Pre-IPO Foshan Haitian Flavouring & Food Company - Thoughts on the IPO Pricing

Haitian's IPO pricing is in line with our analysis in the insight, which means share price upside potential could be lower-than-expected due to...

Xinyao (Criss) Wang

Foshan Haitian Flavouring & Food Company Hong Kong IPO Valuation Analysis

Our valuation analysis suggests that Foshan Haitian is undervalued. Our base case valuation suggests implied market cap of 286 billion CNY, which...

Douglas Kim

Foshan Haitian Flavouring H Share Listing: The Investment Case

Haitian has filed its PHIP for an H Share listing to raise US$1 billion. In this note, we discuss the investment case and valuation.

Arun George

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

MSCI ACWI Uptrend Break; Defensives to Shine; Ideas in Staples, Health Care, Telecomm, Utilities

$93 on $ACWI has proven to be rock-solid resistance, and it now displays a 4.5-month uptrend violation signaling the pullback has officially begun....

Vermilion Research

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