Hong Kong IPO Prospect and Investment Value Analysis of Grandpa's Farm

Based on the collected information, I will provide you with a comprehensive analysis of Grandpa’s Farm’s IPO prospects and its investment value in the Hong Kong stock market.

According to the disclosure documents of the Hong Kong Stock Exchange, Grandpa’s Farm International Holdings Limited has indeed formally submitted an IPO application to the Hong Kong Stock Exchange on

, with CMB International serving as the sole sponsor [1]. The company’s Chairman of the Board, Executive Director and Chief Executive Officer is , and the executive director team also includes Jiang Fuquan, He Jiannong, and Liu Haibo [2].

1. Strong Recovery of Hong Kong IPO Market in 2025:
   • A total of
     117 new stocks
     were listed throughout the year, an increase of 67.14% year-on-year
   • Total funds raised reached
     HK$285.693 billion
     , an increase of 224.11% year-on-year [3]
   • The Hang Seng Index rose by 28.89% in 2025, and the Hang Seng Tech Index rose by 24.85%

2. Significant Improvement in Market Liquidity:
   • The average daily turnover in the first 11 months of 2025 reached
     HK$255.8 billion
     , an increase of 95% year-on-year
   • The total net buying of southbound funds in 2025 reached
     HK$1.4 trillion
     , becoming the most important liquidity support for the Hong Kong stock market [3]

3. Institutions Are Optimistic About Hong Kong Stocks in 2026:
   • KPMG predicts that Hong Kong’s IPO fundraising in 2026 is expected to reach HK$350 billion, ranking among the top three globally [4]
   • PwC expects to welcome about 150 new stocks, with a total fundraising amount ranging from HK$320 billion to HK$350 billion [4]

4. Strong Recent Market Performance:
   • The Hang Seng Index recently rose from 25,460 points to 26,347 points, an increase of 3.48% [5]
   • On the first trading day of 2026, the Hang Seng Index surged by more than 700 points, an increase of 2.76%

1. Highly Concentrated Oligopolistic Market:
   • Yili
     : Citing Nielsen data, its market share in infant formula omnichannel retail sales reached
     18.1%
     , ranking first in the industry [6]
   • China Feihe
     : Claims that its infant formula “ranks first in omnichannel market share and sales volume” [6]
   • The two giants are engaged in a fierce head-to-head battle for the “top sales volume”

2. Market Participants Form Distinct Echelons
   [6]:
   • First Echelon
     (milk powder business accounts for over 80%): China Feihe, Beingmate, Ausnutria, Yashili International
   • Second Echelon
     (business accounts for 30-80%): Western Animal Husbandry, H&H International Holdings
   • Third Echelon
     (accounting for less than 30%): Comprehensive dairy enterprises such as Bright Dairy, Sanyuan Food, Yili Group, Mengniu Dairy

3. Industry Competition Is Fierce:
   • More than
     40 milk powder brands
     completed name changes in the first half of 2025
   • The core of competition has fully shifted to R&D-based formula upgrades and functional segmentation
   • Yili Jinlingguan deepens breast milk research; Feihe’s “Star Feifan” focuses on OPO and lactoferrin; Ausnutria Kabrita Joy White upgrades OPL structural fat

4. Industry Consolidation Accelerates:
   • Concentrating on high-quality upstream milk sources; leading enterprises build barriers of “independent and controllable milk sources” through mergers and acquisitions
   • Deepening downstream regional channels to form an integrated supply chain

1. Significant Performance Decline:
   • Revenue declined in 2024, and net profit was
     halved
     [7]
   • This is a strong warning signal for new entrants to the industry

2. Limited Effectiveness of Diversified Business:
   • Revenue from other dairy products was 1.514 billion yuan, a year-on-year increase of only 6.3%, contributing 7.3% to total revenue
   • Revenue from nutritional supplements was 173 million yuan, a year-on-year decline, contributing only 0.8% to total revenue [7]
   • The combined revenue share of the two is less than **10%

3. Core Dilemmas:
   • Highly dependent on infant formula products
   • The adult milk powder track it has laid out faces many strong competitors (Yili, Mengniu, Nestle, Anchor, etc.)
   • Entering the liquid milk field faces the “duopoly” pattern of Yili and Mengniu [7]

1. Difficulty in Gaining Market Share:
   • Under the industry duopoly pattern of Yili (18.1%) and Feihe, it is extremely difficult for new entrants to gain market share
   • Brand awareness and channel networks require huge investments and time accumulation

2. Obvious Scale Disadvantages:
   • Compared with first-echelon enterprises (such as China Feihe, Beingmate, etc.), it is at a disadvantage in terms of procurement costs, R&D investment, marketing expenses, etc.
   • It is difficult to afford market offensives like the “birth subsidy plan of over 1 billion yuan” launched by leading enterprises [6]

3. Serious Product Homogenization:
   • More than 40 milk powder brands in the industry have completed name changes, making product differentiation extremely difficult
   • Strong R&D capabilities and capital investment are required to achieve formula upgrades and functional segmentation

4. Questionable Profitability:
   • Referring to the performance of industry benchmark Feihe, even the industry leader faces the dilemma of declining revenue and halved net profit
   • Under fierce competition, there are major doubts about the profitability and sustainability of new entrants

1. Policy Support:
   • The child-rearing subsidy implemented since January 2025 has injected consumption vitality into the market
   • Leading enterprises have simultaneously launched birth subsidy plans to further stimulate market demand [6]

2. Consumption Upgrade Trend:
   • Precision nutrition, high-endization, and functionalization have become development directions
   • There is still room for growth in segments such as organic + A2 protein and special medical purpose formulas

3. Hong Kong IPO Window Period:
   • The current Hong Kong IPO market is active, and investors have a high degree of attention to new stocks
   • If the consumer goods sector can tell a good differentiation story, it may still gain investor recognition

1. Excessively Fierce Industry Competition:
   • The infant formula market has entered the “elimination round” stage, and industry consolidation is accelerating [6]
   • New entrants face direct competition with industry giants, with little chance of success

2. Lack of Information on Differentiation Advantages:
   • Key information such as Grandpa’s Farm’s core competitiveness, market share, and financial data has not been seen in public information so far
   • In a market with serious product homogenization, a lack of clear differentiation positioning makes it difficult to gain investor favor

3. Deterioration of Industry Benchmark Performance:
   • China Feihe’s significant performance decline as an industry leader has sounded an alarm for the entire industry
   • Even mature enterprises face huge pressure in the current market environment

4. Changes in Hong Kong Market Preferences:
   • 2025 Hong Kong IPOs were mainly driven by technology, new energy, and biomedicine enterprises
   • Traditional consumer goods IPOs need to have extremely strong fundamentals and growth potential to attract capital attention

1. Core Indicators After Prospectus Disclosure:
   • Revenue scale and growth rate
   • Market share and industry ranking
   • Profitability (gross profit margin, net profit margin)
   • R&D investment ratio

2. Differentiation Positioning:
   • Whether there are unique product formulas or technical advantages
   • Whether the channel strategy is innovative (such as e-commerce, mother and baby chains, etc.)
   • Whether the target customer group is precise

3. Use of Fundraising:
   • Whether it is used for capacity expansion, brand building, or channel expansion
   • Whether it helps to quickly increase market share

4. Valuation Level:
   • Valuation comparison with peer listed companies (China Feihe, Beingmate, etc.)
   • Whether there is sufficient safety margin

Grandpa’s Farm is seeking an IPO in the highly concentrated and fiercely competitive infant formula market, facing huge challenges. Although the overall environment of the Hong Kong IPO market is good, considering factors such as the industry duopoly pattern, serious product homogenization, and the deterioration of industry leaders’ performance, it is recommended that investors

and make investment decisions after the prospectus details the company’s fundamentals, financial data, and competitive strategies.

In the current market environment, unless Grandpa’s Farm can demonstrate extremely strong differentiated competitive advantages, clear market positioning, and a sustainable profit model, it will be difficult to gain the favor of Hong Kong stock investors.

[1] 新浪财经 - “爷爷的农场国际控股有限公司向港交所提交上市申请” (https://finance.sina.com.cn/jjxw/2026-01-05/doc-inhfhpmh6571137.shtml)

[2] 港交所文件 - “GRANDPA’S FARM INTERNATIONAL HOLDINGS LIMITED 爺爺的農場國際控股有限公司” (https://www1.hkexnews.hk/app/sehk/2026/108049/documents/sehk26010502932_c.pdf)

[3] 证券日报/新华网 - “2025年港股观察：首募规模大增 交投更为活跃” (https://www.news.cn/finance/20260104/e008cb8aeca543e786d753ad200a8217/c.html)

[4] 毕马威/罗兵咸永道 - 《中国内地与香港IPO市场2025年回顾与2026年展望》相关报道

[5] 金灵API数据 - 恒生指数市场数据

[6] 财经头条 - “年度观察| 乳品行业告别普惠式增长时代’淘汰赛’加速行业整合” (https://www.mycaijing.com/article/detail/561691?source_id=40&open_tag=0)

[6] 前瞻产业研究院 - “2025年中国母婴细分市场分析：婴幼儿奶粉市场竞争激烈，品牌集中化趋势明显” (https://ecoapp.qianzhan.com/detials/250618-60c66a6c.html)

[7] 凤凰网财经 - “'奶粉一哥’飞鹤营收下滑、净利腰斩质量问题屡遭投诉” (https://jx.ifeng.com/c/8mSKxA2gr6d)