As the aroma of Sichuan hotpot spreads to international dining tables, the condiment companies behind it are accelerating their embrace of global capital markets. At the end of October, Sichuan Teway Food Group Co., Ltd. (603317.SH) submitted its listing application to the Hong Kong Stock Exchange, aiming to expand its overseas footprint and capture international markets.
The news of its Hong Kong IPO has spurred a roughly 20% surge in Teway Food’s stock price since the filing, pushing its market capitalization above 14.3 billion yuan. Despite ample liquidity—holding over 2.3 billion yuan in wealth management products as of June 2025—the company faces performance pressures. In the first half of 2025, revenue and net profit both declined due to reduced sales across its three major product lines: recipe-based seasonings, hotpot seasonings, and sauces.
However, a recovery emerged in Q3 2025, with revenue rising 13.79% year-on-year to 1.02 billion yuan and net profit growing 8.93% to 202 million yuan, signaling gradual overcoming of short-term challenges.
**From Oil Factory Technician to Hotpot Seasoning Pioneer** Founder Deng Wen, a Chengdu native, studied food engineering at Sichuan University of Science & Engineering and later worked as a technician at Chengdu Grain & Oil Food Factory. In 1993, he took over the struggling Teway Food Factory, which closed six years later. Undeterred, Deng established Chengdu Teway Food Co. in 1999, acquiring trademarks like "Teway," "Hao Ren Jia," and "Da Hong Pao." These brands are now household names in Chinese kitchens.
Deng and his wife, Tang Lu, built a family-run empire, with Teway listing on the Shanghai Stock Exchange in April 2019 as the "first hotpot seasoning stock." Post-listing, the company raised 1.62 billion yuan in a 2020 private placement for production expansion and marketing. After abandoning a Swiss GDR listing in 2023, Teway now eyes Hong Kong.
Before the Hong Kong filing, Deng transferred 21.2 million shares (1.99% stake) for 220 million yuan to private funds linked to him and Tang. Since lock-up expiration, the couple has shifted 78.5 million shares (7.37%) worth ~1.4 billion yuan via 10 private funds, all established ~1 month pre-transfer. They retain 74.41% control.
**IPO Fund Shifts and Delays** Teway’s 2020 private placement initially allocated 1.32 billion yuan to a seasoning industrialization project (canceled in 2022) and 310 million yuan to a base expansion (delayed to 2027). Revised plans redirected funds to three new projects, cutting total investment from 1.63 billion yuan to 1.07 billion yuan. As of June 2025, only 52.07% (556 million yuan) had been deployed.
**Management Turmoil and Insider Selling** Deng serves as executive director, chairman, and president, while Tang is the sole non-executive director. The CFO role changed hands four times between 2020–2024. Ahead of the Hong Kong IPO, multiple directors and executives sold shares, cashing out between 321,200 yuan and 4.19 million yuan from March–April 2025.
**Half-Year Slump and Overseas Push** Despite being dubbed the "hotpot seasoning leader," recipe-based seasonings drive 65.9% of H1 2025 revenue (down 1.07% YoY), while hotpot seasoning sales fell 12.8%. Overall H1 revenue dropped 5.7%, with net profit down 20.59%.
With domestic competition intensifying, Teway is expanding abroad, selling to 50+ countries. The Hong IPO aims to fuel global branding and operations.
**Marketing Splurge and Dividends** Sales and marketing costs hit 738 million yuan over 3.5 years, with sales staff earning ~21,800 yuan/month. R&D spending remained modest at 1% of revenue.
Pre-IPO, Teway paid 1.25 billion yuan in dividends over three years (70–94% payout ratio), with Deng and Tang pocketing 848 million yuan. The company held 2.32 billion yuan in structured deposits mid-2025, alongside 167 million yuan cash and minimal short-term debt.
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