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China Foods Limited (0506) Fair Value & Analysis

Consumer Defensive · HK · Market cap HK$8.6B

CF China Foods Limited 0506 · HK
PriceHK$3.32
Fair ValueHK$7.53
Upside+127.2%
Quality66/100
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Healthy Growth
Thin margins · 3.9% net margin
Low debt · generates free cash flow
4.83% dividend yield
Ranks above peers (12/15)
Narrow moat 40/100
Evidence: Medium Range HK$5.64 – HK$9.41 Share as image

Fair value as of: Aug 13, 2026

From 26 valuation models · updated 2 days ago

Fair value updated Aug 13, 2026, revised from HK$7.51 to HK$7.53 (+0.3%) since Aug 2, 2026. Share price +1.1% over the past month.

A solid business, screening 127% undervalued on our models.

What matters now

  • The price is below even our cautious bear case (HK$5.64). The market is more pessimistic than our downside scenario.
  • Solid quality (66/100) at a price below fair value, the discount is the argument here, not the business quality.
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Price vs Fair Value (5 years)

HK$4.73 HK$1.62 Fair Value HK$7.53 Mar 2021 Aug 2026

White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Aug 13, 2026.

How to read this chart

60‑month range HK$1.62 – HK$4.73 · fair‑value band HK$5.64 – HK$9.41 · the HK$3.32 price screens below the HK$7.53 fair value. Dashed = 300-day average. As of Aug 13, 2026.

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Analysis

China Foods Limited (0506) currently trades at HK$3.32, while our model-based Fair Value estimate is HK$7.53, implying the stock looks roughly 127.2% undervalued today. The Quality Score stands at 66/100 (solid quality), in the Consumer Defensive sector. Bull case: trading below our estimate, it may offer upside if the fundamentals hold. Bear case: a low price can be a value trap when quality is weak or the data is thin (evidence: medium), always confirm before acting.

Over the trailing twelve months, China Foods Limited generated revenue of HK$22.1B at a net margin of 3.9%. Revenue declined 3.6% year over year. It earns a return on equity of 13.8%. The balance sheet holds a net cash position of HK$4.5B. Fundamentals as of Aug 13, 2026

Our scenario range runs from HK$5.64 (bear case) to HK$9.41 (bull case); at HK$3.32, the current price sits below that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 33% below its 52-week high and 12% above its 52-week low, currently below its 200-day average. For context, the median of 10 Consumer Defensive peers we cover trades at -22% fair-value upside, at 127%, 0506 screens cheaper than that median.

Fair Value models

Each model estimates fair value its own way; the Fair Value above is the evidence-weighted blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small.

Model Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. Evidence
Highest evidence
Growth DCF HK$9.92 HK$13.38 HK$18.02 80
Residual Income HK$2.28 HK$2.67 HK$4.79 76
Rev-Margin DCF HK$8.47 HK$12.03 HK$16.03 74
All 26 models by family
DCF Models
FCF DCF HK$9.76 HK$13.61 HK$19.07 38
Owner Earnings HK$4.23 HK$5.47 HK$7.22 31
5Y Revenue Exit HK$8.47 HK$11.96 HK$16.30 39
5Y EBITDA Exit HK$10.20 HK$15.13 HK$20.74 41
5Y P/E Exit HK$7.33 HK$9.88 HK$12.44 38
10Y Revenue Exit HK$8.70 HK$11.91 HK$16.00 36
10Y EBITDA Exit HK$9.95 HK$14.04 HK$19.25 37
10Y P/E Exit HK$8.18 HK$10.52 HK$13.19 35
Earnings-Based
Graham-Dodd HK$2.10 HK$5.79 HK$7.61 54
Lynch FV HK$1.16 HK$1.65 HK$2.15 50
PEG = 1.0 HK$1.16 HK$1.65 HK$2.15 46
EPV HK$6.27 HK$7.00 HK$7.63 59
Dividend Discount
Gordon GGM HK$1.34 HK$2.68 HK$4.05 70
DDM Multi-Stage HK$1.34 HK$2.08 HK$2.82 61
Multiples
P/E Multiple HK$4.85 HK$6.47 HK$8.09 63
P/S Multiple HK$3.93 HK$5.24 HK$6.55 58
P/B Multiple HK$3.93 HK$5.24 HK$6.55 55
EV/EBIT HK$10.65 HK$13.65 HK$16.66 53
EV/EBITDA HK$11.64 HK$14.98 HK$18.31 54
EV/Revenue HK$8.07 HK$10.82 HK$13.58 43
Asset-Based
NCAV (Graham) HK$1.23 HK$1.65 HK$2.47 50
Growth DCF
Growth DCF HK$9.92 HK$13.38 HK$18.02 80
Rev-Margin DCF HK$8.47 HK$12.03 HK$16.03 74
Economic Profit
Residual Income HK$2.28 HK$2.67 HK$4.79 76
ROIC Compounder HK$6.42 HK$7.35 HK$8.28 72
Growth Earnings
Growth-Adj P/E HK$3.86 HK$5.51 HK$7.16 68

Widest divergence: Growth DCF (HK$12.03) versus Earnings-Based (HK$1.65). Highest evidence: Growth DCF (80).

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Key figures & financial health

Revenue (TTM) HK$22.1B
Revenue growth (YoY) -3.6%
Net margin 3.9%
Return on equity 13.8%
Free cash flow HK$2.2B FY2025
P/E ratio 8.6 as of Jul 2, 2026
More key figures
Operating margin 6.3%
EPS (TTM) HK$0.2100
Dividend yield 4.8%
EPS growth (YoY) -3.8%
Net cash HK$4.5B FY2025

Figures from reported company fundamentals · as of Aug 13, 2026. TTM = trailing twelve months.

Quality Score breakdown

Overall quality 66/100

Of which business quality 67 · Market factors (momentum, volatility) 46

Profitability 58
Margins and returns on capital today
Quality Growth 42
Are margins and returns improving?
Cashflow 65
Earnings quality: real cash, not paper profit
Fin. Strength 83
Balance sheet, leverage, solvency risk
Investment 71
Disciplined investing over empire-building
Low Volatility 78
Calm price path (market factor)
Momentum 34
Price trend over the last 3–12 months (market factor)
52W Momentum 29
Distance to the 52-week high (market factor)
Net Issuance 82
Buybacks instead of dilution

Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.

About the company

China Foods Limited, an investment holding company, manufactures, distributes, markets, and sells Coca-Cola series products in the People's Republic of China. It offers sparkling drinks, juices, water, milk drinks, energy drinks, tea, coffee, functional nutrition drinks, and sports and plant-based protein drinks under various brand names.

Full company description

China Foods Limited, an investment holding company, manufactures, distributes, markets, and sells Coca-Cola series products in the People's Republic of China. It offers sparkling drinks, juices, water, milk drinks, energy drinks, tea, coffee, functional nutrition drinks, and sports and plant-based protein drinks under various brand names. The company is also involved in the production, sale, and distribution of beverage bottles; wholesale and retail of pre-packaged foods, and raw and auxiliary materials; provision of supply chain information consultation, management, and other services; and wholesale of packaged foods. In addition, it provides enterprise management and consulting, business information consulting, and marketing planning services, as well as computer information system development, consulting, promotion, and other services. Further, the company engages in the vending machine and food business, and internet sale of food, as well as sale of health food. The company was formerly known as COFCO International Limited. China Foods Limited was founded in 1990 and is headquartered in Causeway Bay, Hong Kong. China Foods Limited operates as a subsidiary of China Foods (Holdings) Limited.

Company description, as reported by the company or data provider.

Revenue & earnings trend

FY2021 – FY2025 · reported fiscal years

China Foods Limited reported revenue of HK$22.1B in FY2025 versus HK$19.8B in FY2021, a compound +2.8%/yr. Reported net income was HK$862M in FY2025, compounding +10.8%/yr from FY2021.

Growth Quality 74/100
Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Latest Revenue (FY 2025)
HK$22.1B
Latest YoY
+2.7%
Avg. growth/yr (3Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.
+1.7%
Avg. growth/yr (5Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.
+5.1%
Avg. growth/yr (25Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.
+12.0%
Revenue +2.8%/yr
FY21 HK$19.8B
FY22 HK$21.0B
FY23 HK$21.4B
FY24 HK$21.5B
FY25 HK$22.1B
Net income +10.8%/yr
FY21 HK$572M
FY22 HK$660M
FY23 HK$833M
FY24 HK$861M
FY25 HK$862M
Character of growth · EPS growth decomposed (2015-2025) +15.7 % p.a.
Revenue per share +3.1 pp

of which total revenue +3.1 pp · buybacks/dilution +0.0 pp

EBIT margin +18.8 pp
Tax rate +1.5 pp
Residual (interest, one-offs) −7.7 pp

Absolute contributions in percentage points per year; they sum to the EPS growth rate. Start and end points are 3-year averages (details on hover).

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China Foods Limited · Fair Value
HK$7.53 +127%Fair Value
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Cite: Fair Value Calculator (2026). "China Foods Limited Fair Value". https://www.fairvalue-calculator.com/stock/0506

Peer Group

Beverages - Non-Alcoholic · 90 stocks

How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.

Quality Score 66 · Above median
Fair Value upside +127% · Top 25%
Return on equity (TTM) 14% · Above median
Return on assets 7% · Above median
Net margin (TTM) 4% · Below median
Operating margin (TTM) 6% · Below median
Revenue growth -4% · Bottom 25%
Dividend yield (TTM) 4.8% · Top 25%

Valuation Multiples vs Beverages - Non-Alcoholic median · lower = cheaper

P/E (TTM) 8.6× · Cheaper than 75% of peers
P/B 1.25× · Cheaper than median
P/S (TTM) 0.39× · Cheaper than 75% of peers
P/FCF 0.5× · Cheaper than median
EV/EBITDA 1.5× · Cheaper than 75% of peers
PEG 1.05× · Cheaper than median

Snowflake

Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.

VALUE 100 · sector 21
FUTURE 0 · sector 46
PAST 55 · sector 53
HEALTH 100 · sector 96
DIVIDEND 97 · sector 56

Values & ESG

Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.

Alcohol

ESG scores are not available for this stock yet. Values and ESG data are contextual and can differ between providers.

Similar stocks

10 more Beverages - Non-Alcoholic stocks, each showing price versus our Fair Value estimate (as of Aug 13, 2026).

Stock Price Fair Value vs Fair Value
The Coca-Cola Company KO $86.71 $36.57 -58%
PepsiCo, Inc PEP $138.70 $106.91 -23%
Monster Beverage Corporation MNST $45.98 $35.82 -22%
Nongfu Spring Co 9633 HK$42.54 HK$30.90 -27%
Coca-Cola Europacific Partners PLC CCEP €92.10 €70.86 -23%
Keurig Dr Pepper Inc KDP $29.56 $30.99 +5%
Coca-Cola FEMSA, S.A. KOFUBL 180.76 MXN 159.53 MXN -12%
Coca-Cola HBC AG EEE €54.20 €46.77 -14%
Arca Continental, S.A. AC 198.23 MXN 242.13 MXN +22%
Varun Beverages Limited VBL ₹438.45 ₹187.49 -57%

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Frequently asked questions

Is China Foods Limited (0506) overvalued or undervalued?
As of Aug 13, 2026, our model estimates a fair value of HK$7.53 versus a price of HK$3.32, about +127% (undervalued).
What is the fair value of 0506?
Our model-based fair value for China Foods Limited is HK$7.53 (as of Aug 13, 2026), built from audited fundamentals. The current price is HK$3.32.
What is the quality score of 0506?
China Foods Limited has a Quality Score of 66/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the revenue of China Foods Limited (0506)?
China Foods Limited reported trailing-twelve-month revenue of about HK$22.1B (latest available figure, as of Aug 13, 2026).
What is the net profit margin of 0506?
The net profit margin of China Foods Limited is about 3.9%, meaning it keeps roughly 3.9% of revenue as net income. Based on the latest reported figures.
Does China Foods Limited pay a dividend?
China Foods Limited currently shows a dividend yield of about 4.83% relative to its recent price (as of Aug 13, 2026).

How we calculate Fair Value

Each company is valued through a stack of independent intrinsic-value models (DCF variants, residual-income, multiples and more), blended into one family-balanced consensus and weighted by how much trustworthy data backs it. A separate quality layer scores the fundamentals. Every input is real reported data, nothing guessed.

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