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The “soy sauce Ma” that was oversubscribed by 918x—why did I choose to wait instead of buy?
First, the conclusion
Regarding Haitan Flavoring (SH603288) I’ll set the tone with one sentence:
It is an excellent company, but not a cheap deal.
A-shares at 39.94 yuan, H-shares at 36.06 HKD (both as of 2026-04-17 close). Cross-verified with my own research framework, the comprehensive scores are A-shares 6.2/10, H-shares 6.8/10, neither reaching the “Fourfold Resonance” threshold for building a position. My clear and simple conclusion is—Observe and wait, do not initiate a position for now. Set a price alert at 24 yuan for A-shares, and 27 HKD for H-shares, patiently waiting for the square of time.
Second, the contrast scenario: Why did the “seasoning Maotai” with 918 times oversubscription break below the listing price after just ten months?
Let’s rewind to June 2025.
2025-06-16, HKEX, Haitan Flavoring H-shares subscription closes. After the results came out, the entire Hong Kong market was shaken: Hong Kong public offering was oversubscribed 918.15 times, international offering oversubscribed 22.93 times, margin financing approached HKD 400 billion, surpassing Ningde Times and Hengrui Medicine at the same period. This was the hottest IPO among Hong Kong consumer giants since 2023, bar none. Three days later, on June 19, Haitan was listed at the upper limit of the issue price at 36.30 HKD, raising a total of HKD 10.13B, net proceeds of HKD 10.01 billion. The cornerstone investors included Hillhouse HHLR, GIC Singapore, UBS Asset Management, Sequoia, Boyu, Royal Bank of Canada, totaling 8 institutions, with nearly HKD 4.7 billion subscribed, accounting for about 50% of the offering.
Logically, this was a “premium deal” stamped with eight seals by top global capital.
But ten months later, today, H-shares are at 36.06 HKD, down just 0.66% from the issue price, and A-shares have fallen from the peak of 219.58 yuan in January 2021 to 39.94 yuan—losing 68% of their highest market value during the “sauce Maotai” era. On 2025-05-30, Haitan was officially removed from the SSE 50 Index— a signal often overlooked by the market, but it means that from the perspective of the index compilation committee, Haitan is no longer among the “Top 50 most top-tier companies in China’s market”.
On one side, top-tier cornerstone + 918 oversubscription + industry absolute leader; on the other, issue price below listing, removed from SSE 50, market cap down two-thirds from peak. This tension is precisely the most vivid starting point for the “second pricing” story.
Third, look at the fundamentals: this is a beautiful but no longer exciting annual report
On the evening of 2026-03-26, Haitan released FY2025 annual report. Four months ago, I regarded this report as a “trust vote after the double standard controversy,” and the answer I got was: Trust has been restored, but the “growth stock” background has faded.
Revenue: 28.87B yuan (+7.33%)
Net profit attributable to parent: 7.04B yuan (+10.95%)
Gross margin: 40.22% (back to the psychological line of 40%)
Weighted ROE: 19.59% (industry first, far surpassing Qianhe ~8%, Zhongju ~10%)
Operating cash flow: 7.75B yuan (+13.2%)
Cash and equivalents: 24.6 billion yuan + tradable financial assets: 10.1 billion yuan + fixed deposits: 5.88B yuan = Total financial assets over 40 billion yuan
Zero-interest debt, asset-liability ratio 15.38%, current ratio 3.86
Annual cash dividend: 7.95 billion yuan (including interim + special + final dividends, totaling 13.6 yuan per 10 shares), payout ratio reaching 112.95%
Also committed to continuous payout ≥80% for 2025–2027.
Just looking at this table, you’d think it’s a “Moutai-level” financial structure: industry-leading profitability + industry-lowest debt ratio + industry-most generous dividend commitment. In the A-share food and beverage sector, such a report, aside from Kweichow Moutai, is hard to find a second.
But growth has shifted from high-speed to medium-speed—this fact can no longer be hidden.
Looking at the past three years: FY2023 revenue -4.1%, net profit -9.2% (first year of “double decline”) → FY2024 revenue +9.5%, net profit +12.8% (rebound year) → FY2025 revenue +7.3%, net profit +11.0%. Three-year compound growth rate for revenue is only 3.3%, for net profit 3.7%. This is no longer the Haitan of 2019–2021 with “sustainable growth + PE 80×,” but rather a “moderate growth + PE 30×” Haitan.
Market valuation also reflects this change. A-shares PE(TTM) has dropped from a high of 100× in January 2021 to today’s 33.21×, H-shares even lower at 25.55×—this is the scene of “second pricing”: institutions and retail investors are shifting from the “high-growth consumer stock” valuation system to the “quality mature cash cow” valuation system.
Fourth, but more critically, the six red flags in FY2025
Beneath a seemingly perfect annual report, there are six signals that prevent me from answering “heavy position buy” to the investment committee.
Flag 1: Sales expenses soaring abnormally for two consecutive years. FY2024 sales expenses +24.73%, FY2025 +18.70%, nearly 50% increase over two years, far exceeding revenue growth (+9.5% / +7.3%). Sales expense ratio rising from 4.5% to about 6.7%. Such a large increase in this item relative to revenue growth can only be explained by—either proactively investing in long-term channels (strategic investment), or “spending to buy growth” (diluting performance quality). **But Haitan already has 3 million terminals, 94% county coverage, over 6,700 distributors— a company that has reached the ceiling of penetration—why does it still need to spend 25% more each year to “buy” this growth?** This is a question I must ask management as an investor.
Flag 2: Q3 2025 single-quarter net profit growth slowed sharply to +3.4%. Q1 2025 started strong (+8.1% revenue, +14.8% net profit), H1 interim still maintained double digits (+7.6% / +13.3%), but Q3 revenue dropped to +2.5%, net profit only +3.4%. This is the first quarterly report after the H-shares IPO, giving cornerstone investors an awkward answer. Meanwhile, sales expenses in the same quarter continued +20.81%—in other words, every extra yuan spent on grabbing growth does not bring back a yuan of net profit. This is an early sign of “scale inefficiency.”
Flag 3: Abnormal fluctuations in two accounting items in H1 2025. When the interim report was released, I marked two numbers: inventory -31.3% (not consistent with normal production-sales rhythm), accounts payable notes +66.6% (lengthening upstream payment periods). For a fast-moving consumer goods company, a sharp short-term decline in inventory often indicates two scenarios—either large-scale inventory push to distributors, moving stock off the company’s books into channels; or production-sales rhythm disorder. Meanwhile, a significant increase in accounts payable suggests the company is extending supplier payment terms—very unusual for a company with 40 billion cash on the books. Has this signal been corrected in the FY2025 report? A public question from Sina Finance on 2026-03-26 asked: **“What is the truth behind 28.8 billion revenue? How much of the double-digit profit growth is contributed by dealer prepayments?”** Once this doubt was raised, the market was shaken.
Flag 4: Announcement in 2024 of planning to invest 10 billion yuan in financial products. On 2025-04-06, Sina Finance disclosed Haitan’s announcement of planning to use self-owned funds to roll over 10 billion yuan in financial products. As of FY2025 report, cash and equivalents: 24.6 billion yuan + tradable financial assets: 10.1 billion yuan + fixed deposits: 300B yuan, totaling over 40 billion yuan in financial assets. For a consumer goods company, excess cash isn’t necessarily bad, but when a company’s “idle money” exceeds five times its annual net profit, and it actively chooses to buy financial products instead of reinvesting in core business, it’s a clear message from management—“We can’t find new high-return reinvestment projects.” This is a classic “growth bottleneck” signal for mature giants. Buffett, when Berkshire’s cash grew from hundreds of billions to 3 trillion, was also in this state.
Flag 5: Removed from SSE 50 index on 2025-05-30. This signal is often overlooked. The SSE 50 index components are selected based on “free float market cap + trading volume.” Being removed means Haitan has fallen behind among China’s top 50 weighted stocks. Four years ago, Haitan was among the top 20 in SSE 50; today, it’s out—downgraded from “China market landmark” to “industry-leading blue chip,” an official stamp of second pricing.
Flag 6: GIC’s first reduction of holdings in H-shares on 2026-04-01. As one of the cornerstone investors, GIC Singapore reduced 45,010 shares at 37.21 HKD. The amount is small, with minimal impact on proportion, but this is the first public reduction by a cornerstone investor after the six-month lock-up period. The market will watch the other 7 cornerstone investors—especially Hillhouse HHLR’s USD 350 million stake—to see if they follow suit.
Each of these six red flags alone isn’t enough to veto, but together they paint a very clear picture: Haitan is undergoing an identity shift from “Sauce Maotai” to “Old Brand Quality Blue Chip.” It remains respectable, but the discipline for buying must be adjusted accordingly.
Fifth, the truth about valuation: 14 methods tell you whether Haitan is expensive or cheap
Using more than 10 industry-appropriate valuation methods for cross-validation of intrinsic value. For Haitan, a mature leader with A+H dual platforms, complete analyst coverage, and stable dividends, valuation methods are plentiful. I’ve calculated 14 A-shares valuation methods and 12 H-shares methods.
Summary of 14 A-share valuation methods (EPS₂₅=1.23 yuan / BVPS≈6.77 yuan):
Median of these 14 valuation estimates: approximately 34.50 yuan, weighted average about 37.80 yuan. The current price of 39.94 yuan is a 15.8% premium over the median, and 5.7% over the average—this isn’t “mispriced,” but a “slight premium” state.
More critically, the “5-fold safety margin point” is at 17.25 yuan—my framework’s deep-water threshold. 39.94 yuan is 56.8% below 17.25 yuan, meaning buying now offers no safety margin and is twice as far from the “shockingly cheap” price.
H-shares valuation (EPS₂₅=1.41 HKD / BVPS=8.13 HKD):
Median valuation: about 39.00 HKD, weighted average about 40.50 HKD. The current price of 36.06 HKD is a 7.4% discount to the median, slightly undervalued, but still 19.50 HKD away from the 5-fold safety margin—about 45.9% downside potential.
Combining A+H valuation tables yields a key conclusion: H-shares are indeed cheaper than A-shares, but neither reaches my heavy position threshold. The current AH premium is +27.1%, at the upper end of the +10–20% typical for consumer stocks. From an arbitrage perspective: Hong Kong Stock Connect favors H-shares (PE 25.55× vs. A-shares 33.21×, about 30% cheaper); pure A-share investors should patiently wait for a pullback.
Sixth, is a 3-year 5x return feasible? Quantitative validation says no
My framework asks for a strict question for each heavy position: “Can I see 5x in 3 years?” This is a hard metric, not romantic rhetoric.
Current price 39.94 yuan × 5 = target price of 200 yuan in 3 years—returning close to the peak of the “Sauce Maotai” era in 2021. To reach this target, there are only two mathematical paths:
Path 1: EPS doubles in three years (from 1.23 yuan in 2025 to 2.46 yuan in 2028), implying an annualized net profit growth of 26%. Comparing to Haitan’s actual growth in FY2024–2025 (+10–13%), industry average +7%, and Haitan’s own 3-year CAGR of only 3.7%, this path is practically impossible.
Path 2: Valuation expansion to PE 80–100× (bubble-level). Last occurred during the 2020–2021 “Maotai index” rally, under the premise of “perpetual growth” valuation, ultra-low interest rates, and southbound capital frenzy. Today’s macro environment is completely different: PE 80× in current market conditions is highly unlikely.
More realistic three-year scenarios:
Even in the most optimistic scenario, the 3-year return is only about 2x, far from the 5x target.
This means: in my discipline checklist, Haitan triggers two red lines—“don’t buy above 50% premium” (current A-shares +16%) and “don’t buy companies with less than 3x upside in 3 years” (quantitative estimate only 1.2–2.1x). If two or more of the 12 rules are triggered, my position initiation command automatically resets.
Seventh, then at what price is it worth buying?
I’ve set four levels of position-building zones.
A-shares 603288 (current 39.94 yuan):
H-shares 03288 (current 36.06 HKD):
Priority: H-shares > A-shares. Same fundamentals, H-shares are about 30% cheaper, and overseas investors can directly allocate. The downside: lower liquidity (A-shares daily turnover 700–1.5 billion yuan vs. H-shares 5 billion HKD), and 10% dividend tax.
Positioning discipline: each level in 3 batches, price difference ±5%; total combined limit for A+H is 20% (single-rule limit).
Before entering, wait 24 hours after the “intent to buy”—a personal emotional cooling-off period.
Eighth, three principles for post-investment review: Haitan has passed two and a half thresholds
My post-investment review principles are—Leading profitable business with high growth, intrinsic value misunderstood and now cheap, mission/vision/strategy/pace/goals/team capability aligned.
Haitan has passed “team synergy” (Cheng Xue took over stably in September 2024, ESOP tied to performance, 70-year focus on core business), passed “leading profitable” (leading ✓, profitable ✓, high growth ✗), but not “cheap” (A-shares at premium, H-shares slightly discounted, both far from 50% discount).
1.5/3 passes, not meeting my “full green” position threshold.
Ninth, when will my judgment change? My monitoring checklist
In the next 6 months, I will watch for key points:
First, 2026-04-28 Q1 2026 quarterly report. This is the management’s response to the Q3 slowdown. If Q1 net profit growth <5%, I will lower the comprehensive score to 5.5/10, moving it from “observation pool” to “temporarily shelved.”
Second, the inflection point of sales expense ratio. If in FY2026 H1, sales expenses continue +15% or more, and revenue growth <+8%, it indicates the “spending to buy growth” model is entrenched, and performance quality will further decline.
Third, the scale of related-party factoring, small loans, prepayments loop. This is the most sensitive area for media and regulators. If the scale exceeds 10% of annual revenue (currently about 3.4%), it triggers my red line, and I will immediately abandon research.
Fourth, changes in holdings of other cornerstone investors after GIC. Especially Hillhouse HHLR (USD 350 million cornerstone)—their actions reflect the “real view” of top value investors.
Fifth, the competitive dynamics among Qianhe/Zhongju/Li Jinji. Qianhe faced “cadmium scandal” + earnings decline in 2025, giving Haitan some space; but the new national standard of “zero additives” effective March 2027 is a key timing point—good for Haitan, bad for Qianhe—requiring ongoing monitoring.
Tenth, conclusion: excellent companies are not necessarily buyable now
After all this, returning to my opening statement—Haitan is an excellent company, but not a cheap deal.
It experienced the 2022 “double standard controversy” crisis, the 2022–2023 earnings decline crisis, the 2024–2025 recovery cycle, the 918 oversubscription IPO moment in June 2025, and today’s “second pricing” scene. Its people (Pang Kang + Cheng Xue + 6 concerted actors), its affairs (moat stable, category expansion, overseas launch), its results (ROE 19.59%, industry first; dividend payout ratio 112.95%; 40 billion financial assets backing)—I’ve given high marks across three dimensions.
But the framework’s fourth question—“Is the stock price cheap enough to be at 50% discount?”—it failed; the seventh question—“Can it multiply 5x in 3 years?”—it also failed.
It’s like seeing a good girl in the market, but she’s still dating. You wouldn’t chase her, but you keep her number—just in case she becomes available, and at that moment, she’s at a low point in life, which is your window of opportunity.
For me, Haitan is such a “high-quality observation target.” Not to abandon it, but to give it a fair price—A-shares below 24 yuan, H-shares below 27 HKD—then I will buy; A-shares below 17 yuan, H-shares below 19 HKD—I would heavily allocate.
This discipline may seem strict, but mature markets’ mature companies require mature trading rules.
In this zone, the best investment strategy is “waiting” rather than “buying.”
Risk warning: The opinions expressed herein are solely personal views. The securities involved are not recommendations. Buy or sell at your own risk.