Core Insights - COREE Company Limited has submitted its prospectus to the Hong Kong Stock Exchange, leveraging its position as China's largest pediatric pharmaceutical marketing service provider with exclusive distribution rights for key products like "Mami Ai" and "Yitanjing" [1][10] - The company has established a vast distribution network covering 31 provinces, reaching over 110,000 clinics and 310,000 pharmacies, aiming for a 15.9% market share in the pediatric pharmaceutical marketing service sector by 2024 [1][10] - Despite its strong market position, COREE faces challenges due to its heavy reliance on a few products from Hanmi Pharmaceutical, a declining newborn population, and increasing industry competition [1][11] Financial Performance - In the first half of 2025, COREE reported revenues of 1.006 billion yuan, a significant decline of 29.63% year-on-year, with net profit dropping by 62.59% to 107 million yuan [2][12] - The company's revenue structure shows that 90% of its income comes from pharmaceutical marketing, with 93% of that revenue concentrated in a few products sourced from Hanmi [2][12] - The newborn population in China has decreased from approximately 12 million in 2020 to about 9.54 million in 2024, directly impacting market demand for COREE's core pediatric products [2][12] Market Competition - In the probiotics segment, "Mami Ai" has fallen behind competitors like Shilian Kang and Yijunkang, with sales of 392 million yuan compared to 799 million yuan and 440 million yuan, respectively [3][13] - The market for COREE's flagship product "Yitanjing" in the children's cough and phlegm relief sector is also highly competitive, indicating that growth potential for core products may have peaked [3][13] Cash Flow and Financial Health - COREE's cash flow has become increasingly strained, with trade receivables rising from 53.26 million USD at the end of 2022 to 123 million USD by mid-2025, representing 67% of current assets [3][13] - The company has experienced a net outflow of cash from operating activities since 2024, with cash reserves declining from 26.12 million USD at the end of 2022 to 10.63 million USD by mid-2025 [4][14] - High customer concentration poses risks, with the largest customer accounting for 42.9% of revenue and the top five customers contributing 65.6% [4][14] R&D and New Business Development - COREE's R&D expenditure has remained low, with a rate of only 0.3%-0.6% from 2022 to mid-2025, and total R&D spending of just 760,000 USD in 2024 [5][15] - The company's own brand products lack competitive strength in the saturated maternal and infant market, leading to a 38% year-on-year decline in revenue from this segment in the first half of 2025 [6][15] Governance and Compliance Issues - COREE's governance structure is complicated by significant related-party transactions with Hanmi, which accounts for over 50% of procurement and more than 90% of sales revenue [8][17] - Historical compliance issues include unresolved regulatory approvals for a production facility, which could lead to penalties or operational disruptions [8][17] - The rationale for fundraising is questioned, especially given the low capacity utilization rates of production facilities, which have remained below 60% [9][18]

Core Viewpoint - Core viewpoint of the article highlights that Coree Co., Ltd., a leading pediatric pharmaceutical sales service provider in China, is planning to go public on the Hong Kong Stock Exchange, with a focus on digital solutions to enhance the pharmaceutical supply chain and expand its international business [1][4]. Company Overview - Coree Co., Ltd. is the largest pediatric pharmaceutical sales service provider in China, with projected revenues of $282 million in 2024 and a net profit of $22 million. However, the company experienced a nearly 30% decline in revenue and over 50% decline in net profit in the first half of 2025 compared to the previous year [1][4]. - The company operates a comprehensive medical health solution supply chain, focusing on pharmaceutical marketing, promotion, and sales, as well as the research, production, and distribution of maternal and infant nutritional supplements [1][2]. Market Position - According to Frost & Sullivan, Coree ranks among the top ten pharmaceutical marketing and sales companies in China by revenue, holding a significant market share of 15.9% in the pediatric pharmaceutical marketing sector [1][6][9]. - The company has a vast sales network covering all 31 provinces in mainland China, with over 1,500 distributors and access to approximately 110,000 clinics, 310,000 pharmacies, and 3,600 hospitals, including 68 top-tier hospitals [2][4]. Financial Performance - The financial performance of Coree shows a decline in revenue and profit margins. For the fiscal year ending December 31, 2024, the revenue is projected to be approximately $322 million, with a gross profit of around $140 million and a net profit of $17 million. The first nine months of 2025 show a year-on-year revenue decline of 29.63% and a net profit decline of 50.15% [4][6]. - The company's revenue is heavily reliant on exclusive distribution rights for two flagship pediatric prescription drugs, which accounted for 57% to 62% of total procurement from Hanmi Pharmaceutical during the reporting periods [3][4]. Industry Overview - The pediatric pharmaceutical marketing and sales industry in China is expected to grow from RMB 6.4 billion in 2020 to RMB 9.6 billion in 2024, with a compound annual growth rate (CAGR) of 10.7%. The market is projected to reach RMB 14.8 billion by 2029, with a CAGR of 9.0% from 2024 to 2029 [6][9]. - The industry is characterized by high concentration, with the top five companies holding a combined market share of 30.2% in 2024 [9][10].

Core Viewpoint - The increasing consumer willingness to invest in health-related products, such as probiotics, is driving interest in companies like 科郦有限公司, which is preparing for an IPO in Hong Kong [1] Company Overview - 科郦 is the exclusive distributor of妈咪爱 and 易坦静 in China's outpatient market and is recognized as the largest pediatric pharmaceutical marketing, promotion, and sales service provider in China [1][5] - The company has maintained a long-term partnership with 韩美集团 since 2007, relying heavily on them for product supply [5][13] - As of 2024, the company expects to generate approximately $282 million (about 1.98 billion RMB) in revenue with a gross margin exceeding 53% [1] Revenue Breakdown - During the reporting period from 2022 to the first half of 2025, over 86% of the company's revenue came from pharmaceutical marketing, promotion, and sales, while maternal and nutritional supplements accounted for about 7% [5][6] - The revenue from pharmaceutical marketing, promotion, and sales for 2022, 2023, 2024, and the first half of 2025 was approximately $322 million, $350 million, $282 million, and $143 million, respectively [15][16] Market Position - The company is positioned as the eighth largest pharmaceutical marketing and sales service provider in China, holding a market share of 1.8%, and is the largest in pediatric pharmaceutical marketing with a 15.9% market share [19] - The Chinese probiotics supplement market is projected to grow from 24.6 billion RMB in 2024 to 40 billion RMB by 2029, with a compound annual growth rate of 10.2% [17] Financial Performance - The company's gross profit margins have shown an upward trend, increasing from 43.6% in 2022 to 56% in 2025, driven by reduced procurement costs and improved pricing negotiations with suppliers [17] - However, the company experienced a revenue decline in 2024 due to a post-pandemic market slowdown and strategic refocusing on core business areas [15][17] Competitive Landscape - The pharmaceutical distribution market in China is highly competitive, with major players including 华润医药, 上海医药, and 复星医药 [19] - The government has been expanding centralized procurement plans, which has led to price reductions and intensified competition, potentially impacting the company's pricing strategies and profit margins [19] Company Structure and Leadership - 科郦 was established in Hong Kong in 2009 and has a workforce of 1,014 employees, with a significant portion in sales and marketing [21][23] - The company is led by 林钟润, who holds a 76.2% stake, and 韩星俊, the CEO, who has extensive experience in the pharmaceutical and healthcare sectors [21][24] IPO Plans - The funds raised from the IPO will be used to expand the sales network and product portfolio, enhance production capacity, and improve brand value for its two main brands,妈咪爱 and COREE [24]

Core Viewpoint - The article discusses the upcoming IPO of the Chinese distributors of MammyCare and Yitanjing, highlighting their significant revenue and profitability metrics, including a gross margin of approximately 50% and annual revenue nearing 2 billion yuan [1]. Group 1 - The companies are based in Hong Kong and are preparing to launch their IPO, indicating a strategic move to raise capital for further growth [1]. - The annual revenue of nearly 2 billion yuan reflects strong market demand and effective distribution strategies within the Chinese healthcare sector [1]. - The gross margin of around 50% suggests a healthy profitability level, which is attractive for potential investors [1].

Core Viewpoint - The company faces significant challenges due to its heavy reliance on pediatric drug distribution, which constitutes 90.9% of its revenue, leading to a lack of resilience against market fluctuations and a decline in overall performance [1][2]. Business Performance - In the first half of 2025, the company reported revenues of $143.47 million, a decrease of 29.6% compared to $204 million in the same period of 2024, with core products experiencing a sales drop of 28.7% [1][2]. - The gross margin improved by 1.8 percentage points to 56.0%, attributed to lower supplier drug prices and cost control, but net profit fell by 50.2% to $21.83 million, indicating a significant decline in profitability [1][2]. Operational Challenges - The company is experiencing increased pressure on working capital, with inventory turnover days extending from 88 to 114 days and accounts receivable turnover days increasing from 99 to 138 days, reflecting issues with product sales and collection capabilities [2]. - Cash and cash equivalents decreased by 34% to $10.63 million as of June 30, 2025, raising concerns about short-term debt repayment capacity [2]. Customer Concentration - The revenue contribution from the top five customers rose to 65.6% in the first half of 2025, up from 43.4% in 2022, with the largest customer accounting for 42.9% of total revenue, nearly doubling from 24.7% in 2022 [2][3]. - This high customer concentration poses a risk to the company's cash flow, as any reduction in orders or delayed payments from major clients could have a direct impact [3]. Supplier Dependence - The company relies heavily on a few suppliers, with the top five accounting for 68.4% of procurement costs, and a single supplier, Hanmi Group, representing 62.0% of total purchases [3][4]. - The relationship with Hanmi Group raises concerns about the fairness of pricing, as the company’s founder holds a stake in the supplier, leading to potential conflicts of interest [4]. Management and Governance - The company is predominantly controlled by its founder, who holds 76.2% of the shares, raising concerns about governance independence [5]. - There is a significant disparity between management compensation and company performance, with executive salaries increasing substantially despite a decline in net profit [5]. Risks and Challenges - The company faces multiple risks, including policy changes affecting profit margins, declining birth rates impacting demand for infant products, and operational compliance issues that could lead to penalties [6]. - The current business model, characterized by a triple dependency on a single supplier, product, and customer, is unsustainable and poses a risk to future operations [7].

Core Viewpoint - Koryo Limited has submitted a listing application to the Hong Kong Stock Exchange, with China International Capital Corporation as its sole sponsor [1] Company Overview - Koryo Limited is a comprehensive healthcare solution provider originating from South Korea, primarily operating in China and expanding internationally. The company focuses on upgrading the pharmaceutical supply chain through digital solutions and promoting innovation in the biopharmaceutical and multifunctional nutrition sectors [4] - The company ranks among the top ten in China's pharmaceutical marketing, promotion, and sales market based on revenue for 2024, holding approximately 15.9% market share as the largest pediatric pharmaceutical marketing service provider in China [4] - Koryo's sales network covers all provincial capitals and cities in mainland China, with over 1,500 distributors reaching around 110,000 clinics, 310,000 pharmacies, and 3,600 hospitals, including 68 Class III hospitals [4] Product Lines - The company has developed a diversified and differentiated product portfolio, including research, production, and sales of maternal and infant nutritional supplements, primarily functional health supplements and infant formula [5] Financial Performance - Revenue for the fiscal years ending June 30 for 2022, 2023, 2024, and the first half of 2025 was recorded at $322 million, $350 million, $282 million, and $143 million respectively [6] - Profit for the same periods was $17.34 million, $24.77 million, $21.85 million, and $21.83 million respectively [7] - Gross profit margins for the fiscal years were 43.6%, 48.3%, 53.3%, and 56% [9] Industry Overview - The Chinese pharmaceutical industry is projected to grow from RMB 1,447.9 billion in 2020 to RMB 1,629.7 billion by 2024, with a compound annual growth rate (CAGR) of 4.0%, reaching RMB 1,985.4 billion by 2029 [11] - The pediatric pharmaceutical market is expected to grow at a CAGR of 5.0%, reaching RMB 123.2 billion by 2029 [14] - The pharmaceutical marketing, promotion, and sales industry in China is projected to reach RMB 139.0 billion by 2029, with a CAGR of 7.3% from 2024 [18] Shareholding Structure - As of December 10, 2025, the founder Mr. Lin holds 76.2% of the company's shares directly and an additional 23.8% indirectly through Coree Pohang [27] Board of Directors - The board consists of seven members, including four executive directors and three independent non-executive directors [25]

Company Overview - 科郦有限公司 is a comprehensive healthcare solution provider originating from South Korea, primarily operating in China and expanding internationally. The company focuses on upgrading the pharmaceutical supply chain through digital solutions and promoting innovation in the biopharmaceutical and multifunctional nutrition sectors [4]. - The company ranks among the top ten in China's pharmaceutical marketing, promotion, and sales market by revenue for 2024, and is the largest provider of pediatric pharmaceutical marketing and sales services in China, holding approximately 15.9% market share [4]. Business Operations - The company operates a sales network covering all 31 provinces in mainland China, including major cities and has over 1,500 distributors, reaching around 110,000 clinics, 310,000 pharmacies, and 3,600 hospitals, including 68 Class III hospitals [4]. - The main business lines include pharmaceutical marketing, promotion, and sales, as well as the research, production, and distribution of maternal and infant nutritional supplements [5]. Financial Performance - The company reported revenues of $322 million, $350 million, $282 million, and $143 million for the fiscal years ending December 31, 2022, 2023, 2024, and the six months ending June 30, 2025, respectively [6]. - The profit figures for the same periods were $17.34 million, $24.77 million, $21.85 million, and $21.83 million [6]. Profitability Metrics - The gross profit margins for the company were 43.6%, 48.3%, 53.3%, and 56% for the fiscal years ending December 31, 2022, 2023, 2024, and the six months ending June 30, 2025, respectively [8]. - The net profit margins were 5.4%, 7.1%, 7.7%, and 15.1% for the same periods [9]. Industry Overview - The Chinese pharmaceutical industry is projected to grow from RMB 1,447.9 billion in 2020 to RMB 1,629.7 billion by 2024, with a compound annual growth rate (CAGR) of 4.0%, reaching RMB 1,985.4 billion by 2029 [10]. - The pediatric pharmaceutical market is expected to grow at a CAGR of 5.0%, reaching RMB 123.2 billion by 2029 [13]. - The pharmaceutical marketing, promotion, and sales industry in China is projected to reach RMB 139 billion by 2029, with a CAGR of 7.3% from 2024 [17]. Market Trends - The pediatric pharmaceutical marketing and sales sector is expected to grow from RMB 6.4 billion in 2020 to RMB 9.6 billion by 2024, with a CAGR of 10.7%, and is projected to reach RMB 14.8 billion by 2029 [20]. - The probiotics supplement market in China is anticipated to grow from RMB 17.2 billion in 2020 to RMB 24.6 billion by 2024, with a CAGR of 9.4%, and is expected to reach RMB 40 billion by 2029 [22].