Clearwater Seafoods experienced a 26% year-on-year growth in its Chinese market during the first quarter of the year, the best growth in five quarters, according to a report published by Doug Cooper, an analyst with Canadian investment dealer Beacon Securities.

The growth, according to Cooper, was “spearheaded by clams albeit management indicated that sea scallop sales in China are also expanding rapidly”.

In an email to Undercurrent News, Cooper said this was the result of both China’s growing middle class as well as the company’s efforts to establish more distribution channels for its clam and scallop offerings, “which in particular drove year-on-year sales growth in Q1“.

In an earlier analysis of Clearwater at the end of March, Cooper said it was set to be one of the “best in class Canadian companies”.

In the fourth quarter of last year, Asian sales represented 33.5% of the company’s total sales, with a particular expansion of demand in China.

“We are particularly interested in China, however, which saw its sales grow 53% year-on-year [in Q4] to reach $32.4 million in the quarter. China now represents Clearwater’s single largest market, and we believe that it will continue to dominate Clearwater’s growth for the foreseeable future as the spending power of the Chinese emerging middle class drives demand,” Cooper wrote.

In his most recent analysis, Cooper said he expects this growth in China to continue in the long term.

Overall, Beacon said Clearwater performed better than expected in the first quarter, with a 4.8% growth in adjusted earnings before interest, taxes, depreciation and amortization (ebitda), Clearwater said in its quarterly filing. Ebitda rose to CAD 128.4m, from CAD 116.2m.

Cooper predicted that growth would remain aggressive due in part to “the positive macro environment…with the growing Chinese middle class”.

This aligns with an overall expectation of higher sales to China. Earlier this week, experts predicted China’s fresh food market will grow from from CNY 91.3 billion in 2016 to CNY 350bn by 2019.

The brokerage also said growth is likely because of “the return to a positive pricing and volume environment for clams” and the company’s recently-closed credit facility, which “both expands the amount of capital it has access to and materially pushes out the maturity”.

Beacon maintained its buy rating of the company and a CAD 16.00 12-month target price. Since the report came out, the company’s share price has already begun to rise. As of May 15, the price is CAD 11.34, up from the opening price of CAD 10.37 on May 11, the day the company’s first quarter results came out.