Coconut water maker If seeks investor warmth in Hong Kong

China’s top coconut water seller has switched its sights for an IPO from Singapore to Hong Kong, seeking to list as an important deadline looms in 2026

Key Takeaways:

• Coconut water maker If has applied to list in Hong Kong, reporting its profit nearly doubled last year
• The company must go public by the end of 2026 under a value adjustment mechanism agreement, or risk having to pay a penalty to an investor

By Lau Chi Hang

China’s vast beverage market is filled with a broad range of flavors for both consumers and investors. For simple drinking water there’s Nongfu (9633.HK) and C’estbon, a unit of China Resources Beverage (2460.HK). Herbal tea lovers can find refreshment in Jia Duo Bao and Wong Lo Kat. And people looking for a lift can get charged up on Red Bull and Eastroc Beverage’s Dongpeng.

Now, a hipster from Thailand is hoping to join a growing number of those brands tapping the capital market, with the recent filing for a Hong Kong IPO by If, whose trendy coconut water has become all the rage these days.

Established by Thai national Pongsakorn Pongsak in 2013, If brought its signature ready-to-drink (RTD) natural coconut water to China 12 years ago. Now, parent company IFBH Pte. Ltd. is hoping to raise some funds to bolster the brand, while giving investors a taste of its success in the process.

The company was on a roll last year, reporting an 80% jump in annual revenue to $158 million, as its profit surged by an even larger 98% to $33.32 million, according to its listing document. The profit growth got an extra lift from a 1.7 percentage point rise in If’s gross margin to 37.2% last year. Coconut water was its mainstay, contributing 95.6% of revenue.

IFBH operates an asset-light model that contracts production to outside factories that agree to procure coconut water from IFBH-recognized sources. The company has a network of distributors all over China and uses their channels to sell its products. It also uses services from third-party logistics suppliers for its warehousing needs.

Transparency in plastic bottles

If owes its success to several factors, but a key one, of all things, is its choice of clear plastic bottles for its packaging. You might not give such a choice much thought, but it’s quite ingenious when you consider the characteristics of coconut water.

Coconut water appeals to consumers because it’s sweet and healthy and very thirst quenching. It looks just like water and putting it in a plastic bottle lets consumers see immediately just how pure and clear it is, giving the impression of being natural, additive-free and healthy.

That mirrors Nongfu Spring’s strategy, and the strategy of many natural drink makers that want consumers to see directly what they’re getting. Nongfu often touts that its one and only job is moving natural water to highlight the importance it places on selling the real thing. If’s choice of similarly transparent packaging serves a similar function, showing consumers that its primary function is providing coconut water exactly as nature produced it.

And consumers are lapping it up. If became Mainland China’s top-selling coconut water by 2020 and has held on to the position ever since with a current market share of 34%. It’s doing even better in Hong Kong where it has ruled the market for the past nine years with a hefty 60% of the market.

Listing deadline

If originally planned to list in Singapore, but then changed its mind and settled on Hong Kong instead. According to the company, it made the pivot to better raise its profile, brand recognition and corporate image closer to its key China market, helping it to attract clients, business partners and strategic investors. Its close China ties also contributed to the shift in listing location.

In March last year, the company agreed to sell 125,000 new shares to Aquaviva, worth $17.50 million and accounting for 11.1% of its enlarged share capital. As part of the deal, Aquaviva also obtained a put option from Pongsakorn Pongsak, IFBH’s largest shareholder, giving it the right to claim an annual return of 12% on its investment if IFBH was not listed by the end of 2026.

Aquaviva was later liquidated, and its IFBH stake was distributed among its three shareholders, Temasek-owned Fullerton, Oasis Partners and 10BIF Ltd.

Fast-growing category

With the listing deadline still more than a year and a half away, IFBH still has plenty of time to complete that part of the deal. What’s more, it has plenty of selling points to offer potential investors.

For starters, coconut water is one of the fastest-growing beverage categories in China. According to third-party data in the listing document, coconut water sales in Greater China are forecast to grow from $1.09 billion this year to $2.65 billion in 2029, representing 19.4% annual growth over that time. On a global basis, sales are projected to grow from $5 billion in 2024 to $8.5 billion in 2029, representing 11.1% annual growth.

The market is still in a rapid-growth stage, with new companies regularly entering. But If has the advantage of time, earning it significant recognition.

One way to measure a brand’s success is to see how many imitators are making knockoffs and lookalikes. There’s no shortage of those in China, with similar names like TF, LF and 1F all appearing on e-commerce platforms, separated from the real If by a single letter or character. All are trying to trick consumers into thinking they are similar quality or even sister products of the real If, speaking to the brand’s dominant market position.

In the global coconut water market, industry leader Vita Coco (COCO.US) currently trades at a price-to-earnings (P/E) ratio of 33 times. Its sales and profit last year reached $516 million and $56 million, respectively, with its revenue expected to rise to $570 million this year. Given that If is still much smaller than Vita Coco in terms of size and that Hong Kong-listed beverage stocks Nongfu Spring and China Resources Beverage trade at lower multiples of at 30 times and 19 times, respectively, investors might look for If to attain something in that ballpark, perhaps at around 20 times.

To subscribe to Bamboo Works weekly free newsletter, click here