Preview of new stocks | Global horticulture: Stable revenue vs. "roller coaster" profits = "A-side" and "B-side" of flowerpot industry leader

On June 25, 2026, Global Horticulture Limited (referred to as "Global Horticulture") once again submitted its prospectus to the Hong Kong Stock Exchange, with China International Capital Corporation Limited (CICC) as the sole sponsor. This is the company's second attempt after its initial submission on December 19, 2025. Founded by former programmer Lu Jingzhang in 2004, the company took 21 years to become the global leader in a seemingly insignificant category - decorative plastic flower pots. Based on the revenue in 2024 and 2025, Global Horticulture holds a market share of 4.6% among global manufacturers of decorative plastic flower pots, and is also the largest exporter among Chinese flower pot manufacturers. The company has been a long-time supplier to major North American retailers, including Lowe's, Walmart, Sam's Club, and Costco. From 2023 to 2025, the company achieved revenues of 358 million Hong Kong dollars, 474 million Hong Kong dollars, and 502 million Hong Kong dollars, with a three-year compound annual growth rate of about 18.5%. However, behind the glamorous "global leader" label, there are structural issues such as high customer concentration, single market dependency, and fluctuating profits. The question remains: is this "hidden champion" worth investing in? Performance "AB side": Steady Revenue Growth vs. "Roller Coaster" Profits Looking at the performance, revenue is steadily increasing while profits fluctuate significantly - this is the most striking performance contrast in Global Horticulture's prospectus. According to the prospectus, the company's revenue in 2023-2025 was 358 million, 474 million, and 502 million Hong Kong dollars, with a three-year compound annual growth rate of 18.5%. The revenue growth curve is smooth, indicating the continued release of overseas courtyard consumption dividend. In terms of product structure, outdoor decorative flower pots are the core pillar, accounting for over 64% of revenue for three years, serving as the core engine of revenue growth; indoor flower pots and other gardening products serve as supplements, with a slight fluctuation in proportion, and overall business structure remains unchanged. Leveraging the popularity of garden lifestyle in North America, the demand for decorative flower pots is expected to be long-lasting, and the company's growth logic in the race track is clear. In contrast to the steady revenue growth, Global Horticulture's net profit shows a significant fluctuation. In 2023, 2024, and 2025, the company's attributable net profit to owners was approximately 79.725 million Hong Kong dollars, 126 million Hong Kong dollars, and 81.801 million Hong Kong dollars respectively. Net profit increased by 57.5% in 2024, but dropped significantly by 35.1% from 126 million Hong Kong dollars in 2025 to 81.8 million Hong Kong dollars in 2025. The fluctuation in profits is much larger than the fluctuation in revenue, revealing the instability of the company's profit quality. The company explained that the decline in net profit in 2025 was mainly due to the high fixed costs in the initial stage of the new factory construction in Cambodia, one-time provision of listing expenses, and seasonal fluctuations in customer purchases. It is worth noting that despite the significant fluctuation in net profit, Global Horticulture's gross profit margin level is unmatched in the industry. According to the prospectus, benefiting from the decrease in raw material resin prices, depreciation of the Renminbi against the US dollar, and improved production efficiency, the company's gross profit margin increased continuously from 50.0% in 2022 to 59.5% in 2024, further rising to 60.0% in the first half of 2025. The gross profit margin for the full year of 2025 was 57.7%. This level far surpasses the industry average gross profit margin of 30%. By product, the gross profit margin of outdoor decorative flower pots decreased from 61.1% in 2024 to 58.9% in 2025, while the gross profit margin of indoor decorative flower pots decreased from 57.9% to 54.9%. It can be seen that even though the company's gross profit margin has decreased, it still remains at a high level. In the manufacturing industry, a gross profit margin of 60% can be considered "printing money" level performance, but the roller coaster ride in Global Horticulture's profit sheet also reminds investors that high gross profit does not mean high certainty. The uncertainty in Global Horticulture's performance can also be seen through its high customer concentration and market concentration. From 2023 to 2025, the company's top five customers accounted for over 93% of revenue, reaching a peak of 96.6% in 2023; with one major customer contributing 56.2% of revenue in the highest year, the top two customers consistently accounted for nearly seventy percent of revenue. This means that the company is heavily dependent on the purchasing decisions of a few major North American retailers. Any adjustments in purchasing strategy or shift to other suppliers by a major customer could have a significant adverse impact on the company's performance. At the same time, Global Horticulture's high market concentration is also noteworthy. From 2022 to 2025, the company's revenue from the US market accounted for as high as 90.1%, 94.8%, 93.5%, and 93.9% respectively, maintaining above 90% for consecutive years. With over ninety percent of revenue coming from a single market, any macro fluctuations from overseas, such as tariff adjustments or changes in consumer confidence, could lead to significant fluctuations in the company's performance. It can be seen that the operating performance of Global Horticulture presents the versatility of a "hidden champion": continuous revenue growth, a gross profit margin far exceeding its peers, demonstrating a competitive barrier in the specific sector; however, the significant fluctuations in profits, the dual concentration of customers and markets, and the obvious slowdown in growth momentum, also constantly remind investors - this seemingly beautiful flower pot may not have as stable a foundation as imagined. Industry Perspective: Under the "Courtyard Economy" Trend, Growth Space is Promising? According to industry reports, the global horticulture market is in a phase of steady expansion. According to data from Torch Insight, the global horticulture market, based on retail sales, has grown from 977 billion US dollars in 2021 to 1.086 trillion US dollars in 2025, with a compound annual growth rate of 2.7%. This growth trajectory reflects the continued enthusiasm for home beautification and the courtyard economy globally, especially in the post-pandemic era. Looking ahead, the continued expansion of the courtyard economy is expected to drive further growth in the global horticulture market, with the overall market expected to grow from 1.086 trillion US dollars in 2025 to 1.351 trillion US dollars by 2030, with a compound annual growth rate of 4.5% during this period. It is worth noting that among all product categories, horticulture flower pots account for approximately 7.1% of the global horticulture market, with a market size of approximately 77 billion US dollars in 2025, and a projected compound annual growth rate of 7.3% from 2025 to 2030, significantly higher than the overall market growth rate. Within the category of horticulture flower pots, decorative flower pots are an important sub-category, accounting for 59.8% of the horticulture flower pot market in 2025. Decorative plastic flower pots constitute the main product category for Global Horticulture, accounting for approximately 51.5% of the decorative flower pot market in terms of revenue. The North American market is the core consumer area for decorative flower pots, with a market size of approximately 18 billion US dollars in 2025, with plastic material accounting for 55.4%, making the market size for this sub-category approximately 10 billion US dollars in 2025. In addition, decorative plastic flower pots recorded a compound annual growth rate of approximately 5.9% from 2021 to 2025, reflecting growth better than the overall decorative flower pot market. As a leading company in the industry, decorative plastic flower pots have a projected compound annual growth rate of 9.4% from 2025 to 2030 - the wind is still blowing, but whether Global Horticulture can take advantage of the wind and soar depends on its ability to unlock the shackles of "single dependency." Summary The IPO of Global Horticulture is a microcosm of Chinese manufacturing excelling in a niche field. From a programmer to the "king of flower pots," Lu Jingzhang took 21 years to make an insignificant category into a global leader. However, the logic of the capital market has never been "bigger is better." The investment value of the company ultimately remains a game of "certainty." The industry provides a long hill thick with snow of certainty: the global horticulture market is steadily advancing at a compound growth rate of 4.5%, with decorative plastic flower pots leading at a growth rate of 9.4%. However, the company itself cannot offer an equivalent level of certainty: over ninety percent of revenue comes from a single market, profits fluctuate significantly with production schedules and exchange rate fluctuations. Therefore, what investors are betting on is not just the present state of the flower pot leader, but whether it can transform the certainty of industry dividends into the certainty of its own growth. And the progress bar for this transformation is just beginning to be read.