HK Stock Market Move | Foshan Haitian Flavouring and Food (03288) rose more than 6% in trading and will distribute a special dividend tomorrow. Institutions say that the company's A/H discount is expected to converge.

Foshan Haitian Flavouring and Food (03288) rose more than 6% in midday trading, up 4.95% to HK$33.04 at the time of writing, with a trading volume of HK$2.01 billion. On the news front, Foshan Haitian Flavouring and Food announced that it will distribute a special dividend of HK$3.327979 per 10 shares to shareholders as of February 6, 2026 for the 2025 return. Huatai previously pointed out that the company values shareholder returns, with an expected H-share dividend yield reaching 4.2% from 2025 to 2027, highlighting investment value. With a reference to comparable companies' 2026 PE average of 29X (Wind consensus), taking into account the acceleration of overseas market expansion after the Hong Kong listing and the expected weakening of domestic competition, the company should enjoy a valuation premium. Thus, giving the A-share a 2026 PE of 32x, with a 20% discount on the average A/H discount since the H-share listing, it is expected that the Hong Kong stock valuation is relatively low, with a significant boost in dividend yield from dividend increase. The A/H discount is expected to converge.