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Foshan Haitian Flavouring and Food Co Ltd Class A 603288

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Stock XSHG Rating as of
CNY 38.00 +0.50 (1.33%)
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Company Report

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Foshan Haitian Earnings: Soft 2023 Sales but Solid Channel Fill Ahead of Lunar New Year in 2024

Jacky Tsang

Wide-moat Foshan Haitian reported 2023 and first-quarter 2024 results, with both revenue and net income below our estimates for 2023. However, we think the first quarter was off to a good start, with both sales and earnings exceeding our projections. We leave our net income projections largely unchanged for 2024-28 and retain our fair value estimate at CNY 47 per share, which implies 42 times 2024 price/earnings, 31 times EV/EBITDA, and 1.4% dividend yield. Haitian’s share prices appeared to have stabilized over the past few quarters, as investors likely see the company bottoming out from the product and channel transition process. We think first-quarter results were constructive signs for its sales recovery, and we continue to see shares as undervalued.

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Price vs Fair Value

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603288 is trading at a 226% premium.
Price
CNY 38.00
Fair Value
CNY 17.00
Uncertainty
High
1-Star Price
CNY 88.71
5-Star Price
CNY 55.60
Economic Moat
Crxlw
Capital Allocation
Wwjyhxvn

Bulls Say, Bears Say

Bulls

As an industry leader, Haitian could benefit from market consolidation in the soy sauce sector in China.

Bears

Haitian’s sales growth could slow as the soy sauce market matures, while premiumization is yet to materialize.

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Trading Information

Previous Close Price
CNY 37.50
Day Range
CNY 37.23–38.04
52-Week Range
CNY 33.02–55.65
Bid/Ask
CNY 38.00 / CNY 38.01
Market Cap
CNY 211.30 Bil
Volume/Avg
10.3 Mil / 9.5 Mil

Key Statistics

Price/Earnings (Normalized)
36.92
Price/Sales
8.36
Dividend Yield (Trailing)
1.84%
Dividend Yield (Forward)
1.84%
Total Yield
1.84%

Company Profile

Foshan Haitian Flavouring and Food Company was founded in 1955 through the consolidation of 25 condiment producers in Foshan. The company mainly manufactures soy sauces, oyster sauces, dipping sauces, and seasoning sauces. It is the leading condiment producer with number-one market share in soy sauces and oyster sauces in China.
Sector
Consumer Defensive
Industry
Packaged Foods
Stock Style Box
Large Core
Total Number of Employees
7,313
Website
http://www.haitian-food.com

Competitors

Valuation

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Metric
603288
2802
MKC
Price/Earnings (Normalized)
 36.9235.5627.28
Price/Book Value
 7.003.863.82
Price/Sales
 8.362.223.00
Price/Cash Flow
 36.8119.7820.13
Price/Earnings
603288
2802
MKC

Financial Strength

Metric
603288
2802
MKC
Quick Ratio
 4.640.800.25
Current Ratio
 5.001.370.68
Interest Coverage
 462.1311.554.91
Quick Ratio
603288
2802
MKC

Profitability

Metric
603288
2802
MKC
Return on Assets (Normalized)
 15.78%5.79%5.67%
Return on Equity (Normalized)
 19.97%12.00%14.63%
Return on Invested Capital (Normalized)
 17.60%7.93%8.97%
Return on Assets
603288
2802
MKC
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