Core Viewpoint - Marubi Biotech has submitted its prospectus to the Hong Kong Stock Exchange to initiate the "A+H" listing process, aiming to raise funds for enhancing online and offline channels, brand marketing, R&D investment, and general operations. However, the company has recently faced regulatory scrutiny from the Guangdong Securities Regulatory Commission due to financial accounting and fundraising issues, raising concerns about its financial health and governance [1][2][10]. Financial Performance - The company's revenue has shown volatility, with figures for 2020-2025 (up to Q3) being 1.745 billion, 1.787 billion, 1.732 billion, 2.226 billion, 2.970 billion, and 2.450 billion respectively, reflecting year-on-year changes of -3.10%, 2.41%, -3.10%, 28.52%, 33.44%, and 25.51% [4][21]. - The net profit attributable to the parent company has also fluctuated, with figures of 464 million, 248 million, 174 million, 259 million, 342 million, and 244 million for the same period, showing year-on-year changes of -10.50%, -55.70%, -24.03%, 38.16%, 73.86%, and -5.42% [4][21]. Sales and Marketing Expenses - Marubi's sales expenses have significantly increased, with amounts of 1.199 billion, 1.635 billion, and 1.415 billion for 2023, 2024, and the first three quarters of 2025, respectively, showing year-on-year growth of 41.65%, 36.38%, and 32.09% [6][23]. - The sales expense ratio reached 57.73%, while R&D expenses were only 63 million, resulting in an R&D expense ratio of just 2.6%, indicating that sales expenses are 22 times higher than R&D expenses [8][25]. Dividend Policy - Since its A-share listing in 2019, Marubi has distributed a total cash dividend of 1.083 billion, with dividend payout ratios of 80.38% and 88.03% for 2023 and 2024, respectively. The majority of these dividends have benefited the controlling shareholders, who hold over 80% of the company [2][19][29]. Regulatory and Governance Issues - The company has faced administrative regulatory measures due to issues such as inaccurate revenue accounting and improper management of raised funds, which have raised concerns about its internal controls and compliance governance [10][27]. - The slow progress of its A-share IPO fundraising projects, including multiple delays in the "cosmetics intelligent manufacturing plant" project, has further highlighted governance concerns [10][32].

Core Viewpoint - The Chinese beauty brand Marubi Biotechnology (丸美生物) is preparing for a Hong Kong IPO after experiencing a modest stock performance in A-shares, with a year-to-date increase of only 5.3% compared to significant gains by its Hong Kong counterparts [2][3]. Group 1: Company Overview - Marubi Biotechnology was founded in April 2002 and went public on the Shanghai Stock Exchange in July 2019 [3]. - The company focuses on synthetic biology technology and has developed skincare products with anti-wrinkle, firming, and repairing effects, particularly through its core technology of recombinant collagen [3]. - Marubi operates two main brands: Marubi, which specializes in eye and facial care solutions, and Lianhuo, a cost-effective makeup brand focusing on base makeup products [3]. Group 2: Financial Performance - Marubi's revenue from 2022 to 2024 was reported as 1.732 billion RMB, 2.226 billion RMB, and 2.970 billion RMB, with a compound annual growth rate (CAGR) of 31.0% [6]. - The net profit for the same period was 167 million RMB, 278 million RMB, and 342 million RMB, achieving a CAGR of 43.0% [6]. - However, net profit growth has slowed significantly, with a year-on-year increase of only 2.9% in the first nine months of the current year [6]. Group 3: Sales Channels - Marubi's sales channels include both online and offline, with online direct sales through platforms like Douyin, Tmall, and JD.com, and offline sales through distributors to specialty stores, department store counters, and beauty salons [5]. - The proportion of revenue from online direct sales has increased from 46.4% in 2022 to 74.8% in the first nine months of 2025, indicating a strong shift towards online sales [7]. Group 4: Dividend Policy and Controversy - Marubi has faced controversy over its substantial dividend payouts, which totaled 76.2 million RMB, 100 million RMB, 309 million RMB, and 301 million RMB from 2022 to 2025 [12]. - The company's significant dividends have raised questions among investors, especially in light of declining net profit growth and the potential impact on cash reserves [11][12]. - The major shareholders, Sun Huaqing and Wang Xiaopu, hold approximately 80.8% of the company, leading to concerns about the alignment of interests between the company and its investors [12]. Group 5: Future Plans - Marubi plans to use the funds raised from its IPO for enhancing its online and offline consumer engagement capabilities, marketing activities, and expanding its R&D team [13]. - The company aims to improve its supply chain capabilities and general working capital through the proceeds from the IPO [13].