---
title: "Breaking 100 Yuan! Dumping Moutai for 'Flying Soy Sauce' – Why Are Northbound Funds Aggressively Buying Haitianweiye?"
description: "In May, northbound funds fled the A-share market, dumping stocks like Kweichow Moutai, yet their position in Haitianweiye kept rising. With sustained buying from northbound and domestic institutional funds, Haitianweiye's stock repeatedly hit new highs and broke the 100-yuan mark, prompting some investors to dub it 'Flying Soy Sauce' in a nod to Moutai."
author: "郑灼莹"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2019-06-10"
language: "en"
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# Breaking 100 Yuan! Dumping Moutai for 'Flying Soy Sauce' – Why Are Northbound Funds Aggressively Buying Haitianweiye?

> In May, northbound funds fled the A-share market, dumping stocks like Kweichow Moutai, yet their position in Haitianweiye kept rising. With sustained buying from northbound and domestic institutional funds, Haitianweiye's stock repeatedly hit new highs and broke the 100-yuan mark, prompting some investors to dub it 'Flying Soy Sauce' in a nod to Moutai.

Click to read the original article for details.
Author: Zheng Zhuoying
Source: Global Tiger Finance (ID: laohucaijing01)
In May, northbound funds fled the A-share market, continuously selling off stocks like Kweichow Moutai. However, their position in Haitianweiye kept increasing. Possibly driven by sustained buying from northbound funds and domestic institutional funds, Haitianweiye repeatedly hit new highs and broke the 100-yuan stock price mark. Some investors even compare it to Moutai and call it 'Flying Soy Sauce'.
On May 30, Haitianweiye broke the 100-yuan mark, becoming the 14th stock in the A-share market to reach this level. On May 31, Haitianweiye firmly stood above the 100-yuan mark again. Based on the closing price that day, Haitianweiye's market value reached 270 billion yuan, ranking 26th in total market value in the A-share market.
It's worth noting that SAIC Motor, the leading automotive stock, has a market value of only 280 billion yuan. A soy sauce seller's market value is almost catching up with a car seller, which is truly surprising. In the second quarter, especially since May, the A-share market has been correcting, and northbound funds have been continuously flowing out. However, Haitianweiye is an exception. Not only have northbound funds continued to flow in, but the stock price has also been rising amid fluctuations, being jokingly referred to by investors along with Shanghai Airport and China International Travel Service as the 'Three Swordsmen Who Never Correct'.
Since the beginning of the year, Haitianweiye has risen 47%, and over the past year, it has risen 37%, significantly outperforming the CSI 300 Index this year. In May, northbound funds from the Shanghai and Shenzhen markets totaled over 50 billion yuan in outflows, showing weak confidence in the A-share market. However, since May, the market value and proportion of Haitianweiye held by northbound funds have increased rather than decreased. On May 3, northbound funds held 149 million shares of Haitianweiye, with a market value of 13.278 billion yuan; by May 31, the number of shares had increased to 152 million, and the market value had risen to 15.181 billion yuan.
Regarding such a surge in Haitianweiye, some investors believe that food is all about taste, and soy sauce is a necessity for ordinary people. Condiments occupy half of the market and are irreplaceable in daily life. Especially against the backdrop of rising prices and expectations of price increases for pork, fruits, and other food items, they are optimistic about the future stock price trends of leading food companies.
However, some investors believe that Haitianweiye is overvalued, and the continuous rise in stock price is just institutions huddling together for warmth. Generally speaking, the food industry and public utilities are important targets for institutional defensive strategies, and Haitianweiye happens to be a leading food company with good financial health.
**Northbound Funds Buying, Buying, Buying**
Statistics show that since May 2019, northbound funds have been in a net outflow state on most trading days, with cumulative net outflows of 53.124 billion yuan, a significant increase from April, breaking the historical record for monthly net outflows. The largest net outflow was from Kweichow Moutai, with cumulative net outflows exceeding 10 billion yuan. In contrast, data shows that on May 30 alone, Haitianweiye received net northbound fund purchases of 155 million yuan, and its stock price broke 100 yuan to hit a historical high.
Of course, in addition to the injection of northbound funds, in recent months, several brokerages such as Everbright Securities, Great Wall Securities, and Huatai Securities have given Haitianweiye buy ratings in their research reports. Despite the overall market downturn, investment enthusiasm for Haitianweiye is relatively high, and the overall stock price growth momentum is also strong. After the concentrated injection of northbound funds, Haitianweiye's stock price broke 100 yuan in one go.
Some analysis suggests that the top ten shareholders of Haitianweiye hold a relatively high proportion of shares, and the actual free float is not very large. Every time the stock price falls, only a few hundred million yuan is needed to push it up, which has led to a continuous upward trend in its stock price. The concentrated injection of funds has made the stock price rise more noticeably.
But in fact, northbound funds have long favored Haitianweiye. From Haitianweiye's annual financial reports, Tiger Finance found that as early as 2014, among the shareholders of Haitianweiye was Hong Kong Central Clearing Limited, which held 4.8304 million shares, accounting for about 0.32% of the total shares.
Since then, the shareholding ratio of Hong Kong Central Clearing Limited has shown an increasing trend. From 2015 to 2018, the shareholding ratios were 2.07%, 3.14%, 4.42%, and 5.03%, respectively.
In the first quarter of 2019, Hong Kong capital increased its holdings in Haitianweiye through the Shanghai-Hong Kong Stock Connect, adding 15.03 million shares, accounting for 0.56% of the total share capital. Recently, the shareholding ratio of northbound funds has reached about 5.6%.
Haitianweiye's stock price has been climbing since its listing. It is reported that when Haitianweiye was listed on the A-share market, the issue price was 51.25 yuan per share, with a price-to-earnings ratio of 31.90 times. At the beginning of 2019, its stock price was 66 yuan per share, and on May 30, it broke the 100-yuan mark for the first time, with a cumulative increase of 47.27% this year. Its market value has also reached 270 billion yuan, about six times its value at listing. More notably, its price-to-earnings ratio is as high as 58.32 times, far higher than that of Kweichow Moutai, known as 'Flying Moutai'.
There is a joke in the market that after 'Flying Moutai' comes 'Flying Soy Sauce'. However, two shares of Flying Moutai can only buy one bottle of liquor, but two shares of Haitianweiye stock can buy more than a dozen bottles of soy sauce.
**'Flying Soy Sauce'**
Haitianweiye's predecessor was Foshan Haitian, which started as the Haitian Soy Sauce Factory formed by the merger and reorganization of 25 ancient sauce shops in Foshan. In 1994, Pang Kang changed the company name from Zhujiang Soy Sauce Factory to Foshan Haitian Seasoning Food Company. The following year, the company was restructured from a city-owned enterprise owned by the whole people into a limited liability company, mainly engaged in the production and sales of seasonings, including soy sauce, seasoning paste, oyster sauce, and other series of products.
Under the leadership of Chairman Pang Kang, Haitianweiye conducted brand promotion by advertising on CCTV, expanding production lines, and laying out marketing networks. By the end of 2011, Haitian's marketing network had fully covered 31 provincial-level administrative regions across the country, more than 300 prefecture-level cities, nearly 1,000 county-level markets, and 330,000 terminal marketing outlets.
Haitianweiye's brand awareness is getting higher and higher, and its market share is also increasing. Before its listing, the market had high expectations for it. On February 11, 2014, Haitianweiye successfully listed on the Shanghai Stock Exchange, with an opening price of 61.50 yuan per share on the first day. The stock closed at 66.41 yuan that day, up 29.58% from the issue price, with a market value approaching 50 billion yuan. In the following three trading days, Haitianweiye's stock price continued to rise, once reaching 75 yuan per share, with a corresponding market value of nearly 56 billion yuan, comparable to large-cap blue-chip giants like Wuliangye and Poly Real Estate. At that time, Haitianweiye's price-to-earnings ratio had exceeded 30 times.
At that time, some market analysis said that Wuliangye and Poly Real Estate, which are similar to Haitianweiye, both had average annual net profits of 10 billion yuan, while Haitian's net profit in 2013 was only 1.6 billion yuan. They believed that Haitianweiye was overvalued and lacked substance.
**Excellent Performance, Risks Remain**
In 2018, Haitianweiye achieved operating revenue of 17.034 billion yuan and net profit excluding non-recurring items of 4.124 billion yuan, a year-on-year increase of 21.88%. In the first quarter of 2019, operating revenue increased by 16.95% year-on-year, and net profit excluding non-recurring items increased by 21.46% year-on-year. As the largest seasoning company in the A-share market, Haitianweiye's steady revenue and profit growth have given the market great confidence, making it a 'blue-chip stock'.
Correspondingly, Haitianweiye's price-to-earnings ratio has 'reasonably' increased from over 30 times to over 40 times, and recently to 58.32 times. Many of its natural person shareholders are worth over 100 million yuan, and Chairman Pang Kang has long been on the Hurun China Rich List with a fortune of 32.5 billion yuan.
Although its performance is excellent, one must also be wary of the risks after the surge. At the beginning of its listing, after a few days of frenzy, Haitianweiye's stock price experienced a period of volatility and correction. In 2018, the soy sauce blacklist incident caused Haitianweiye's stock to fall for several consecutive days, gradually exposing the high risks brought by its high price-to-earnings ratio. It is reported that in October 2018, the Jiangsu Provincial Consumer Protection Committee released a comparative test report on soy sauce products. It tested 120 soy sauces from 48 brands and 56 production (agency) enterprises, and the results showed that 29 samples did not meet national standards, including Haitian soy sauce. At that time, the company's price-to-earnings ratio was around 50 times. As soon as the news came out, Haitianweiye's stock price fell for several trading days after the opening, evaporating billions of yuan in market value.


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