Company Reports

Haitian's second-quarter revenue rose 3% year on year to CNY 7.1 billion and operating profit rose 2% to CNY 2.1 billion. Vinegar, cooking wine, and compound seasonings drove most of the increase, while soy sauce, oyster sauce, and recipe sauce were all close to flat.

Haitian’s first-quarter revenue and net profit rose 9% and 11% year on year, respectively, fueled by robust Chinese New Year momentum across both retail and catering channels. Notably, emerging condiment categories outpaced soy and oyster sauce segments, signaling product diversification.

Foshan Haitian Flavouring and Food strives to command a competitive advantage in the condiment industry in China through scale, with large sales volume and high velocity creating stickiness among distributor partners and driving down operating costs. The company’s operating expenses ratio is among the lowest versus peers, resulting in mid-20% net margin levels. Through years of channel endeavors, the firm has set up the most extensive distribution network in the industry. With its focus on the mass market segment, it has established a leadership position across the catering and retail channels in the key condiment category, soy sauce, which contributes more than half of its revenue. Competitive product pricing, enabled by cost advantage, is also key for its major customers, catering outlets. We see this as a virtuous cycle that allows Haitian to maintain its leading position in the industry and generate excess returns consistently.

Foshan Haitian’s 2025 net profit increased by 11% year on year to CNY 7.04 billion, thanks to favorable input costs and strong volume growth that drove operating leverage. Fourth-quarter revenue grew at a double-digit rate despite the absence of Lunar New Year inventory stocking.

In 2025, China's soybean imports reached a record high of 111 million tons, up 6.5% year on year, fueled by increased purchases from South America as import tariffs on US soybeans remained elevated.

Foshan Haitian Flavouring and Food strives to command competitive advantage in the condiment industry in China through scale, with large sales volume and high velocity creating stickiness among distributor partners and driving down operating costs. The company’s operating expenses ratio is among the lowest versus peers, resulting in mid-20% net margin levels. Through years of channel endeavors, the firm has set up the most extensive distribution network in the industry. With its focus on the mass market segment, it has established a leadership position across the catering and retail channels in the key condiment category, soy sauce, which contributes more than half of its revenue. Competitive product pricing, enabled by cost advantage, is also key for its major customers, catering outlets. We see this as a virtuous cycle that allows Haitian to maintain its leading position in the industry and generate excess return consistently. Between 2010 and 2020, Haitian’s revenue and net income have grown at CAGRs of 15% and 26%, respectively.

Haitian reported third-quarter results with revenue and net profit growing 2.5% and 3.3% year on year, respectively.

Foshan Haitian Flavouring and Food strives to command competitive advantage in the condiment industry in China through scale, with large sales volume and high velocity creating stickiness among distributor partners and driving down operating costs. The company’s operating expenses ratio is among the lowest versus peers, resulting in mid-20% net margin levels. Through years of channel endeavors, the firm has set up the most extensive distribution network in the industry. With its focus on the mass market segment, it has established a leadership position across the catering and retail channels in the key condiment category, soy sauce, which contributes more than half of its revenue. Competitive product pricing, enabled by cost advantage, is also key for its major customers, catering outlets. We see this as a virtuous cycle that allows Haitian to maintain its leading position in the industry and generate excess return consistently. Between 2010 and 2020, Haitian’s revenue and net income have grown at CAGRs of 15% and 26%, respectively.

Foshan Haitian Flavouring reported first-half 2025 results with revenue rising 8% year on year, while net profit grew by 13%.

Foshan Haitian Flavouring and Food strives to command competitive advantage in the condiment industry in China through scale, with large sales volume and high velocity creating stickiness among distributor partners and driving down operating costs. The company’s operating expenses ratio is among the lowest versus peers, resulting in mid-20% net margin levels. Through years of channel endeavors, the firm has set up the most extensive distribution network in the industry. With its focus on the mass market segment, it has established a leadership position across the catering and retail channels in the key condiment category, soy sauce, which contributes more than half of its revenue. Competitive product pricing, enabled by cost advantage, is also key for its major customers, catering outlets. We see this as a virtuous cycle that allows Haitian to maintain its leading position in the industry and generate excess return consistently. Between 2010 and 2020, Haitian’s revenue and net income have grown at CAGRs of 15% and 26%, respectively.

Foshan Haitian Flavouring and Food strives to command competitive advantage in the condiment industry in China through scale, with large sales volume and high velocity creating stickiness among distributor partners and driving down operating costs. The company’s operating expenses ratio is among the lowest versus peers, resulting in mid-20% net margin levels. Through years of channel endeavors, the firm has set up the most extensive distribution network in the industry. With its focus on the mass market segment, it has established a leadership position across the catering and retail channels in the key condiment category, soy sauce, which contributes more than half of its revenue. Competitive product pricing, enabled by cost advantage, is also key for its major customers, catering outlets. We see this as a virtuous cycle that allows Haitian to maintain its leading position in the industry and generate excess return consistently. Between 2010 and 2020, Haitian’s revenue and net income have grown at CAGRs of 15% and 26%, respectively.

We initiate coverage of Foshan Haitian Flavouring and Food Company's H-shares. The company, which is already listed in Shanghai, issued 279 million H-shares and debuted on the Hong Kong Exchange today (June 19, 2025).

Foshan Haitian's first-quarter net income increased by 14.5% year on year, driven by an 8.1% revenue growth and gross margin expansion. Sales of new condiment products outpaced traditional soy sauce and oyster sauce segments.

Foshan Haitian Flavouring and Food strives to command competitive advantage in the condiment industry in China through scale, with large sales volume and high velocity creating stickiness among distributor partners and driving down operating costs. The company’s operating expenses ratio is among the lowest versus peers, resulting in mid-20% net margin levels. Through years of channel endeavors, the firm has set up the most extensive distribution network in the industry. With its focus on the mass market segment, it has established a leadership position across the catering and retail channels in the key condiment category, soy sauce, which contributes more than half of its revenue. Competitive product pricing, enabled by cost advantage, is also key for its major customers, catering outlets. We see this as a virtuous cycle that allows Haitian to maintain its leading position in the industry and generate excess return consistently. Between 2010 and 2020, Haitian’s revenue and net income have grown at CAGRs of 15% and 26%, respectively.

Wide-moat Haitian’s 2024 revenue and net income exceeded our estimates by 1%, thanks to stronger-than-expected volume growth in soy sauce and dipping sauces. Gross margin also came in 1.2 percentage points stronger than our forecast due to operating leverage and input costs tailwinds. Operating expenses ratios were higher than 2023, aligning with our view that Haitian had to increase investments in channel and product diversification. We raised our 2025 net income projection by 5% to account for operating leverage and favorable input costs, but left our longer-term forecasts largely unchanged. Consequently, we retain Haitian’s fair value estimate at CNY 42 per share, which implies 33 times 2025 price/earnings and 23 times enterprise value/EBITDA. We view shares as fairly valued.

Foshan Haitian Flavouring and Food strives to command competitive advantage in the condiment industry in China through scale, with large sales volume and high velocity creating stickiness among distributor partners and driving down operating costs. The company’s operating expenses ratio is among the lowest versus peers, resulting in mid-20% net margin levels. Through years of channel endeavors, the firm has set up the most extensive distribution network in the industry. With its focus on the mass market segment, it has established a leadership position across the catering and retail channels in the key condiment category, soy sauce, which contributes more than half of its revenue. Competitive product pricing, enabled by cost advantage, is also key for its major customers, catering outlets. We see this as a virtuous cycle that allows Haitian to maintain its leading position in the industry and generate excess return consistently. Between 2010 and 2020, Haitian’s revenue and net income have grown at CAGRs of 15% and 26%, respectively.

We keep wide-moat Foshan Haitian Flavouring’s earnings forecasts unchanged ahead of the release of its 2024 results in late March. We think the company could achieve the 2024 net profit growth target of 11%, thanks to channel reforms and raw material cost tailwinds. We also maintain our fair value estimate of CNY 42 per share, which implies 34 times 2025 price/earnings, 24 times enterprise value/EBITDA, and a 2% dividend yield. The company is planning a second listing in Hong Kong. Details remain scant about the size of the H-share listing, but the company is targeting domestic and overseas expansion with the proceeds. Overseas revenue currently accounts for a high-single-digit mix for the company. We believe it is sensible for Haitian, as a domestic condiment leader, to eye growth opportunities in overseas markets as a long-term growth strategy.

Wide-moat Foshan Haitian Flavouring and Food Company’s third-quarter results were mixed with revenue above our estimate but net profit in line with the forecast. The ramp of new products across retail and catering channels drove better top-line growth, while alleviating input costs further helped gross margin expansion. Net profit grew 12% year on year, partly affected by asset impairment. We think Haitian is on the right track to refresh its product portfolio as well as recover its competitiveness in the catering channels. We slightly increased our 2024 revenue and net profit estimates due to better third-quarter results but left our long-term forecasts intact. We retain our fair value estimate at CNY 42 per share and think shares are fairly valued now following the rally in recent months.

Foshan Haitian Flavouring and Food strives to command competitive advantage in the condiment industry in China through scale, with large sales volume and high velocity creating stickiness among distributor partners and driving down operating costs. The company’s operating expenses ratio is among the lowest versus peers, resulting in mid-20% net margin levels. Through years of channel endeavors, the firm has set up the most extensive distribution network in the industry. With its focus on the mass market segment, it has established a leadership position across the catering and retail channels in the key condiment category, soy sauce, which contributes more than half of its revenue. Competitive product pricing, enabled by cost advantage, is also key for its major customers, catering outlets. We see this as a virtuous cycle that allows Haitian to maintain its leading position in the industry and generate excess return consistently. Between 2010 and 2020, Haitian’s revenue and net income have grown at CAGRs of 15% and 26%, respectively.

Wide-moat Foshan Haitian Flavouring and Food’s second-quarter results were decent with net profit growing 11% year on year. The company benefited from lower raw material costs and improved sales due to efforts in channel and product diversification. Although Haitian cycled an easy comparison, we think the results are a constructive sign that the company has delivered progress in transitioning its products and channel exposure to meet increasingly diversified demand for condiment products, further supporting its wide moat rating. We retain our forecasts and fair value estimate of CNY 42 per share, which implies 38 times 2024 price/earnings, 27 times enterprise value/EBITDA, and 1.8% dividend yield.