Core Viewpoint - The company is positioned as a multinational health products firm focusing on rapidly developing emerging markets in Africa, Latin America, and Central Asia, specializing in the development, manufacturing, and sales of baby diapers, baby pull-ups, sanitary napkins, and wet wipes [1] Group 1: Market Position and Product Offerings - The company ranks first in Africa's baby diaper and sanitary napkin markets by volume, with market shares of 20.3% and 15.6% respectively for 2024 [1] - By revenue, the company holds the second position in Africa's baby diaper and sanitary napkin markets, with market shares of 17.2% and 11.9% respectively for 2024 [1] - The company focuses on creating differentiated products to meet diverse market demands, continuously iterating and upgrading its offerings [1] Group 2: Revenue Contribution and Growth - In the first four months of 2025, the revenue contributions from baby diapers, sanitary napkins, baby pull-ups, and wet wipes were $1.2 million, $0.3 million, $0.1 million, and $0.1 million respectively, accounting for 71.8%, 18.6%, 5.8%, and 3.9% of total revenue [2] - The compound annual growth rates (CAGR) for baby diapers, sanitary napkins, baby pull-ups, and wet wipes from 2022 to 2024 are projected at 16.8%, 34.1%, 8.6%, and 28.5% respectively [2] Group 3: Supply Chain and Production - The company has established a robust global supply chain with localized production to reduce costs, starting local production in Ghana in 2018 [3] - As of April 30, 2025, the company operates eight production facilities across eight African countries, with a total of 51 production lines for baby diapers, baby pull-ups, sanitary napkins, and wet wipes [3] - A new production facility in El Salvador is set to begin operations in August 2025, featuring a production line for baby diapers [3] Group 4: Distribution and Market Penetration - The company has built a wide distribution network, establishing 18 sales branches in 12 countries and a network of over 2,800 wholesalers, distributors, supermarkets, and other retailers [3] - The sales network covers over 80% of the local population in key operating countries, which is crucial for success in the baby and women's hygiene products industry in emerging markets [3] Group 5: Financial Forecast - Projected revenues for the company from 2025 to 2027 are $540 million, $640 million, and $740 million, representing year-on-year growth rates of 19%, 18%, and 16% respectively [4] - Expected net profits for the same period are $110 million, $140 million, and $170 million, with growth rates of 15%, 27%, and 18% respectively [4] - The company is rated as a premium leader in the hygiene products sector, with a favorable outlook for continued growth and expansion in products and markets [4]

Core Viewpoint - The Hang Seng Index Company announced the quarterly review results for the Hang Seng Index series, including the inclusion of LeShuShi (02698) in the Hang Seng Composite Index, effective March 9, 2026 [1] Company Overview - LeShuShi is a multinational hygiene products company focused on rapidly developing emerging markets in Africa, Latin America, and Central Asia, primarily engaged in the development, manufacturing, and sales of baby diapers, baby pull-ups, sanitary napkins, and wet wipes [1] - The company operates under several brands, including Softcare, Veesper, Maya, Cuettie, and Clincleer, with product sales covering over 30 countries in West Africa, East Africa, and Central Africa [1] - A significant portion of the company's revenue during the historical period came from sales to African customers [1] Market Implications - The inclusion of LeShuShi in the Hang Seng Composite Index may lead to its potential addition to the Hong Kong Stock Connect, as it meets various criteria such as market capitalization, liquidity, and listing duration [1]

Group 1 - The Hang Seng Index Company announced the quarterly review results for the Hang Seng Index series as of December 31, 2025, with LeShuShi (02698) being included in the Hang Seng Composite Index [1] - The changes will take effect after the market closes on March 6, 2026, and will be effective from March 9, 2026, with corresponding adjustments to the eligible stocks for the Hong Kong Stock Connect [1] - According to a report by CICC, LeShuShi is likely to be included in the Hong Kong Stock Connect due to meeting various criteria, including market capitalization, liquidity, and listing time [1] Group 2 - LeShuShi is a multinational hygiene products company focused on rapidly developing emerging markets in Africa, Latin America, and Central Asia, primarily engaged in the development, manufacturing, and sales of baby diapers, baby pull-ups, sanitary napkins, and wet wipes [1] - The company operates under brands such as Softcare, Veesper, Maya, Cuettie, and Clincleer, with product sales covering over 30 countries in West Africa, East Africa, and Central Africa [1] - During the historical performance period, the majority of the company's revenue was derived from sales to African customers [1]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage in the market [5][8]. Core Insights - The company is positioned as a leading player in the African hygiene products market, with a strong local competitive advantage [5][10]. - The company focuses on developing, manufacturing, and selling baby diapers, baby pull-ups, sanitary napkins, and wet wipes, catering to diverse market needs [7][14]. - The report highlights the company's robust growth trajectory, with projected revenue and net profit increases over the next few years [8][47]. Financial Performance - As of February 12, 2026, the closing price is HKD 31.26, with a market capitalization of HKD 19,366.09 million [3]. - Revenue projections for 2025-2027 are USD 540.43 million, USD 635.51 million, and USD 738.25 million, respectively, with year-on-year growth rates of 19%, 18%, and 16% [8][47]. - The net profit estimates for the same period are USD 109.83 million, USD 139.94 million, and USD 165.50 million, with growth rates of 15%, 27%, and 18% [8][47]. Market Position - The company holds the top market share in the African baby diaper and sanitary napkin markets, with respective shares of 20.3% and 15.6% based on 2024 sales volume [7][14]. - The company has established a comprehensive distribution network across 12 countries, reaching over 80% of the local population in key markets [42]. Product Strategy - The company employs a multi-brand strategy to cater to various consumer segments, with five major brands targeting different market tiers [26][32]. - The product lines include a total of 341 SKUs, with a focus on continuous product iteration to meet diverse consumer needs [26][32]. Supply Chain and Production - The company has built a robust global supply chain with localized production facilities in eight African countries, enhancing cost efficiency [36][42]. - As of April 30, 2025, the company operates 51 production lines across its facilities, with a total designed capacity for various hygiene products [36][42]. Growth Potential - The report anticipates significant growth in the baby diaper and sanitary napkin segments, driven by increasing birth rates and rising market penetration in Africa [9][47]. - The company is expected to maintain a competitive edge due to its established market presence and strong distribution capabilities [10][50].

Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage in the market [4][6]. Core Insights - The company is a leader in the African hygiene products industry, with a projected revenue of $450 million in 2024 and a three-year CAGR of 19%. Net profit is expected to reach $95 million, with a CAGR of 130% [1][4]. - The African hygiene products market is still in its early industrialization stage, presenting significant growth potential. The market for baby diapers, pull-ups, and sanitary pads is estimated to be $3.8 billion in 2024, with a projected growth rate of approximately 8% over the next five years [2][40]. - The company has established competitive barriers through a multi-brand strategy, a robust local supply chain, and a mature sales network, covering over 30 African countries and reaching more than 80% of the local population [3][62]. Summary by Sections Company Overview - The company, established in 2009, has become a leading brand in Africa's hygiene products sector, launching several brands including Softcare, Maya, Veesper, Cuettie, and Clincleer [1][16]. Market Potential - Africa's GDP is expected to grow at around 4%, with a high birth rate of approximately 4% and a low penetration rate of hygiene products (20% for diapers compared to 80% in developed markets) [2][40]. - The market for disposable hygiene products in Africa is projected to grow significantly, with the baby diaper market expected to reach $2.59 billion by 2024, growing at a CAGR of 6.2% [49]. Competitive Advantages - The company has a diverse brand portfolio that covers various market segments, with Softcare being the leading brand in terms of sales volume [3][62]. - The company has developed a comprehensive sales network and local manufacturing capabilities, with eight factories across Africa, making it the largest local manufacturer in the hygiene products sector [3][62]. Financial Analysis - The company’s revenue is projected to grow from $411 million in 2023 to $454 million in 2024, with a net profit increase from $64.68 million to $95.11 million during the same period [5][24]. - The expected earnings per share for 2024 is $0.19, with a price-to-earnings ratio of 2.39 [5][4]. Investment Forecast - Revenue projections for 2025-2027 are estimated at $529 million, $610 million, and $703 million respectively, with corresponding net profits of $115 million, $133 million, and $156 million [4][5].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of 38 HKD [3][6]. Core Insights - The company, Leshu Shi (2698.HK), is a leading multinational hygiene products company focused on emerging markets such as Africa, Latin America, and Central Asia, specializing in baby diapers, pull-ups, sanitary napkins, and wet wipes [1][2]. - Revenue for the first four months of 2024 and 2025 was 320 million and 160 million USD, respectively, showing year-on-year growth of 10.5% and 15.5%, while net profit was 95 million and 31 million USD, reflecting growth of 47.0% and 8.4% [1]. - The company is expected to see net profits of 106 million, 129 million, and 147 million USD for 2025, 2026, and 2027, respectively, with corresponding EPS of 0.18, 0.21, and 0.24 USD [1][3]. Company Overview - Leshu Shi has established a broad sales network across over 30 countries in Africa, Latin America, and Central Asia, with 18 sales branches and over 2,800 wholesalers, distributors, supermarkets, and other retailers [2][17]. - The company has a strong local production presence in Africa with 8 factories, making it the largest manufacturer of hygiene products in the region [2][20]. Business Growth Factors - Future growth is anticipated from external factors such as demographic growth in emerging markets, ongoing consumption upgrades, and increased penetration of hygiene products [3][12]. - Internal growth factors include localized production creating a competitive moat, extensive sales channel coverage, continuous product category expansion, and replicating successful market experiences in other emerging markets [3][12]. Financial and Valuation Summary - The company’s projected revenues for 2025, 2026, and 2027 are 541 million, 627 million, and 711 million USD, with growth rates of 19.1%, 15.9%, and 13.4% respectively [4]. - The net profit margins are expected to remain stable, with net profit margins of 19.6%, 20.5%, and 20.7% for the years 2025, 2026, and 2027 [4]. - The company is valued at a 23x PE ratio for 2026, corresponding to a stock price of 38 HKD [3][4]. Market Characteristics - Emerging markets, particularly Africa, are characterized by strong economic growth, a young population driving consumption upgrades, and high import demand due to lower local industrialization [46][47]. - The African market is expected to see significant growth in the hygiene products sector, with the baby diaper market projected to grow from 2.037 billion USD in 2020 to 2.590 billion USD by 2024, reflecting a CAGR of approximately 6.2% [49][53].

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [4]. Core Insights - The company, Leshu Shi, is a leading player in the African hygiene products market, specializing in baby diapers and sanitary napkins, with the highest market share in both categories. The African market benefits from a demographic dividend and low penetration rates in these product categories, indicating significant growth potential. The company's strong localization capabilities are expected to drive long-term stable growth as it expands its distribution channels and product categories in Africa and replicates its operational model in other emerging markets [5][15]. Financial Summary - The company’s revenue is projected to grow from $411 million in 2023 to $712 million by 2027, with a compound annual growth rate (CAGR) of 19.2% from 2022 to 2024. The net profit is expected to increase from $65 million in 2023 to $154 million in 2027, with a CAGR of 127.4% during the same period. The gross margin is forecasted to remain stable around 35% [8][21][25]. Product and Market Positioning - Leshu Shi has developed a multi-brand strategy with a diverse product matrix, including four major brands in the baby care segment and three in the women's care segment. The company has a total of 263 SKUs for baby diapers and 44 for sanitary napkins, catering to various local needs. The company maintains the leading sales market share in Africa for both product categories, with significant growth rates outpacing competitors [6][15]. Production and Distribution Capabilities - The company operates eight factories across eight African countries, with a focus on local production to enhance cost efficiency. It has established a deep distribution network that covers over 30 countries, reaching more than 80% of the local population. This extensive network and understanding of local markets provide a competitive edge over international brands [7][15]. Regional Performance - Revenue growth varies by region, with West Africa showing stable growth, East Africa as a high-growth area, and Central Africa experiencing rapid expansion. Latin America is emerging as a new growth engine, with revenue increasing significantly from $0.004 million in 2022 to $0.09 million in 2024 [31][35][38]. Cash Flow and Liquidity - The company has seen a substantial increase in operating cash flow, rising from $0.14 million in 2022 to $1.10 million in 2024, with a CAGR of 184.1%. Cash and cash equivalents have also grown from $0.22 million to $0.31 million during the same period, indicating improved liquidity and financial stability [42][44].

Investment Rating - The report gives a "Buy" rating for the company, Softcare, for the first time [6]. Core Insights - Softcare is a multinational hygiene products company focused on emerging markets, particularly in Africa, Latin America, and Central Asia. It has established itself as a leader in the African baby diaper and sanitary napkin markets, holding market shares of 20.3% and 15.6% respectively as of 2024 [6][13]. - The company has experienced rapid revenue and profit growth due to the establishment of local production facilities in Africa, with projected revenues of $454 million in 2024, reflecting a year-on-year growth of 10.5% [5][17]. - The African market is expected to see significant growth in the hygiene products sector, driven by a young population, increasing urbanization, and rising disposable incomes [19][28]. Summary by Sections Company Overview - Softcare launched its first product, Softcare baby diapers, in Ghana in 2009 and has since expanded its brand portfolio to include Maya, Veesper, Cuettie, and Clincleer, catering to various consumer segments [10][13]. - The company has established eight production facilities across different African countries, enhancing its manufacturing capabilities and supply chain efficiency [10][41]. Market Potential - The African economy is projected to grow at a rate of 4.1% in 2025, which is higher than the global average, providing a favorable environment for the growth of hygiene products [19]. - The young population in Africa, with over 60% under the age of 30, and a birth rate of approximately 3.2% from 2020 to 2024, is expected to drive demand for baby products [23][24]. Competitive Advantages - Softcare has a well-defined brand matrix and has received multiple awards, enhancing its brand recognition and consumer trust [36][37]. - The company operates a robust distribution network with over 2,800 wholesalers, distributors, and retailers across Africa, Latin America, and Central Asia, ensuring extensive market reach [45][46]. - The local production strategy allows Softcare to reduce costs and improve product quality, with a significant increase in gross margins for its products from 2022 to 2024 [43][41]. Financial Projections - The company forecasts revenues of $534 million in 2025, with a compound annual growth rate (CAGR) of 17% from 2025 to 2027 [5][6]. - The projected net profit for 2024 is $95 million, with a significant increase in profitability expected in the coming years [5][17].

Investment Rating - The report gives a "Strong Buy" investment rating for the company [2][7]. Core Insights - The company has achieved sustained high growth and improved profitability through deep localization in emerging markets, with a projected CAGR of 19% for revenue and 130% for adjusted net profit from 2022 to 2024 [6][7]. - The company is a leading cross-border hygiene product platform focused on emerging markets, primarily in Africa, Latin America, and Central Asia, with a strong competitive advantage in its core product categories [6][12]. Company Overview - The company specializes in hygiene products, primarily baby diapers and sanitary napkins, holding the number one sales position in Africa for these categories [6][12]. - The company has transitioned from a trade model to localized supply, manufacturing, and deep distribution, establishing a competitive edge in production, supply, and sales [6][12][14]. Financial Analysis - Revenue is projected to grow from $320 million in 2022 to $454 million in 2024, with respective year-on-year growth rates of 28.59% and 10.46% [20][21]. - Adjusted net profit is expected to rise significantly, with growth rates of 251.71% and 51.00% for 2023 and 2024, respectively [21][24]. - The company’s gross margin is expected to improve from 23.0% in 2022 to 35.2% by 2024, driven by lower raw material costs and a higher proportion of higher-margin products [29][30]. Market Expansion - The company is well-positioned to benefit from the expansion of the hygiene product market in emerging economies, particularly in Africa, where high birth rates and low penetration rates present significant growth opportunities [40][41]. - The African hygiene market is projected to grow at a CAGR of approximately 8% from 2025 to 2029, with the company poised to capture a significant share due to its established presence [42][43]. Competitive Advantages - The company has built a strong moat through deep localization, with 51 production lines across eight African countries, covering 80% of the local population [50][51]. - The company’s early entry into the market has allowed it to establish a comprehensive production, supply, and sales system, enhancing its competitive position [50][51].

Core Viewpoint - Leshu Shih is the leading multinational brand in Africa for diapers and sanitary napkins, with significant growth potential in emerging markets, particularly in Africa and Latin America [1][2][3] Company Overview - Leshu Shih was established in 2009 and is set to be listed on the Hong Kong Stock Exchange in November 2025 [1] - The company's main products include baby diapers, sanitary napkins, baby pull-ups, and wet wipes, with revenue contributions of 75%, 17%, 5%, and 3% respectively by 2024 [1] - In 2024, the company is projected to achieve revenues of $454 million and a net profit of $95 million, with a CAGR of 19% for revenue and 127% for net profit from 2022 to 2024 [1] Market Analysis - The emerging market for sanitary products is growing rapidly, particularly in Africa, which has a high birth rate and low penetration rates [1] - The African market for baby diapers, pull-ups, and sanitary napkins is expected to reach $3.8 billion in 2024, with a CAGR of 6.8% from 2020 to 2024, significantly outpacing growth in developed markets [1] - The Latin American sanitary products market is projected to be $7.7 billion in 2024, approximately double that of Africa, but with a slower growth rate of 2.7% CAGR from 2020 to 2024 [1] Competitive Advantages - Leshu Shih has the most extensive local production and sales network in Africa, which helps reduce tariffs and transportation costs [2] - The pricing strategy for baby diapers ranges from 9 to 20.2 cents per piece, and sanitary napkins from 4.5 to 8.5 cents per piece, significantly lower than competitors [2] - The company operates 18 sales branches across 12 countries, covering over 2,800 wholesalers, distributors, supermarkets, and other retailers [2] - Leshu Shih has developed a multi-brand and product matrix tailored to the African market, offering diverse product options compared to international brands [2] Growth Potential - Leshu Shih is estimated to have over five times growth potential, primarily driven by market expansion in Africa and initial steps in Latin America and Central Asia [3] - The company aims to replicate its successful African market strategy in other regions, with a simplified projection estimating a potential scale of $2.72 billion [3] Profit Forecast and Investment Rating - The company is expected to achieve net profits of $113 million, $133 million, and $153 million from 2025 to 2027, with corresponding year-on-year growth rates of 19.3%, 17.4%, and 15.1% [3] - The projected price-to-earnings ratios for 2025, 2026, and 2027 are 23, 20, and 17 times respectively, with an initial "buy" rating assigned [3]