Core Viewpoint - Cathay Securities initiates coverage on Leshushi (02698) with a "Buy" rating, highlighting the company's rapid growth in overseas markets and its position as a leader in the African hygiene products industry, which is expected to continue delivering high performance [1] Group 1: Company Overview - Leshushi is the leading player in the African hygiene products market, with key products including baby diapers, sanitary napkins, baby pull-ups, and wet wipes. In 2024, the revenue share for baby diapers and sanitary napkins is projected to be 75% and 17%, respectively [1] - The company has been operating since 2009 as a division of the Senda Group and is set to officially list on the Hong Kong Stock Exchange on November 10, 2025 [1] Group 2: Market Potential - The African hygiene products market is expected to grow at a CAGR of 7.9% from 2024 to 2029, making it the fastest-growing market globally. The market for baby diapers and sanitary napkins in Africa is highly concentrated, with Leshushi holding a market share of 17.2% and 11.9% by sales value, and leading in sales volume with 20.3% and 15.6% [2] Group 3: Competitive Advantages - Leshushi has a comprehensive brand portfolio covering all price segments, with high brand recognition and repurchase rates in the baby diaper and sanitary napkin categories. The brand awareness for Softcare/Maya/Cuettie in baby products is 89.0% with a repurchase rate of 95.7%, while for Softcare/Veesper/Clincleer in sanitary products, brand awareness is 95.4% with a repurchase rate of 92.0% [3] - The company has established a sales network across over 30 African countries, reaching more than 80% of the local population [3] - Leshushi ranks first in production capacity in both the African baby diaper and sanitary napkin markets, achieving 100% local supply [3] Group 4: Future Outlook - On the revenue side, the demand in emerging markets presents significant growth potential, and as an industry leader, Leshushi is expected to further increase its market share. The company also has room for improvement in production capacity utilization, with funds raised earmarked for capacity expansion [4] - On the profit side, the company's gross margin is projected to improve in 2023 and 2024, with brand upgrades and structural optimization expected to enhance profitability, offsetting potential adverse fluctuations in raw material costs [4]