Core Viewpoint - Saintong Special Medical (Qingdao) Nutrition Technology Co., Ltd. is applying for an IPO on the Hong Kong Stock Exchange, potentially becoming the first domestic special medical food company listed in Hong Kong, backed by Shengyuan International and facing competition from foreign brands in a rapidly growing market [1][3]. Company Overview - Saintong Special Medical was established in 2019, evolving from Shengyuan's special medical division, and focuses on the research, production, and sales of special medical purpose formula foods [3]. - The company has 19 shareholders, with Shengyuan Nutrition (Hong Kong) holding 48.68% of the shares, and the Zhang family collectively owning 52.26% [3]. - The company has received investments from notable institutions such as Honghui Fund and Hillhouse Capital [3]. Financial Performance - Revenue projections for Saintong Special Medical are approximately CNY 491 million, CNY 654 million, and CNY 834 million for the years 2022, 2023, and 2024, respectively, with a compound annual growth rate (CAGR) of 30.3% [3][7]. - Adjusted net profits for the same years are projected to be around CNY 121 million, CNY 175 million, and CNY 199 million, with a CAGR of 28.5% [7]. Market Context - The special medical food market in China is expected to grow from CNY 73 billion in 2019 to CNY 232 billion by 2024, reflecting a CAGR of 26.1% [12]. - Saintong Special Medical ranks first among domestic brands and fourth overall in the special medical food market, with a market share of 6.3% [10]. Product Lines and Distribution - The company has launched five product lines and is developing 16 new products, with a distribution network of 326, 346, and 338 offline distributors for the years 2022, 2023, and 2024, respectively [5]. - As of December 31, 2024, products are sold to over 700 hospitals and medical institutions, and available at more than 17,000 retail points [5]. Competitive Landscape - Saintong Special Medical faces significant competition from established foreign brands like Nestlé and Danone, which dominate the market with 57% and 18.4% market shares, respectively [10]. - The company primarily targets third- and fourth-tier cities, aiming to leverage its distribution network in these areas [10]. Research and Development - The company’s R&D expenditures from 2022 to 2024 are CNY 6.51 million, CNY 10.81 million, and CNY 13.33 million, representing only 1.3%, 1.7%, and 1.6% of total revenue, raising concerns about its R&D capabilities [11].