Core Viewpoint - Zhejiang Hengmei Health Technology Co., Ltd. is facing multiple challenges including slowing growth, profit pressure, and aggressive expansion plans as it prepares for an IPO on the Beijing Stock Exchange [1] Company Overview - Hengmei Health is a high-tech enterprise specializing in the research, production, and sales of nutritional functional foods, aiming to provide comprehensive R&D and production services for brand clients [2] - The company holds the largest market share in China's nutritional functional food contract manufacturing industry, with a market share of 4.2% in 2024 [2] Revenue Growth - The company's revenue growth has significantly slowed, with 2024 revenue growth for its weight management products dropping to 2.58% from 72.58% in 2023 [1][4] - Overall revenue for Hengmei Health increased from approximately 587 million yuan in 2022 to 1.072 billion yuan in 2024, but the growth rate has declined [2][4] Product Performance - The weight management segment, the largest revenue source, saw sales of 517 million yuan in 2024, with a drastic decline in growth rate [4] - The sports nutrition segment's revenue grew by 19.66% to 400 million yuan in 2024, down from 48.55% in 2023 [4] - The beauty nutrition segment's growth fell to 6.61% in 2024 from 160.15% in 2023 [4] Profitability Challenges - Hengmei Health's net profit for the reporting period was 40 million yuan, 97 million yuan, and 103 million yuan, indicating a trend of profit stagnation alongside revenue growth [5] - The company faces pressure on profit margins due to fluctuations in raw material costs, which account for 84.19% to 85.02% of its main business costs [5] Cost and Margin Analysis - The gross margin for the weight management series dropped to 27.05% in 2024, a decrease of 1.56 percentage points [7] - The gross margin for the beauty nutrition series fell from 34.13% to 26.76% during the reporting period [7] - The sports nutrition series experienced the most volatility in gross margin, with figures of 17.04%, 9.22%, and 15.54% over the reporting period [8] Expansion Plans - Hengmei Health plans to raise 501 million yuan for expansion projects, including a new production line for nutritional foods with an expected annual capacity of 5,780 tons [11] - Despite the expansion, the current utilization rates for existing production capacities are low, particularly for baked goods, which have a utilization rate as low as 11.97% [12] - The company anticipates that the new project could generate annual sales revenue of 363.74 million yuan, but the feasibility of achieving this target remains uncertain [12]