Equity Analysis /
China

CN : Foshan Haitian Flavouring - Catering channel recovery expected to boost growth

    Lei Yang
    Lei Yang

    Research Analyst

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    CGS-CIMB
    4 April 2021
    Published byCGS-CIMB

    Haitian announced that FY20 sales grew by 15.1% yoy to Rmb22.8bn, and net profit rose by 19.6% yoy to Rmb6.5bn, 4% above our estimate, driven by a gradual recovery in the catering channel in 2H20 and better control of expenses. With the catering channel recovering in FY21F, we expect Haitian’s sales to grow by 16% yoy to Rmb26.4bn, with net profit up by 18.6% yoy to Rmb7.6bn. Haitian announced no price hikes in the near term; we expect it to mitigate raw material price increases through a product mix upgrade and better control of expenses. Reiterate ADD with a new TP of Rmb209.