To The Moon

Softcare Limited (02698.HK) $SOFTCARE(02698)$ — a Dubai-headquartered multinational hygiene products company focused on fast-growing emerging markets — is attracting market attention with its upcoming Hong Kong IPO. Backed by strong profitability, localized production capabilities, and substantial cornerstone support, the offering provides investors exposure to the structural growth story in Africa and other emerging regions.

1. Offering Overview

Subscription period: October 31 – November 5 (until 9:30 A.M.)
Listing date: November 10
Offer price range: HK$24.2 – HK$26.2
Expected market cap: HK$14.66 billion – HK$15.97 billion
Total shares offered: 90.884 million
Minimum investment: HK$5,292.85

2. Company Profile

Founded in 2009 and headquartered in Dubai, Softcare Limited is a multinational hygiene products company focused on emerging markets such as Africa, Latin America, and Central Asia. The company develops, manufactures, and sells baby diapers, pull-up pants, sanitary napkins, and wet wipes under its brands Softcare, Veesper, Maya, Cuettie, and Clincleer. Its products are distributed across over 30 countries in West, East, and Central Africa.

3. Financial Performance

Softcare generates most of its revenue from African markets.
In the first four months of 2025, East Africa contributed 46.5%, West Africa 39.5%, Central Africa 10.6%, while Latin America and Central Asia accounted for 3.3% and 0.1%, respectively.

• FY2024 revenue: US$450 million (+10.5% YoY)

• Net profit: US$95.1 million (+47% YoY)

• First four months of 2025: Revenue US$160 million (+16% YoY), Net profit US$31.1 million (+12% YoY)

Growth momentum has slowed:
Revenue growth decelerated from 28.44% in 2023 to 10.46% in 2024, and net profit growth dropped from 251.7% to 47.05%. Although the first four months of 2025 showed some rebound, the overall growth trajectory appears to be moderating.

4. IPO Analysis

1). Industry Outlook

Softcare operates in the infant and feminine hygiene product segment, a market benefitting from strong demographic tailwinds in emerging regions, particularly Africa—including a young population structure, rising urbanization, and a growing base of women of childbearing age. As disposable incomes rise and local supply chains mature, penetration rates and brand recognition are expected to improve, supporting sustainable growth.

2). Market Position & Competition

Softcare is a leading player in the African hygiene market and is often referred to as the “Diaper King of Africa.” According to Frost & Sullivan, the company ranked No.1 in Africa in both baby diaper (20.3% market share) and sanitary napkin (15.6%) sales in 2024.

However, on a global scale, Softcare faces intense competition from multinational consumer goods companies and local manufacturers with established brand equity and scale. While the company leads regionally, it still trails international giants in global brand influence, product differentiation, and premium positioning.

Geographic concentration in African emerging markets brings economic, logistical, raw material, currency, and policy risks, any of which could impede growth if conditions turn adverse.

3). Localized Production for Cost Advantage

Softcare operates 8 manufacturing facilities in Africa with 51 production lines, forming a sales and distribution network across 30+ countries. This localized production strategy reduces transportation costs, improves responsiveness to local demand, and builds strong cost and logistical barriers to entry.

4). Strong Cornerstone Support

Softcare has secured commitments from 19 cornerstone investors, totaling US$139 million (approx. HK$1.08 billion). Key cornerstone names include BA Capital, Arc Avenue, Arcane Nexus, CDH Emerging Markets, HCEP, NewTrails, Southern Asset Management, E Fund, Fullgoal Fund, ChinaAMC (HK), and Jane Street.
At the top-end offer price of HK$26.2, cornerstone commitments represent 45.34% of the initial offering—a notable indicator of institutional confidence. Overall cornerstone participation amounts to 47.14% of the offering, including leading private equity and public fund houses.

5. Investment Highlights & Risks

Investment Highlights:

• Market leader in Africa’s hygiene products sector with leading market share

• Sustained profitability with resilient earnings growth

• Localized production network provides meaningful cost and operational advantages

• Positioned to benefit from Africa’s population growth and consumption upgrades

• Supported by 47.14% cornerstone participation, reflecting strong institutional endorsement

Potential Risks:

• Slowing growth momentum may challenge future expansion

• Political and macroeconomic volatility in Africa

• Currency fluctuations could erode margins

• Increased competition from global and regional brands

• Rising raw material costs could compress profitability

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