Source | ZD XFBA ID | ZDXFBA Author | ZD XFBA

Facing the dual pressure of "formidable rivals ahead and pursuers behind," Sichuan Teway Food Group Co., Ltd. (hereinafter "Teway Food"), a leader in the compound seasoning industry, hopes to follow the example of Haitian Flavoring & Food Co., Ltd. by actively seeking an "A+H" dual listing to tap into new growth in the international market and escape the "involution" (intense competition).

Last night (October 30), Teway Food, while disclosing its Q3 2025 report, formally submitted a Hong Kong listing application to the Hong Kong Stock Exchange. This marks a key step for Teway Food to accelerate its international expansion.

Improved Performance, But Pressure Remains

According to the company's financial report, in the first three quarters of this year, Teway Food achieved operating revenue of RMB 2.411 billion (RMB, same below), a year-on-year increase of 1.98%; net profit attributable to shareholders of the parent company was RMB 392 million, a year-on-year decrease of 9.3%; and net profit attributable to shareholders after deducting non-recurring gains and losses was RMB 357 million, a year-on-year decrease of 8.13%.

In the third quarter alone, Teway Food achieved revenue of RMB 1.02 billion, a year-on-year increase of 13.79%; net profit attributable to shareholders was RMB 202 million, an increase of 8.93%; and net profit after deducting non-recurring gains and losses was RMB 195 million, an increase of 8.84%.

From this, it is clear that despite the significant improvement in Teway Food's performance in the third quarter, it has not yet reversed the overall decline in net profit.

Image source: Teway Food's announcement of key operating data for Q3 2025 (screenshot)

At the product level, in the first three quarters of this year, Teway Food's hot pot seasoning (including base and dipping sauces) achieved revenue of RMB 806 million, a year-on-year increase of 1.59%; recipe-based seasonings achieved revenue of RMB 1.339 billion, a year-on-year increase of 5.26%; sausage and cured meat seasonings achieved revenue of RMB 158 million, a year-on-year decrease of 27.87%; and other products achieved revenue of RMB 91.252 million, a year-on-year increase of 20.01%.

In the third quarter, Teway Food's hot pot seasoning, recipe-based seasonings, and sausage and cured meat seasonings achieved sales revenue of RMB 379 million, RMB 443 million, and RMB 145 million, respectively, with year-on-year growth rates of 25.0%, 14.9%, and -22.2%. This shows that in the second half of the year, as hot pot seasoning enters the consumption peak season, shipments of Teway Food's hot pot seasoning products have increased significantly.

By channel, in the first three quarters, Teway Food's revenue from offline channels was RMB 1.764 billion, a year-on-year decrease of 10.35%; revenue from online channels was RMB 631 million, a year-on-year increase of 60.27%. In the third quarter alone, Teway Food's online and offline revenue were RMB 223 million and RMB 790 million, respectively, with year-on-year growth rates of 60.56% and 4.47%.

It is easy to understand that the entire seasoning industry is in a state of extreme involution, with terminal sales generally under pressure. Teway Food only began to improve in the second half of the year. At the same time, Teway Food acquired advantageous online brands such as Shicui Food and Jiadian Ziwei through mergers and acquisitions, driving its online performance to grow rapidly. According to the prospectus disclosed by Teway Food on the Hong Kong Stock Exchange, as of the first half of this year, Teway Food operated 72 self-operated online stores.

Despite this, Teway Food's overall performance still faces enormous growth pressure.

Looking at a longer time frame, the first three quarters of this year mark the first time since Teway Food's A-share listing in April 2019 that its revenue, net profit, and net profit after deducting non-recurring gains and losses have all seen a "triple decline," except for the overall decline in 2021. Especially at the net profit level, it has shown negative growth for the first time.

Intensifying Competition

According to Teway Food's prospectus for its Hong Kong listing, by revenue, the Chinese compound seasoning market reached RMB 126.5 billion in 2024, accounting for 25.4% of the overall seasoning market. Benefiting from the expansion of the catering industry, increased household penetration, and growing consumer preference for convenient and diverse flavors, the domestic compound seasoning market is expected to reach RMB 202.9 billion by 2029, with its share of the overall seasoning market increasing to 29.9%. From 2024 to 2029, the compound annual growth rate of compound seasonings is expected to reach 9.9%, significantly higher than the 5.1% for single seasonings.

Image source: Teway Food prospectus (screenshot)

In the prospectus, Teway Food claims to be a leading and rapidly growing compound seasoning company in China. According to Frost & Sullivan, by 2024 revenue, we are the fourth-largest compound seasoning company in China and the fastest-growing among the top five compound seasoning companies in China (2022-2024). According to the same source, by 2024 revenue, we are the largest recipe-based seasoning company and the second-largest hot pot seasoning company in China, with market shares of 9.7% and 4.8%, respectively.

Image source: Teway Food prospectus (screenshot)

As Teway Food's old rival, Yihai International, a company associated with Haidilao, is not as strong as Teway Food in recipe-based seasonings, but it is significantly stronger in the hot pot seasoning category.

For example, in 2024, Teway Food's revenue from recipe-based seasonings and hot pot seasonings was RMB 1.771 billion and RMB 1.265 billion, respectively, while Yihai International's revenue from recipe-based seasonings and hot pot seasonings was RMB 4.085 billion and RMB 787 million, respectively. In the first half of this year, Teway Food's revenue from recipe-based seasonings and hot pot seasonings was RMB 896 million and RMB 428 million, respectively, while Yihai International's revenue from recipe-based seasonings and hot pot seasonings was RMB 1.683 billion and RMB 492 million, respectively.

It is worth noting that compared to Teway Food, Yihai International is at a disadvantage in recipe-based seasonings but has been catching up. In 2024, Yihai International's growth rate for recipe-based seasonings was 26.6%, while Teway Food's growth rate was only 16.56%; in the first half of this year, Yihai International's growth rate was 8.2%, while Teway Food's was only 1.06%.

However, Teway Food faces far more competitors than just Yihai International in both recipe-based seasonings and hot pot seasonings. Teway Food admits in its prospectus that the number of market participants in China's compound seasoning industry exceeds 1,000, with more than 500 participants in both the recipe-based seasoning and hot pot seasoning industries. For example, in recipe-based seasonings, there are also Totole, Jixiangju, Lijilebao, Tai Er, etc.; in hot pot seasonings, there are Qiaotou, Hongjiujiu, Dezhuang, Caoyuan Hongtaiyang, etc.

In recipe-based seasonings, although Teway Food has launched many products such as fish seasoning, crayfish seasoning, Guizhou sour soup, mala xiangguo, yellow braised chicken, Japanese sukiyaki, Japanese oden, and Korean kimchi soup, fish seasoning remains its largest single product.

In recent years, almost all compound seasoning companies have begun to lay out recipe-based seasoning categories, further intensifying market competition. Last year, Teway Food sparked industry discussion by requiring distributors to prohibit the sale of competing products, including a requirement that distributors not operate recipe-based compound seasoning products under the "Jixiangju" brand, with the core being its suancaiyu (pickled fish) seasoning.

What Is the Purpose of the Hong Kong Listing?

In fact, for the Chinese-style seasoning industry, the main consumer group abroad is still mainly overseas Chinese. So what is Teway Food seeking with its "A+H" listing? Obviously, it is not just to sell hot pot seasoning and suancaiyu seasoning to foreigners.

As early as December 2022, Teway Food planned to issue Global Depositary Receipts (GDRs) and list on the Swiss Stock Exchange, with the raised funds to be used for building new overseas factories or investing in joint ventures, expanding overseas sales channels, etc. In January and February 2023, it received acceptance from the China Securities Regulatory Commission and conditional approval from the Swiss Exchange, but in September 2023, Teway Food voluntarily terminated the GDR issuance plan.

For this Hong Kong listing, Teway Food stated that the raised funds will be used for global sales network construction, global supply chain system construction, industrial investment and mergers and acquisitions, product development and technology improvement, improving automation and digitalization levels, and supplementing working capital.

According to "Shuangliu Release," a Teway Food official said in an interview: "Our vision is to become a globally leading provider of table deliciousness solutions. Currently, our overseas sales network covers more than 50 countries and regions, including the United States, Canada, Australia, etc. In 2024, the company's foreign trade export volume increased by nearly 50% year-on-year."

Like most food companies, Teway Food's overseas business is mainly based on trade exports rather than its own distributor system. Therefore, in the future, Teway Food may use this opportunity to build an overseas distributor team and consolidate its overseas business development.

The so-called global supply chain system construction is undoubtedly similar to the previous attempt to list in Switzerland, hoping to build new overseas factories or invest in joint ventures to strengthen overseas layout. After all, Teway Food's industrial layout is currently concentrated in Sichuan, with four major factories located in Shuangliu and Pidu districts of Chengdu, as well as Zigong and Deyang. Obviously, such a concentrated industrial layout is not conducive to its national or even global expansion.

In fact, compared to other uses of funds, industrial investment and mergers and acquisitions may be the focus. After all, since its listing, Teway Food has embarked on a path of aggressive mergers and acquisitions.

Image source: Teway Food prospectus (screenshot)

Up to now, Teway Food has invested in or acquired the beef tallow company "Hangjia Biology," machinery manufacturer "Haike Machinery," bone broth seasoning producer "Dufengxuan," catering chains "Haotian Weimei" and "Mobi Youchuang," group meal companies "Maijindi" and "Qianxihe," as well as the aforementioned B-end compound seasoning company "Shicui Food" and C-end compound seasoning brand "Jiadian Ziwei."

On September 10 this year, Teway Food also acquired 55% equity of Shandong Yipin Weixiang Food Technology Co., Ltd. for RMB 154 million through equity transfer and capital increase, achieving control over it.

It can be seen that Teway Food will continue to look for suitable targets and use its "money power" to bring them under its wing, forming a synergistic development trend.

Therefore, for Teway Food, the Hong Kong listing not only allows it to stand on the same "starting line" as its competitor Yihai International, narrowing the gap between them, but also helps Teway Food escape the fierce competition in the domestic market and seek a "new blue ocean" in the global market.