US stocks new stock preview | Conbet: revenue increased by 64% year-on-year, is the overlooked food packaging track leading the way overseas?

With the continued growth of the global food packaging market, the "pioneering army going abroad" is emerging in this track. On July 11, KBAT Group Inc., the holding company of Shandong Kangbeitte Food Packaging Machinery Co., Ltd. (hereinafter referred to as "Kangbeitte"), updated its prospectus for the initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC), officially announcing plans to list on the Nasdaq Stock Exchange in the United States under the stock code "KBAT". The company had submitted the confidential filing to the SEC on November 15, 2024. According to GMTEight, the company originated from Shandong and is a manufacturing enterprise focusing on food packaging equipment. The company specializes in the design, manufacturing, and sales of custom food packaging machines, and sells products to domestic and foreign customers through established sales and distribution channels. With leading thermoforming vacuum packaging technology and excellent oxygen control capabilities, Kangbeitte is currently at the forefront of CHINA FOODS' packaging machinery going abroad. What kind of development story will the company write on the secondary market with this IPO? Wide business territory, revenue grew by 64.18% year-on-year According to Frost & Sullivan's report, Kangbeitte is a market leader in the manufacture of thermoforming vacuum packaging machines, vacuum gas packaging machines, and body packaging machines in China. At the same time, the company is also one of the leading food packaging machinery manufacturers in China, with a leading advantage in oxygen levels, which can reach 0.2-0.5%, while the industry average in China is 1%. Over the years, the company has produced a variety of food packaging machinery, mainly divided into three categories: thermoforming vacuum packaging machines, vacuum packaging machines, and vacuum gas packaging machines and body packaging machines. In addition, the company also sells vacuum machine parts and replacement components. The company's food packaging machines are suitable for packaging various cooked and raw foods, cured foods, seafood, meat products, soy products, snacks, pharmaceutical products, hardware accessories, and medical devices. Since its establishment, Kangbeitte's packaging equipment has been exported directly or indirectly to many countries and regions, including the United States, Canada, Australia, Mongolia, Kazakhstan, Saudi Arabia, the United Arab Emirates, Armenia, Israel, Indonesia, Vietnam, Thailand, South Korea, Bulgaria, Spain, Switzerland, Romania, Greece, Ecuador, Mexico, Cote d'Ivoire, South Africa, Qatar, Hungary, Venezuela, Malaysia, and Japan. With a diversified business map and a leading position in the market, in recent years, Kangbeitte's revenue has achieved rapid growth, and profitability has steadily improved. According to the prospectus data, in the financial years of 2024 and 2025, the company achieved revenues of 7.3916 million US dollars and 12.1357 million US dollars, respectively, representing a year-on-year growth of 64.18%. The net profit was 1.2588 million US dollars and 1.9312 million US dollars, respectively, representing a year-on-year growth of 53.42%. Both core financial indicators achieved double-digit growth. Looking at the revenue structure, as of the end of the financial years ending March 31, 2024 and 2025, Kangbeitte's food packaging machine sales revenue was 6.8554 million US dollars and 11.3515 million US dollars, accounting for 92.7% and 93.5% of total revenue, respectively. The sales revenue of machine parts and replacement components was 536,200 US dollars and 784,100 US dollars, accounting for 7.3% and 6.5%, respectively. In addition, in terms of regional revenue, according to Frost & Sullivan, one of the company's key competitive advantages is its global sales network, which allows it to distribute products in different markets, take advantage of opportunities in different regions, and adjust its products to meet local needs and regulations. In the financial years ending March 31, 2024, and 2025, international sales were 184,300 US dollars and 229,800 US dollars, accounting for 2.5% and 1.9% of revenue, respectively, indicating a significant advantage in going abroad. In this IPO, Kangbeitte plans to issue 3.75 million shares at a price of 4 to 5 US dollars per share, aiming to raise between 15 million and 18.75 million US dollars. The raised funds will be used to further expand production scale, enhance technical research and development capabilities, and expand the market, injecting new momentum into the company's future development. It can be seen that with stable growth in global orders, the company's business scale is expected to take a new "step". Multiple factors driving industry's rapid growth According to Frost & Sullivan data, China has become one of the fastest-growing markets for food processing and packaging equipment in the world. In recent years, the global food packaging machinery market has shown significant growth, increasing from 269 billion US dollars in 2018 to 379 billion US dollars in 2023, with a Compound Annual Growth Rate (CAGR) of 7.1%. With continuous innovation in packaging technology, increased automation in the food processing industry, and an increased focus on sustainability and eco-friendly solutions, it is expected to reach 514 billion US dollars by 2028, with a CAGR of 6.3%. Among them, the CHINA FOODS packaging machinery market has performed particularly well, increasing from 15.674 billion US dollars in 2018 to 61.518 billion US dollars in 2023, with a compound annual growth rate of 31.5%, growing rapidly. It is projected that by 2028, the market size will increase to 61.518 billion US dollars, with a compound annual growth rate of 31.5%. The rapid growth of the CHINA FOODS packaging machinery market is mainly driven by several factors: Firstly, the rapid development of the ready-to-eat food market in China has significantly increased the demand for food packaging machinery. As consumers increasingly seek convenient dining solutions, the market for pre-made meals and ready-to-eat foods is rapidly expanding. Secondly, the Chinese government's high attention to food safety and stringent regulatory measures have also driven the development of the food packaging machinery industry. In addition, due to the continuous rise in labor costs and the challenging economic environment, companies in the CHINA FOODS packaging industry are increasingly motivated to reduce operating costs and improve efficiency, which has driven the adoption of fully automated food packaging machinery. It should be noted that due to the significant differences in product types, China's food packaging machinery market is relatively fragmented, with thousands of companies. The major companies in the market stand out by having extensive sales channels and advanced technology to provide customized food packaging machinery products that meet specific customer needs. Kangbeitte accounted for 0.1% of the CHINA FOODS packaging machinery market in 2023, and compared to national packaging giants (such as ORG Technology, Zijiang, Yongxin, etc.), the overall scale, brand awareness, and market share are relatively small, and may lack competitiveness in competing for core supplier qualifications of super large national food and beverage brands. However, this does not mean that Kangbeitte does not have sufficient momentum to enjoy the benefits of the industry's rapid growth. Specifically, the key to Kangbeitte's future development may lie in: first, deepening regional development and binding: consolidating its leading position in the local market, deeply bound to core food customers in Shandong and surrounding areas, and providing integrated solutions; second, focusing on segmentation and creating differentiation: establishing technological or cost advantages in specific packaging types (such as cold chain packaging, fresh food packaging, specific food containers) or materials; third, embracing green transformation and actively investing in research and development or cooperating to introduce environmentally friendly materials and technologies, using them as core competitiveness rather than burdens, and seeking policy support; finally, improving automation levels and production efficiency to enhance quality stability. In conclusion, Shandong Kangbeitte is in a track of explosive demand growth for food packaging, but is also facing fierce competition, influenced by policies and environmental factors. Its core strengths lie in deepening the local market in Shandong, flexible service response. With the continued emergence of high-growth characteristics in the CHINA FOODS packaging machinery market, the company still has the potential to write a "steadily rising performance" growth story in the secondary market.