Foshan Haitian Flavouring & Food Company Hong Kong IPO Preview

• Foshan Haitian Flavouring & Food Company is the largest listed condiments producer in mainland China which is seeking to raise up to HK$9.56 billion (US$1.22 billion) in Hong Kong listing.

• It is offering 263.2 million shares at HK$35 to HK$36.30 each. The final offer price is expected to be announced on 17 June.

• Foshan Haitian Flavouring & Food is the largest condiments company in China with strong brand power with loyal customers.

Foshan Haitian Flavouring & Food Company (3288 HK) ("Company" or "Foshan Haitian") is the largest listed condiments producer in mainland China. This company is seeking to raise up to HK$9.56 billion (US$1.22 billion) in Hong Kong listing. It is offering 263.2 million shares at HK$35 to HK$36.30 each. The final offer price is expected to be announced on 17 June. Foshan Haitain IPO is scheduled to start trading on 19 June.

The company plans to allocate 6% of public offering to Hong Kong investors and 94% to global investors. The company could increase the offering by an additional 55.3 million shares under the overallotment options granted to the underwriters which could raise the final IPO size to as much as HK$11.6 billion at the high end of the price range. At HK$36.30 per share, Foshan Haitian Hong Kong listing would be at about 20 per cent discount to its mainland listed shares in Shanghai.

Foshan Haitian Flavouring & Food Company Background

Foshan Haitian Flavouring & Food is the largest condiments company in China with strong brand power with loyal customers. The company's competitive strengths include its market leadership, trusted brand portfolio, and deep customer loyalty. The company is China’s leading condiments company, recognized for its industry-leading supply chain that delivers superior quality, efficiency, and cost advantages.

The company's core products include soy sauce, oyster sauce, flavored sauces, and specialty condiments. The company ranked number one in China's condiments market by revenue, accounting for a 4.8% market share, which was more than twice that of its nearest competitor. Globally, the company ranked fifth in terms of condiments revenue in 2024, capturing a 1.1% of the global market.

Major products of Foshan Haitian Flavouring & Food Company (Source: Company data)

• Number one player in condiment market in China - The company has been the largest condiment company in China for 28 consecutive years. In 2024, Foshan Haitian held a 13.2% share of China’s soy sauce market and 6.2% globally, while its oyster sauce commanded 40.2% in China and 24.1% globally. Its flavored sauce products also led China’s single-component flavored sauce market with a 4.6% share.

• Strong flagship brand - The company's flagship brand “Haday” is one of the most recognized names in China’s consumer market. According to the 2024 Brand Footprint Report by Kantar Worldpanel, “Haday” reached over 80% of Chinese households and ranked as the fourth most preferred brand across all consumer categories—and first within condiments.

• Comprehensive lines of condiment products - The company offers a diverse and comprehensive product portfolio, including soy sauce, oyster sauce, flavored sauces, vinegar, cooking wine, chicken essence, tomato sauce, chili sauce, and other specialty condiments. The company has successfully developed seven product series with annual revenue exceeding RMB1 billion, more than any other condiment company in China. Additionally, 31 product series each generate over RMB100 million annually and together accounted for 76.6% of its total product revenue in 2024.

• Customers - The company's customer base primarily consists of distributors who resell its products, alongside catering businesses, food processing enterprises, corporate welfare programs, and end-customers via self-operated e-commerce stores. Revenue from its five largest customers accounted for less than 3.0% of its total annual revenue during the Track Record Period, reflecting the company's well diversified customer structure.

• Purchases from Suppliers - The company maintains strong partnerships with raw material suppliers, sourcing key ingredients such as soybeans, oyster extracts, sugar, and salt from premium production regions to ensure product quality and supply stability. Purchases from its top five suppliers represented 20.2%, 17.2%, and 17.4% of total purchases in the respective years of the Track Record Period.

• Extensive Sales/Distributorship Network - The company has developed the most extensive sales network in the industry, covering nearly 100% of municipalities and around 90% of counties in China. With a dedicated sales team of over 3,000 professionals and strong collaboration with distributors, the company is reaches a broad customer base through diverse channels—including food service, supermarkets, wholesale markets, e-commerce, and community group buying platforms. In 2024, distributors accounted for 97.6% of total sales and direct sales accounted for the remaining 2.4% of sales.

Source: Company data

• High number of patents and R&D capabilities - The company had more than 1,000 patents at the end of 2024, covering areas such as product R&D, strain breeding, and data-driven fermentation. These innovations have helped to maintain a competitive edge versus smaller competitors. The company has a strong dedicated team in the research and development in fermentation technology, production equipment, nutrition, ingredients, and product formulation.

• Strategic adjustments in 2023 - The company implemented strategic adjustments in 2023 to adapt and strengthen its market position. These adjustments included upgrading its sales and distribution network, enhancing existing products and launching new ones, upgraded production lines, and streamlining operations across product development, production, sales, and R&D. These changes initially impacted performance. In 2023, revenue declined 4.1% to RMB24.56 billion, and gross profit dropped 6.6% to RMB8.34 billion. Gross profit margin decreased to 33.9% due to higher depreciation and a shift in product mix.

• Improvement in financials in 2024 - However, the strategic initiatives bore fruit in 2024. Revenue rebounded 9.5% to RMB26.90 billion, gross profit rose 16.7% to RMB9.73 billion, and gross margin improved to 36.2% due to lower raw material costs and operational enhancements. Net profit increased 12.6% to RMB6.36 billion.

• Use of IPO proceeds - The following are the major ways that the company plans to use the IPO proceeds:

• R&D - 20% will be used for product development and research and development, focusing on advanced technologies and upgrading production processes.

  • Expansion of production capacity - 30% will support the expansion of production capacity, adoption of new technologies, and digitization of the supply chain, aiming to boost efficiency and scalability.

  • Enhance global presence - 20% will go toward enhancing global presence, including building the company’s international brand image, expanding overseas sales channels, and upgrading global supply chain capabilities.

  • Strengthen local sales network and market penetration - 20% will be used to strengthen the domestic sales network and deepen market penetration.

  • Working capital - The remaining 10% will be allocated for working capital and general corporate purposes to support day-to-day operations.

• Dividend Policy - The company's dividend policy is to distribute annual cash dividends amounting to no less than 20% of the distributable profit realized in the current fiscal year. In 2022, it distributed dividends totaling RMB3,201.6 million, RMB3,243.7 million in 2023, and RMB3,660.4 million in 2024. At the shareholders’ general meeting held in May 2025, a dividend distribution of approximately RMB4,773.3 million for the financial year ended December 31, 2024 was formally approved.