Sichuan Teway Food Group Co., Ltd. (603317.SH) submitted its listing application to the Hong Kong Stock Exchange on October 30, marking its official move toward an A+H dual listing, with China International Capital Corporation (CICC) as the sole sponsor. On November 13, the company further appointed CLSA and CMB International as joint global coordinators.
As a leading player in the fast-moving consumer goods (FMCG) sector, Teway Food specializes in seasonings, including its six core brands: "Haorenjia," "Dahongpao," "Tianche," "Teway Professional Custom Seasonings," "Shicuifang," and "Jiadian Ziwei." These brands cover recipe-based seasonings, hotpot seasonings, sauces, and other compound seasoning products.
Founded in 2007 and listed on the Shanghai Stock Exchange in 2019, Teway Food is often referred to as the "first hotpot seasoning stock." Following its Hong Kong IPO announcement, its stock price rose from CNY 11.4 per share to a peak of CNY 13.57 on November 13 before slightly retreating to CNY 13.08 on November 14, with a market cap of CNY 13.9 billion.
According to Frost & Sullivan, Teway Food ranked as China’s fourth-largest compound seasoning company by 2024 revenue and was the fastest-growing among the top five from 2022 to 2024. It holds a 9.7% share in China’s recipe-based seasoning market (ranking first) and 4.8% in the hotpot seasoning market (ranking second).
However, growth without profit raises concerns. From 2022 to 2024 and the first half of 2025, Teway Food reported revenues of CNY 2.676 billion, CNY 3.126 billion, CNY 3.447 billion, and CNY 1.373 billion, respectively, with profits of CNY 341 million, CNY 466 million, CNY 645 million, and CNY 202 million. In H1 2025, revenue fell 5.7% YoY, while profit dropped 20.6%. By Q3, profit continued to decline, with revenue up only 1.98% YoY to CNY 1.02 billion and net profit down 9.3% to CNY 202 million.
Recipe-based seasonings and hotpot seasonings remain Teway’s main revenue drivers, accounting for 65.9% and 31% of H1 2025 sales, respectively. However, regional sales declined, with western China (its hotpot stronghold) down 3.71%, northern China down 13.14%, and central China down 14.75% YoY in Q3. Sales volumes for both product categories also fell in H1, with hotpot seasoning volumes dropping over 13%.
Despite this, gross margins remained stable at 33.9%, 37.5%, 39.4%, and 38.0% from 2022 to H1 2025, with Q3 2025 at 39.44%.
Teway relies heavily on distributors, contributing 67.6% of H1 2025 revenue, though direct sales (including e-commerce) rose to 32.4%. High sales expenses (CNY 218 million in H1 2025, 15.9% of revenue) and administrative costs (CNY 95.99 million, 7.1% of revenue) contrast with low R&D spending (CNY 16.81 million, 1.2% of revenue). By Q3 2025, R&D expenses fell further to CNY 25.73 million from CNY 32.91 million YoY.
Dealer numbers dropped by 261 to 3,017 by September 2025, while receivables surged to CNY 143 million (up from CNY 78.25 million YoY), with days sales outstanding (DSO) rising to 14.55 days from 5.59 days.
Industry experts note Teway’s challenge lies not just in R&D but in developing a third core category beyond hotpot and fish seasonings. Despite product variety, strategic category expansion is crucial for long-term growth.
For its Hong Kong IPO, Teway plans to use proceeds for branding, expanding sales networks (domestic and overseas), M&A, supply chain upgrades, R&D, and working capital. Notably, its investment cash flow was negative from 2022–2024 (totaling -CNY 20.4 billion), turning positive in Q3 2025 (CNY 76.03 million). Meanwhile, operating cash flow fell 11.94% YoY to CNY 528 million in Q3 2025.
Teway also carries CNY 410 million in goodwill from acquiring Jiadian Ziwei and Shicui Food in 2023–2024. Despite financial pressures, dividends remain generous: CNY 585 million in H1 2025 (against CNY 202 million profit), bringing total dividends since 2022 to CNY 1.288 billion. Controlling shareholders Deng Wen and Tang Lu (holding 74.64% voting rights) received over CNY 960 million.
Since its 2019 listing, Teway has distributed CNY 1.644 billion in dividends—more than half its cumulative net profit of CNY 2.928 billion. Legal risks include 43 judicial cases (48.84% as defendant) and a recent enforcement action for CNY 53,600 in October 2025. Former director Wu Xuejun was also penalized for disclosure violations in 2020–2021.
Management turnover is another concern, with four CFO changes between 2020 and 2024.
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