Summary of Xianle Health Conference Call Company Overview - Xianle Health is a leading CDMO (Contract Development and Manufacturing Organization) in the nutritional health food sector, with over 30 years of experience in providing OEM services for health products [3][4]. Core Business and Growth Drivers - The gummy business is identified as the core growth engine, achieving a compound annual growth rate (CAGR) of over 50% since 2020, with a projected global market share of 3.6% by 2024, ranking second [2][6]. - The revenue structure has shifted, with overseas business accounting for 60% of total revenue, surpassing domestic sales [2][3]. - The company has established a strong presence in emerging markets like Brazil, contributing positively to future performance [3]. Financial Performance - Overall gross margin remains stable at over 30%, with a net profit margin around 7% [2][4]. - Domestic operations exhibit higher profitability compared to overseas, with the highest gross margin globally attributed to the Chinese mainland business due to pricing power and technological advantages [4]. - The company anticipates double-digit revenue growth from 2025 to 2027, with profit growth around 20% after excluding impairment losses [2][7]. Market Dynamics and Competitive Landscape - The U.S. market's concentration ratio (CR3) has increased from 9.4% in 2019 to 18.4% in 2025, indicating a trend towards higher industry concentration, which benefits Xianle Health as a leading manufacturer [2][6]. - The Chinese health supplement market is experiencing explosive growth from emerging brands, creating significant opportunities for Xianle Health as a top-tier OEM [5]. Product Category Insights - The revenue contribution from soft capsules has decreased from 80% in 2012 to about 30% currently, but is expected to rebound by 2026 [3]. - Gummy products have shown remarkable growth, with a 175% year-on-year increase in 2020 and a sustained CAGR of over 50% [3][7]. - Other categories like tablets and functional beverages are projected to decline significantly in the near term [3]. Future Outlook - The company expects a slight increase in gross margin due to the growth of high-margin products like gummies and tablets, while sales and management expenses may rise temporarily due to overseas expansion efforts [7]. - The net profit margin is projected to stabilize around 7%, despite potential fluctuations due to increased expenses [7]. Key Takeaways - Xianle Health is well-positioned in the global nutritional health food market, leveraging its competitive advantages and responding to market trends effectively [6]. - The company’s strategic focus on high-margin products and expansion into new markets is expected to drive future growth [2][7].

Group 1: Market Overview - The global nutritional health food solutions market revenue has grown from $21.2 billion in 2020 to an estimated $29.4 billion by 2024, with a compound annual growth rate (CAGR) of 8.5%. It is projected to reach $42.4 billion by 2029, with a CAGR of 7.6% from 2024 to 2029 [3] - The company, Xianle Health, ranks third globally in the nutritional health food solutions market and holds the first position in China. It is the second-largest provider of gummy and soft capsule nutritional health food solutions globally based on 2024 revenue [3] Group 2: Financial Performance - Xianle Health reported a revenue of 3.291 billion yuan for the fiscal year ending September 30, 2025, reflecting a slight increase of 7.96% year-on-year. However, net profit plummeted by approximately 74% to 55.535 million yuan from 213 million yuan in the previous year [5] - The preliminary earnings forecast for 2025 indicates a significant decline in net profit, expected to be between 101 million and 151 million yuan, down 53% to 69% from 325 million yuan in 2024 [5] - The company faces a "revenue without profit" dilemma, primarily due to expanded losses in the personal care business and one-time expenses from new business investments, including a 195 million yuan asset impairment loss for the personal care segment in 2025 [5] Group 3: Asset Quality and Financial Health - As of September 30, 2025, the company's net current assets dropped by 56.8% to 517.226 million yuan from 1.198 billion yuan at the end of 2024, indicating a significant cash flow pressure [6] - The company's total liabilities increased from 2.629 billion yuan in 2023 to 3.129 billion yuan in 2025, with a rising debt ratio from 50.6% to 55.1%, significantly higher than industry benchmarks [8] - Trade receivables rose to 882 million yuan, a 34.7% increase from 655 million yuan at the end of 2023, indicating slower cash collection and exacerbating cash flow issues [7] Group 4: Business Challenges - The personal care business has become a financial burden, lacking synergy with the core business and leading to significant asset impairment [5] - The company’s overseas revenue accounted for 61.2% of total income, with the Americas contributing 39.2% and Europe 17.0%. This heavy reliance on international markets exposes the company to geopolitical and regulatory risks [10] - The company faces challenges from rising trade protectionism and fluctuating tariffs in major markets like the US and EU, which could impact product exports [12] Group 5: Production Capacity and Utilization - The production capacity utilization rates for soft capsules and gummies have shown gradual improvement but remain below optimal levels, with soft capsules at 60.4% and gummies at 79.7% [14] - Other product lines, such as powders and hard capsules, have significantly low utilization rates, with powder utilization dropping to 18.2% by 2025 [14] Group 6: Competitive Landscape - The nutritional health food solutions market is characterized by intense competition and low market concentration, with the top five players holding only 10.5% of the global market share [16] - Despite Xianle Health's position as the third-largest player globally, its market share of 2.0% is weak, facing competition from established companies like GNC and emerging brands that prioritize speed and innovation [16]

Investment Rating - The report does not explicitly state an investment rating for the company. Core Insights - Xianle Health is a leading provider of nutritional health food solutions, ranking third globally in market share and first in China, with a steady growth trajectory and sustainable development [6][11]. - The company operates on a "product + service" model, offering a diverse range of health solutions tailored to various demographics, including pregnant women, infants, children, and the elderly [6][11]. - Xianle Health has established a comprehensive service model that spans the entire industry value chain, from market insights to customized solutions and marketing support [16]. Company Overview - **Company Profile**: Xianle Health is a prominent player in the nutritional health food solutions market, with a significant presence in both global and Chinese markets [6]. - **Ownership Structure**: The company has a concentrated ownership structure, primarily controlled by the Lin family through direct holdings and investment platforms [7]. - **Management Team**: The core team has extensive industry experience, with key members holding significant positions since the company's inception [9][10]. Product Overview - **Target Demographics**: The company caters to a wide range of consumers, including pregnant women, infants, children, adolescents, and the elderly [11]. - **Product Categories**: Xianle Health's offerings include soft capsules, gummies, drinks, tablets, powders, and hard capsules, with a focus on innovative formulations [11][12]. - **Core Products**: The company’s main products, soft capsules and gummies, hold the second-largest global market share in their respective categories [11]. Business Segmentation - **Product Distribution**: In 2023, the company generated total revenue of 35.82 billion yuan, with soft capsules and gummies contributing 15.27 billion and 7.4 billion yuan, respectively [25]. - **Regional Distribution**: In 2024, revenue from mainland China and Hong Kong was projected at 16.61 billion yuan, accounting for 39.4% of total revenue [28]. - **Channel Distribution**: The company primarily sells directly to brand owners and retailers, with direct sales accounting for 99.4% of total revenue in 2023 [31]. Industry Overview - **Market Growth**: The global nutritional health food industry is expected to grow at an average annual rate of approximately 5.6% from 2024 to 2029, reaching a market size of 249 billion USD by 2029 [36]. - **Competitive Landscape**: The industry is characterized by a fragmented market with increasing competition, particularly in China, where the top five companies hold about 15.3% of the market share [62]. - **Cost Analysis**: The cost structure within the industry shows differentiation, with scale efficiencies helping to reduce volatility in production costs [66].

Core Viewpoint - Xianle Health Technology Co., Ltd. has submitted an application for listing on the Hong Kong Stock Exchange, aiming to enhance its global strategy and capital strength [2][5]. Company Overview - Established in 1993 and headquartered in Shantou, Guangdong, Xianle Health is one of China's large contract manufacturers in the nutrition and health food sector [4]. - The company covers the entire service chain from product research and development to manufacturing, packaging, and marketing [4]. Market Position - If the Hong Kong listing is successful, Xianle Health is expected to become the first A+H listed company in the nutrition and health industry [5]. - According to data from Zhaoshang Consulting, Xianle Health holds the third-largest market share in the global nutrition and health food solutions market and ranks first in China [7]. Financial Performance - Revenue for 2023, 2024, and the first nine months of 2025 is projected at RMB 3.582 billion, RMB 4.211 billion, and RMB 3.291 billion, respectively [8][9]. - Net profit for the same periods is expected to be RMB 240.3 million, RMB 282.0 million, and RMB 55.5 million, with gross profit margins of 29.7%, 30.6%, and 31.5% [8][9]. - The company anticipates a significant decline in net profit for 2025, projecting a decrease of 53% to 69% compared to the previous year [10]. Shareholding Structure - Major shareholders include Lin Peiqing, Chen Qiong, Guanghui Investment, and Abama Enjoy Dividend No. 96, collectively holding approximately 59.24% of the company's total issued share capital [10][12]. Board of Directors - The board consists of nine members, including three executive directors, two non-executive directors, and four independent non-executive directors [13]. - Lin Peiqing serves as the executive director and chairman, while Chen Qiong is the executive director and vice president [16][18]. Stock Performance - As of January 30, the stock price of Xianle Health was reported at RMB 23.40, with a total market capitalization of RMB 7.199 billion [19][20].

Financing Dynamics - OpenAI is in discussions with several tech giants and Middle Eastern sovereign wealth funds to raise up to $100 billion, potentially valuing the company at $750 billion or more if negotiations proceed smoothly [3] - The potential investors include Microsoft, Nvidia, Amazon, SoftBank Group, and various sovereign wealth funds from the Middle East [3] - If successful, this funding round will enhance OpenAI's "cash + computing power" moat, accelerating its evolution towards general artificial intelligence and platform ecosystems [3] Brand Dynamics - Xianle Health has officially submitted its application for a mainboard listing on the Hong Kong Stock Exchange, aiming to deepen its global strategy and diversify its capital operations [7] - The company has a strong R&D and production capability across various dosage forms, with projected compound annual growth rates of 41% and 30% for soft capsules and gummies from 2022 to 2024, respectively [7] - This dual-platform construction is seen as a significant value leap, enhancing capital strength and competitiveness in the nutrition and health industry [7] Corporate Developments - Allbirds announced plans to close all full-price stores in the U.S. by the end of February, refocusing on e-commerce to create a simpler and more profitable business structure [10] - The company will retain two outlet stores in the U.S. and continue operations in London, marking a strategic shift towards online sales and international distribution [10] - This move is part of Allbirds' strategy to improve operational efficiency and business flexibility [10] Investment and Upgrades - Danone plans to invest €2.2 million (approximately ¥18.34 million) to upgrade its natural mineral water bottling plant in La Salvetat, France, to optimize production performance and enhance energy and water-saving measures [13] - An additional investment of €1.3 million (approximately ¥10.84 million) is planned for 2026, which includes improving insulation and replacing existing cooling towers, expected to reduce water consumption by 20% and electricity consumption by 5% [13] - This investment aims to enhance the appeal of "green mineral water" and boost production capacity during peak seasons [13] Mergers and Acquisitions - Elon Musk is reportedly considering merging SpaceX, Tesla, and xAI, with discussions still in the early stages [14] - Two main merger scenarios are being discussed: one between SpaceX and Tesla, and another between SpaceX and xAI, with the latter potentially occurring before SpaceX's planned IPO [14] - These mergers could enhance resource and funding synergies among Musk's companies [14] Personnel Changes - LVMH has proposed the appointment of Ariane Gorin as a group director at its upcoming annual shareholders' meeting, succeeding Marie-Laure Sauty de Chalon [19] - Gorin brings over 20 years of experience in technology, marketing, and strategic consulting, which could further empower LVMH's development [19] - Pieter Mulier will step down as creative director of Alaïa after five years, with rumors suggesting he may join Versace [22] - Givaudan announced personnel adjustments in its executive committee, promoting Christina Yeo and Fanny Iglesias to key positions to ensure strategic continuity [25]

Core Viewpoint - Xianle Health's stock has experienced a decline of 11.33% year-to-date, with significant drops in recent trading periods, indicating potential concerns regarding its market performance and investor sentiment [1]. Financial Performance - For the period from January to September 2025, Xianle Health reported a revenue of 3.291 billion yuan, reflecting a year-on-year growth of 7.96% [2]. - The net profit attributable to shareholders for the same period was 260 million yuan, showing an increase of 8.53% compared to the previous year [2]. Stock and Market Activity - As of February 2, Xianle Health's stock price was 22.93 yuan per share, with a market capitalization of 7.054 billion yuan [1]. - The stock has seen a trading volume of 43.247 million yuan, with a turnover rate of 0.73% [1]. - The company experienced a net outflow of 1.7844 million yuan in principal funds, with significant selling pressure observed [1]. Shareholder Information - As of September 30, 2025, Xianle Health had 11,800 shareholders, a decrease of 2.97% from the previous period [2]. - The average number of circulating shares per shareholder increased by 3.02% to 21,811 shares [2]. Dividend Distribution - Since its A-share listing, Xianle Health has distributed a total of 583 million yuan in dividends, with 415 million yuan distributed over the last three years [3]. Institutional Holdings - Notable new institutional shareholders include Dongfanghong Jingdong Big Data Mixed A and Dongfanghong New Power Mixed A, both entering the top ten circulating shareholders [3].

Core Viewpoint - SIRIO PHARMA CO., LTD. (referred to as "Xianle Health") submitted its IPO application to the Hong Kong Stock Exchange on January 29, 2026, aiming for a listing on the main board, with CITIC Securities as the sole sponsor. The company, which went public on the A-share market in September 2019, has a total market capitalization of approximately 7.199 billion RMB as of January 29, 2026. Xianle Health is a leading provider of nutritional health food solutions, holding the third-largest market share globally and the largest in China in this sector based on 2024 revenue [1][1]. Financial Performance - For the fiscal years ending December 31, 2024, and the first nine months of 2025, the company's revenues were approximately 4.211 billion RMB and 3.291 billion RMB, respectively. The net profit for the same periods was 2.82 billion RMB and 0.56 billion RMB, showing a significant decline of 73.89% year-on-year for the first nine months of 2025. The gross profit margins were 30.61% and 31.47% for these periods [7][9][11]. Market Position - Xianle Health is recognized as the third-largest player in the global nutritional health food solutions market and the largest in China, based on revenue projections for 2024. The company is also the second-largest provider of gummy and soft capsule nutritional health food solutions worldwide [1][1]. Product Offerings - The company has developed a comprehensive range of solutions catering to various customer needs across different demographics, including pregnant women, infants, children, adolescents, and the elderly. Its product categories address core health needs such as basic vitamins and minerals, gut health, metabolic health, and immune support, among others. Additionally, Xianle Health has established a presence in the pet nutrition sector [3][3]. Global Operations - Xianle Health has a global business footprint that spans markets in China, the Americas, Europe, and the Asia-Pacific region. The company operates six production bases (with one under construction) and five global R&D centers, reaching customers in over 50 countries and regions. Notably, overseas market revenue accounted for 61.2% of total revenue during the first nine months of 2025 [5][9]. Revenue Sources - The primary revenue for Xianle Health comes from the sales of nutritional health food products, with soft capsules and gummies being the largest contributors. In 2024, these two product types accounted for a significant portion of the company's revenue, while other forms such as drinks, tablets, powders, and hard capsules contributed less [9][9].

Company Overview - Xianle Health Technology Co., Ltd. is a leading provider of nutritional health food solutions, holding the third-largest market share globally and the largest in China as of 2024 [2] - The company has transitioned its strategic focus from pharmaceuticals to nutritional health foods since its establishment in 1993, developing a comprehensive solution portfolio that caters to various demographics and product forms [2][4] - Xianle Health is recognized as a pioneer in establishing a global business layout in the nutritional health food solutions market, supported by a robust production and R&D network [2][5] Product Offerings - The company offers a wide range of products that address health needs across all age groups, including pregnant women, infants, children, adolescents, and the elderly [4] - It provides various product forms, including soft capsules, gummies, beverages, tablets, powders, and hard capsules, and is innovating to meet diverse market preferences [5][15] Financial Performance - The company's revenue for the nine months ending September 30 for 2023, 2024, and 2025 was approximately CNY 3.582 billion, CNY 4.211 billion, and CNY 3.291 billion, respectively [6] - Profit for the same periods was approximately CNY 240 million, CNY 282 million, and CNY 55.5 million [7] - The gross profit margin has shown a steady increase, with rates of 29.7%, 30.6%, and 31.5% for the respective years [8] Industry Insights - The global nutritional health food market is projected to grow from USD 190 billion in 2024 to USD 249 billion by 2029, with a compound annual growth rate (CAGR) of approximately 5.6% [11] - The nutritional health food solutions market is expected to expand from USD 21.2 billion in 2020 to USD 29.4 billion in 2024, with a CAGR of 8.5% [12] - The market for gummy nutritional health food solutions is anticipated to grow from USD 2.4 billion in 2020 to USD 3.8 billion in 2024, reflecting a CAGR of 10.3% [15]

Company Overview - Xianle Health Technology Co., Ltd. is a leading provider of nutritional health food solutions, holding the third-largest market share globally in the nutritional health food solutions market as of 2024, and ranking first in China [4] - The company was established in 1993 and has shifted its strategic focus from pharmaceuticals to nutritional health foods, developing a comprehensive solution portfolio that covers a wide range of products for all demographics [4][5] - Xianle Health has established a global business layout with integrated production bases, R&D centers, and supply chain networks, enabling it to provide end-to-end solutions to clients worldwide [4][7] Financial Performance - The company's revenue for the nine months ending September 30 for 2023, 2024, and 2025 was approximately CNY 3.582 billion, CNY 4.211 billion, and CNY 3.291 billion, respectively [8][11] - Profit for the same periods was approximately CNY 240 million, CNY 282 million, and CNY 55.5 million [9][11] - Gross profit margins for these periods were 29.7%, 30.6%, and 31.5%, indicating a steady increase in profitability [10][11] Industry Insights - The global nutritional health food market is projected to grow from USD 190 billion in 2024 to USD 249 billion by 2029, with a compound annual growth rate (CAGR) of approximately 5.6% [12] - The nutritional health food solutions market has seen significant growth, with revenue increasing from USD 21.2 billion in 2020 to USD 29.4 billion in 2024, and expected to reach USD 42.4 billion by 2029, reflecting a CAGR of 8.5% [15] - There is a growing trend towards diverse dosage forms in nutritional health foods, with gummies and soft capsules gaining popularity due to their convenience and consumer appeal [17]

The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Application Proof. Application Proof of SIRIO PHARMA CO., LTD. 仙 樂 健 康 科 技 股 份 有 限 公 司 (A joint stock company incorporated in the People's Republic of Chin ...