Bank of America Securities has issued a research report initiating coverage on Haitian Flavouring and Food Company Ltd. (ASX: Not Listed; HKEX: 03288) H-shares with a "Buy" rating and a target price of HK$37.

The report highlights that Haitian is the market leader in China's soy sauce and oyster sauce segments, possessing unique value as it has achieved steady growth even amid a weak industry backdrop.

The firm has recorded sales growth for nine consecutive quarters starting from the first quarter of 2024, with its core products continuing to gain market share.

Consequently, the bank has raised its 2027 profit forecast by 2%, anticipating that the results of its business reforms will become evident.

While cost pressures are noted as a short-term concern, the report suggests these are likely already reflected in the share price, with the H-shares currently trading at an estimated forward price-to-earnings ratio of 19 times for the current year.