New Stock Outlook | As the trend of Chinese-style flavors going global, how does Sichuan Teway Food Group tell the story of "Chinese taste" well?

In recent years, Chinese-style catering culture represented by Sichuan and Chongqing hotpot has become popular worldwide, driving the rapid development of the Chinese compound seasoning industry and attracting high attention from the capital market. With the continuous growth in consumer demand for convenient cooking, standardized flavors, and diversified tastes, compound seasoningsespecially subcategories such as hotpot base ingredients and recipe-style seasoningshave become one of the fastest-growing and most promising tracks in the seasoning industry. In this context, leading companies in the industry have accelerated their capital layout. As the "first stock of hotpot base ingredients" on the A-share market, Sichuan Teway Food Group Co., Ltd. (hereinafter referred to as "Sichuan Teway Food Group") recently submitted an H-share listing application to the Hong Kong Stock Exchange, intending to be listed on the main board with CICC as the exclusive sponsor. So, what are the highlights of Sichuan Teway Food Group in this return to the capital market? Steady growth in performance, continuous improvement in profitability According to the prospectus, Sichuan Teway Food Group is a leading and rapidly growing compound seasoning company in China, listed on the Shanghai Stock Exchange in 2019. As per Frost & Sullivan, based on the revenue in 2024, the company is the fourth largest compound seasoning company in China and the fastest-growing among the top five compound seasoning companies in China (2022-2024). According to the same source, based on the revenue in 2024, the company is the largest recipe-style seasoning company and the second largest hotpot seasoning company in China, with market shares of 9.7% and 4.8%, respectively. Sichuan Teway Food Group has built a matrix of six major brands"Haorenjia," "Dahongpao," "Tianche," "Sichuan Teway Food Group Professional Seasoning Customization," "Shicuifang," and "Jiadianziwei," targeting family consumption, catering businesses, regional specialties, customized demands, and young new consumer groups, respectively. This differentiated brand strategy not only avoids internal competition but also creates strong synergies and cross-selling opportunities. In terms of performance, Sichuan Teway Food Group has shown strong growth resilience in recent years. The prospectus shows that from 2022 to 2024, the company's operating income was RMB 2.676 billion, RMB 3.126 billion, and RMB 3.447 billion respectively, with a three-year compound growth rate of 13.5%. During the same period, the net profit was RMB 341 million, RMB 466 million, and RMB 645 million respectively, with a compound growth rate as high as 37.5%, significantly higher than the revenue growth rate, reflecting the company's continuous optimization of cost control and operational efficiency. In the first half of 2025, the company achieved a revenue of RMB 1.373 billion and a net profit of RMB 202 million. Despite being affected by seasonal factors, as the first half of the year is usually the off-peak season for seasoning sales, the company maintained a growth trend in profitability, demonstrating the stability and anti-cyclical capability of its business model. From a detailed breakdown of product offerings, the company has a rich product matrix, including recipe-style seasonings, hotpot seasonings, sauces, and other compound seasoning products. Among them, recipe-style seasonings mainly include seasonings for fish, crayfish, sausages, cured meats, and other recipe-style seasonings. In recent years, revenue from this business segment and its revenue proportion have continued to grow, making it the company's most important source of revenue and growth engine. From 2022 to 2024, revenue from recipe-style seasonings increased from RMB 1.375 billion to RMB 2.086 billion, with a three-year compound growth rate of 18.2%; its share in total revenue also steadily increased from 51.4% in 2022 to 60.5% in 2024, further rising to 65.9% in the first half of 2025. This significant growth is mainly due to the increasing demand from consumers for convenient home cooking and the company's continuous innovation in the direction of "scenario-based + flavor-based." Although the company's traditional advantage business, hotpot seasonings, still maintains stable operations, its growth rate has slowed significantly. From 2022 to 2024, revenue from this segment increased slightly from RMB 1.192 billion to RMB 1.257 billion, with an average annual growth rate of only about 2.9%; the revenue proportion also decreased from 44.5% to 36.5% in 2024, further dropping to 31.0% in the first half of 2025. This reflects the overall saturation of the hotpot base ingredient market, intensified competition, and the weakening of growth momentum due to factors such as changes in consumer habits influenced by dining out and other external factors. Sauces and other compound seasoning products are currently relatively small in scale, with revenue remaining around RMB 10 billion for the past three years, accounting for less than 4% of total revenue. This segment mainly includes instant sauces, rice mixing sauces, barbecue sauces, etc., targeting young consumers and casual dining scenes. Although the volume is limited, these products generally have higher gross profit margins and serve as important testing grounds for flavor innovation and new product trials for the company. At the same time, Sichuan Teway Food Group has established a nationwide omni-channel sales network. As of June 30, 2025, the company has 3,251 distributors, with business covering all provinces and almost all prefecture-level cities in the country, with over 1 million terminal sales outlets. According to Frost & Sullivan, among listed companies focusing on compound seasoning, the company ranks first in terminal coverage. Online, the company actively engages in mainstream e-commerce platforms and social new retail channels; offline, it deeply penetrates supermarkets, convenience stores, catering supply chains, and community group buying scenarios. This "full-channel + full-scene" strategy greatly enhances brand reach efficiency and consumer stickiness. Furthermore, internationalization has become the company's second growth curve. Currently, Sichuan Teway Food Group's products are exported to more than 50 countries and regions, enhancing global brand awareness through establishing overseas distributor systems, participating in international food exhibitions, and localized marketing. This Hong Kong listing is not only a means of financing but also an important endorsement of international brand development, helping to further expand into Southeast Asia, Europe, America, and the Middle East markets. The compound seasoning industry track is highly prosperous, and global layout is accelerating Looking at the industry, the Chinese seasoning market has been steadily growing, with a market size reaching RMB 498.1 billion in 2024, expected to increase to RMB 678.8 billion by 2029, with a compound annual growth rate of 6.4%. Among them, compound seasonings are growing faster, with room for higher penetration and per capita spending compared to the US and Japan. Recipe-style seasonings are the fastest-growing subcategory, with a market size of RMB 21.6 billion in 2024, expected to reach RMB 39 billion by 2029, with a compound annual growth rate of 12.5%, benefiting from the increasing demand from consumers for convenient and restaurant-level flavor solutions. The market size of hotpot seasonings in 2024 was RMB 26.9 billion, expected to increase to RMB 41.5 billion by 2029, with a compound annual growth rate of 9.1%, driven by the dual-wheel drive of standardized dining and pre-packaged needs at home. Currently, there are over 1,000 participants in the Chinese compound seasoning market, with low industry concentration. The top five companies together account for only 15.9% of the market share. In 2024, Sichuan Teway Food Group ranked fourth among Chinese compound seasoning enterprises, with a compound annual growth rate of 13.5% from 2022 to 2024, the fastest among the top five; in the field of recipe-style seasonings, the company ranks first with a market share of 9.7%, approximately 2.6 times the second place, with a high compound annual growth rate of 23.2%; in the hotpot seasoning market, the company ranks second with a market share of 4.8%. In view, as a company already listed on the A-share market, the decision of Sichuan Teway Food Group to seek a secondary listing in Hong Kong has several strategic considerations: firstly, the Hong Kong stock market is more valuation-friendly towards consumer companies, especially giving higher premiums to brands with international potential. Secondly, as an international financial center, Hong Kong can attract more international investors for the company, enhancing its global capital influence. Thirdly, the raised funds will mainly be used for capacity expansion, research and development, overseas channel construction, and brand promotion. Additionally, against the backdrop of escalating trade tensions between China and the US and increased geopolitical uncertainties, the Hong Kong stock market, as a bridge connecting Chinese and global capital, provides a more stable financing platform and risk diversification mechanism for companies. Despite promising prospects, Sichuan Teway Food Group still faces certain challenges. On one hand, competition in the compound seasoning industry is becoming increasingly fierce, with industry giants like Lee Kum Kee and Haitian increasing their investments in the hotpot base ingredient track; on the other hand, fluctuations in raw material prices may affect the stability of gross profit margins. Additionally, cultural differences in overseas markets, food safety regulations, and localization operational capabilities are key tests in the internationalization process. Taking a comprehensive view, from Chengdu Plain to the world's dining tables, Sichuan Teway Food Group's journey to Hong Kong is not only a capital advancement for the company but also a microcosm of the globalized process of the Chinese compound seasoning industry. With its strong research and development capabilities, rigorous quality control system, flexible brand strategies, and leading channel advantages, Sichuan Teway Food Group has built up high competitive barriers. In the future, with the deep integration of pre-made meals and home kitchen scenes, as well as the continued global dissemination of "Chinese flavors," the company is expected to occupy a larger share in the trillion-dollar seasoning market.