LeShu Shi has officially launched its Hong Kong IPO, aiming to become the "first African consumer goods manufacturing stock," capturing investors' attention with the dual advantages of the "African market" and "hygiene products."
In 2025, the Hong Kong stock market continues to witness a capital frenzy among consumer enterprises: the 'Hong Kong Stock Consumption Quartet' collectively surges, with phenomenon-level IPOs such as Mixue Ice City and Haitian emerging, alongside a growing number of consumer companies accelerating their listing through the Hong Kong stock market on their path toward globalization.
Amidst this market boom, Lekeshi, a leading multinational hygiene products company, officially launched its Hong Kong stock offering, aiming to become the 'first African consumer goods manufacturing stock,' entering investors' sights with the dual advantages of the 'African market' and 'hygiene products.'
Based on the subscription performance of the Hong Kong public offering, Lekeshi has already gained significant attention in the initial public offering phase even before its official listing.
As of noon on November 5, when the subscription period ended, the company’s Hong Kong public offering is expected to have been oversubscribed by 2,358 times—over the past five years, there have not been many consumer stocks in Hong Kong public offerings that were oversubscribed more than 2,000 times. A recent notable example is 'the king of frozen capital,' Mixue Ice City, which was oversubscribed by 5,318 times during its March listing. Even Pop Mart, known as the 'first blind box stock,' was only oversubscribed by 356 times at its IPO five years ago.
(Source: Futu Securities)
Coincidentally, Lekeshi shares a list of 'well-known institutional investors' with the two star consumer stocks in Hong Kong, Mixue Ice City and Pop Mart.
Just a year ago, Lekeshi was still an unknown entity in the Hong Kong capital market; today, it is being aggressively pursued by both top-tier institutions and retail investors alike.
What exactly is the allure of this hygiene products manufacturer from Africa?
Below, we will analyze Le Shushi’s “African hygiene products manufacturing” story from dimensions such as market positioning, valuation, and cornerstone investors.
1. Strategic positioning in emerging African markets coupled with strong profit and cash flow performance creates a rare investment target.
Fundamentally, Le Shushi is a multinational hygiene products company focusing on emerging markets such as Africa, Latin America, and Central Asia. Its core business includes baby diapers/pull-up pants, sanitary napkins, wet wipes, and other maternal and feminine hygiene products. The majority of its revenue comes from the African market, where it holds a leading position. According to Frost & Sullivan, based on 2024 sales volume, it ranks first in both the African baby diaper and sanitary napkin markets.
To understand Le Shushi’s development, it is essential to recognize its growth narrative within the African hygiene products market.
Africa is known as the “youngest continent” in the world, and this demographic structure presents significant growth potential, laying a solid foundation for economic development and consumption upgrades. Data shows that between 2020 and 2024, the compound annual growth rate of newborns in Africa was 1.8%, the highest among all continents globally, with over 50% of Africa’s population being under the age of 20.
However, contrasting sharply with this demographic dividend is the limited level of local industrialization. Africa has a vast import demand for various necessities, and the penetration rate of maternal and feminine hygiene products remains low, indicating substantial room for growth.
For instance, in 2024, the market penetration rates of baby diapers and pull-up pants in Africa were approximately 20%, significantly lower than the 70% to 86% range seen in Europe, North America, and China.
The fourfold difference in market penetration rates between Africa and regions like Europe, North America, and China provides Le Shushi with an expansive blue ocean market. Based on estimates from the United Nations Population Division, Africa has approximately 110 million people aged 0 to 3. This implies that every one-percentage-point increase in infant hygiene product penetration translates into an additional one million potential consumers for Le Shushi.
Another noteworthy trend is that, with the economic development of emerging markets such as Africa and the rise in per capita consumption levels, consumers increasingly aspire to improve their quality of life. According to Frost & Sullivan statistics, per capita consumer spending in Africa grew at a compound annual growth rate (CAGR) of 5.4% from 2020 to 2024, and is expected to maintain a similar growth rate from 2025 to 2029. This shift is particularly evident in hygiene products, especially baby diapers and sanitary napkins, where consumers show a clear preference for high-quality products.
This implies that the growth potential of Africa’s hygiene products market stems not only from an increase in 'volume' but also in 'value.' Applying the 'time machine theory,' the story of China's consumer upgrade after 2000 could potentially be replayed in Africa. LeShuShi, which has been deeply entrenched in the region for over fifteen years, is well-positioned to continue capitalizing on the 'market dividend.'
Moreover, LeShuShi's first-mover advantage in Africa's hygiene products market has enabled the company to establish multiple competitive edges, including deep distribution channels, localized production, a multi-brand portfolio, and strong brand recognition, creating a robust moat that makes it difficult for newcomers to replicate.
For instance, from a channel perspective, Africa's unique market environment—characterized by offline consumption dominance, dispersed populations, and weak logistics infrastructure—requires a mature channel network that takes years to build and maintain. Consumer goods must pass through multi-tiered sales networks to reach end users. Deep distribution channels not only signify a mature channel network but also serve as the 'infrastructure' for hygiene products in Africa, determining whether a brand can reach a broad consumer base and thus become a key factor for success in tapping into the African market.
LeShuShi has made significant progress in building its deep distribution channels. According to Frost & Sullivan, LeShuShi's sales network covers all administrative regions in its core operating countries, reaching more than 80% of the local population in these nations.
Under this growth narrative, LeShuShi's financial data also appears impressive, achieving profitable revenue and cash-flow-positive profits, indicating high financial quality.
Specifically, from 2022 to 2024, LeShuShi achieved revenues of USD 320 million, USD 411 million, and USD 454 million, maintaining steady growth. During the same period, LeShuShi’s net profits were USD 18.4 million, USD 64.7 million, and USD 95.1 million, representing year-on-year growth rates of 251.7% in 2023 and 47.0% in 2024. Profit growth significantly outpaced revenue growth, sustaining a high-speed expansion.
In the first four months of this year, LeShuShi generated revenue of USD 161 million, up 15.5% year-on-year, and net profit of USD 31.1 million, up 12.5% year-on-year. For the first half of the year, the company recorded revenue of USD 255 million, up 19.1% year-on-year, with the growth rate accelerating compared to the first four months.
Meanwhile, LeShuShi's net operating cash flow surged from USD 13.57 million in 2022 to USD 109 million in 2024, growing in tandem with net profit and even showing a higher growth rate.
This means that LeShu Shi's book profits have been fully converted into real cash inflows, demonstrating not only a strong ability to generate cash but also maintaining financial health amidst rapid growth, thus forming a high-quality development trajectory.
As a company with deep roots in Africa’s emerging markets and excellent performance in both profitability and cash flow, LeShu Shi’s scarcity as a leader in hygiene products has become even more prominent.
2, 20 timesStatic Price-to-Earnings Ratio, using two sets of comparisons to assess the 'undervalued worth'
In terms of valuation levels, if calculated based on the midpoint of LeShu Shi’s offering price, the corresponding P/E ratio for 2024 is approximately 20X.
Some investors may wonder whether this valuation level is considered high or low?
We can attempt to answer this question through two sets of comparisons:
First, comparing Hong Kong-listed stocks / A-shares, where scarcity determines valuation levels.
As previously mentioned, LeShu Shi’s unique characteristics confirm its position as a rare investment target in the Hong Kong stock market. Looking across both the Hong Kong and A-share markets, it becomes evident that there are hardly any comparable targets. Among existing hygiene product companies, Hengan and Vinda focus on the domestic market, while Haoyue Care mainly engages in OEM/ODM manufacturing businesses (with revenue predominantly from the domestic market). LeShu Shi is the only company focusing on emerging markets.
The imagination sparked by scarcity often supports a company’s higher valuation levels, or even valuation premiums. Just as when Pop Mart went public on the Hong Kong Stock Exchange, the market was more willing to assign a significantly higher valuation to the 'first trendy toy stock' due to its scarcity compared to traditional toy stocks—Le Comfor is no exception. The company is expected to gain a scarcity premium through its positioning as the 'first African consumer goods manufacturing stock.'
Secondly, compared with global peers, Le Comfor's growth certainty is sufficient to justify its current valuation of 20 times.
From a broader perspective, a suitable comparison globally would be Unicharm (which operates in Southeast Asian emerging markets), valued at 21.4X. Considering that the African emerging markets where Le Comfor has deep operations are growing faster, it also has reason to command a higher growth valuation premium.
If Unicharm serves as the benchmark, Le Comfor’s valuation appears reasonable and may even be somewhat undervalued.
Turning to specific operational metrics, comparisons with industry peers further highlight Le Comfor’s robust growth. In terms of revenue and growth metrics for 2024, Le Comfor outperforms global peers such as Unicharm and HAOYUE Care.
At the same time, in terms of totalreturned 8.45%ROA, Le Comfor achieved an ROA of 37.40% in 2024.ROA, significantly higher than the comparable companies' average of 10.29%, including Kimberly-Clark's 15.02% and Procter & Gamble's 12.24%.These figures demonstrate that Leshushi is a high-quality asset characterized by high growth and high efficiency, with a valuation of 20 times being relatively reasonable.
3. Strong endorsement from institutional investors, with IFC, Sequoia, and Black Ants rushing in
The robust lineup of institutional investors is another major highlight of Leshushi.
Prior to its initial public offering, Leshushi had already secured investment from the International Finance Corporation (IFC) and is expected to hold approximately 2.5% of its shares post-listing.
IFC, part of the World Bank Group, was established by 184 member countries under its charter terms. As the largest development institution globally, it focuses on the private sector in emerging markets and operates in over 100 countries. It has especially established a leadership role in promoting private sector investments in Africa, providing record financing and extensive advisory support during the fiscal year 2024 to help consolidate African markets and create jobs across the continent.
Its participation not only provides financial support but also reflects recognition of Leshushi's standardized operations and future prospects, offering strong 'international credit endorsement,' which helps Leshushi continue building a positive image in the African market.
Furthermore, the cornerstone investor lineup for Leshushi's offering is considered 'luxurious,' including renowned investment institutions such as Sequoia China, Black Ant Capital, Boyu Capital, Morgan Stanley, and leading domestic public funds like Southern Asset Management, Fullgoal Fund, E Fund, and China AMC.
Among these are 'star catchers' with deep insights and investment track records in the consumer sector, such as Sequoia China domestically (investments include Pop Mart, Mixue Ice City, etc.) and Black Ant Capital (investments include Pop Mart, Laopu Gold, etc.). Although these top domestic investment institutions have long been active in sectors like consumer goods, their involvement in pre-IPO investments within Hong Kong and A-share consumer industries has been limited over the past five years, with even fewer cases of jointly-backed new stocks. For instance, Black Ant Capital has rarely acted as a cornerstone investor before; previous engagements included Pop Mart and Laopu Gold, though not as cornerstone investors. The last time Morgan Stanley served as a cornerstone investor for a Hong Kong stock was five years ago (February 2021) when Kuaishou went public.
This simultaneous entry by multiple top-tier institutions further underscores Leshushi's investment appeal and the high consensus behind its investment value and predictable growth.
4. Market Outlook: Building a Second Growth Curve and Evolving into the 'Procter & Gamble of Africa'
From a broader perspective, the growth potential of Leshushi extends far beyond the continued release of dividends from the African market.
Currently, Leshushi’s growth framework is gradually evolving towards 'multi-market expansion + capital-driven empowerment,' which will propel the company to achieve a new round of performance and value leap.
Horizontally, the successful replication in emerging markets will provide Leshushi with its second growth curve.
In 2020, Leshushi entered the Latin American market (starting with Peru). In 2024, it acquired land to build a production facility in Peru and launched sales activities in El Salvador to expand its Latin American business coverage. By 2025, it plans to start producing infant diapers in El Salvador, gradually replicating the 'local production + local sales' business model proven successful in Africa.
The greatest similarity between the Latin American and African markets is their 'youthfulness.' According to Hongzhang Capital statistics, the median age in Latin America will be approximately 30.4 years by 2025, two years younger than Shenzhen—the youngest city in China—with a median age of 32.5 years. This youthful consumer population ensures a strong demand for maternal and infant hygiene products.
Leshushi will replicate its proven success model from Africa to Latin America without requiring large-scale innovation. Given its high level of certainty, this initiative is expected to accelerate the contribution of significant performance gains.
Vertically, support from the capital markets will bring more development opportunities to Leshushi. For example, under capital backing, it can driveMergers and acquisitionsintegration and grow into the 'Procter & Gamble of Africa'.
By referencing the growth trajectories of global consumer goods giants like Procter & Gamble, LeShiZhi can rapidly expand its market share through the acquisition of regional small factories. Leveraging a multi-brand portfolio and strong brand recognition, it can extend into synergistic categories, evolving towards becoming the 'Procter & Gamble of Africa.'
In the long term, a company's stock price is ultimately determined by its value creation capability.
In this regard, we have ample reason to believe that LeShiZhi is poised to deliver impressive performance and has the potential to become the next major growth stock in the Hong Kong-listed consumer sector.