A leading African hygiene products company with deep roots in emerging markets and extensive experience in localization, poised to drive long‑term, stable growth. Le Shushi is a frontrunner in the African hygiene products industry, primarily engaged in the R&D, production, and sales of hygiene products such as baby diapers and sanitary napkins—both categories hold the largest market share in Africa. The African market benefits from a demographic dividend, coupled with low penetration rates for diapers and sanitary napkins, leaving ample room for industry growth. The company boasts a diverse product portfolio and brand matrix, while leveraging localized production capacity across eight African countries to build cost barriers on the channel side, complemented by a deeply entrenched distribution network that reaches a broad consumer base. We believe the company’s strong localization capabilities have been underestimated by the market. We are optimistic that the company will continue to expand its channels and product categories in the African market, which is rich in demographic dividends, and will replicate its localized operational expertise in other emerging, high‑potential regions around the globe. With a global market characterized by a high ceiling, a long runway, and substantial growth potential, the company is well positioned to achieve long‑term, stable growth. We project the company’s net profit attributable to shareholders at USD 1.12/1.32/1.54 billion for 2025–2027, corresponding to EPS of USD 0.18/0.21/0.25, with current stock prices trading at P/E ratios of 22.3/18.8/16.1 times. Initiating coverage with a “Buy” rating.
Products: A multi-brand, tiered matrix for precise market positioning, with comprehensive coverage across all scenarios through a wide range of SKUs and localized products that build strong barriers in the infant care segment. In the baby diaper category, Le Shunshi has deployed four major brands—Softcare, Maya, and others—alongside multiple differentiated sub‑product lines, reaching 263 SKUs by April 2025. In the feminine hygiene segment, Le Shunshi has developed a three‑brand portfolio for sanitary napkins—Softcare, Veesper, and Clincleer—comprising 44 SKUs tailored to meet diverse menstrual needs.
By developing differentiated products tailored to local African needs and meeting the actual demands of African consumers, the company has firmly maintained its position as the market leader in infant diapers and sanitary napkins in Africa, with growth rates that outpace those of its competitors.
Production and Channel Capabilities: Localized production capacity reduces costs and boosts efficiency, while a deeply cultivated, in‑depth distribution network keeps the company at the forefront of the industry on the production side: Localized production capacity delivers significant cost and efficiency advantages. The company has established 8 factories and 51 production lines across 8 African countries, with Ghana and Kenya serving as core hubs—making it the African hygiene products enterprise with the most extensive local factory network.
In 2024, the company ranked first in Africa in terms of infant diaper and sanitary napkin production. Capacity utilization for its core product categories has rebounded, and the company plans to expand production to further strengthen its supply capabilities. On the channel side: With a broad geographic footprint and deep market penetration, the company truly understands the African market and its distribution channels. Having cultivated emerging markets for over 15 years, it has built a sales network covering more than 30 countries, with 18 branch offices. Relying on a network of over 2,800 wholesalers and distributors, the company reaches more than 80% of the local population. Compared to international brands, which often struggle to penetrate lower-tier markets, Le Shu Shi enjoys industry-leading insights into Africa’s offline channels, boasting strong channel loyalty and a first-mover advantage that has created significant competitive barriers.
Risk Warning: Risks include intensifying market competition, foreign exchange fluctuations, and capacity expansion falling short of expectations.
