Foshan Haitian Flavoring & Food Co. Ltd. - the world's largest soy sauce manufacturer by sales - saw its market valuation climb to more than 600 billion yuan ($84 billion) after its share price rose this week. The company's share price took a hop after it reported strong first-half earnings that reflected demand for its home-cooking products.
Foshan Haitian's shares reached a high of 202.97 yuan a share in Thursday trading. Based on Thursday's latest trading price Foshan Haitian's market valuation is hovering around 611.41 billion yuan. Over the past two months, the company's market valuation has risen by more than 200 billion yuan. The appreciation started Tuesday when the shares moved 2.99 percent to 188.68 yuan a share on the Shanghai Stock Exchange.
The gain in value has placed the company in the top 10 listed companies on the exchange in terms of market value.
The increase in market valuation boosted the net worth of chairman Pang Kang by nearly $4 billion in just four months. The sudden rise in market valuation is raising concerns of a bubble.
Foshan Haitian - which produces a variety of condiments and sauces such as vinegar, soy sauces, oyster sauces, MSG and cooking wines - reported better-than-expected first-half earnings. Over the period, the company reported a 14.12 percent year-on-year increase in revenue to 11.6 billion yuan. Net profit rose 18.27 percent on year to 3.2 billion yuan.
The company attributed its better-than-expected performance party to earlier spending to improve its e-commerce sales channels. This paid off in the second quarter as the company generated more than half of its sales online. During the height of the pandemic, consumption of home-cooking products increased as people were forced to stay at home and cook their own meals.
Industry experts said part of the company's success was a result of its aggressive efforts to expand its network to tap into more smaller-level markets. The company increased its first-tier distributors by 627 to more than 6,430 by the end of the first six months.
