Core Viewpoint - Yuwang Bio Nutrition Co., Ltd. has submitted its IPO prospectus in Hong Kong, revealing significant financial challenges, including a 74% drop in net profit and a high debt ratio, raising concerns about its future profitability and governance practices [1][3][12]. Financial Performance - Yuwang Bio is the largest supplier of food-grade refined fish oil globally, with a market share of 8.1% as of 2024 [3]. - The company's revenue and net profit for the years 2022 to 2025 are as follows: - 2022: Revenue of 534 million RMB, Net Profit of 67 million RMB - 2023: Revenue of 661 million RMB, Net Profit of 102 million RMB - 2024: Revenue of 832 million RMB, Net Profit of 125 million RMB - 2025 (H1): Revenue of 343 million RMB, Net Profit of 23 million RMB - The company experienced a year-on-year revenue decline of 27.13% and a net profit decline of 74.01% in the first half of 2025 [3][5]. Profitability and Margin Issues - The gross profit margin has decreased from 25.4% in 2022 to 20.7% in the first half of 2025, contributing to the decline in net profit [3][5]. - The average selling prices of several core products have significantly dropped: - High-purity fish oil: from 323 thousand RMB/ton to 133 thousand RMB/ton (58.82% decrease) - Medium-purity fish oil: from 158 thousand RMB/ton to 74 thousand RMB/ton (53.16% decrease) - Low-purity fish oil: from 78 thousand RMB/ton to 45 thousand RMB/ton (42.31% decrease) - Fish oil soft capsules: from 155 thousand RMB/ton to 99 thousand RMB/ton (36.13% decrease) [5]. Debt and Dividend Practices - The company's debt ratio was over 90% in 2024 and remained above 83% in the first half of 2025 [7][8]. - Yuwang Bio declared a "clearing dividend" of 320 million RMB, which exceeds the total net profit of 294 million RMB for the years 2022 to 2024, raising concerns about the impact on future shareholder interests [10][11]. Internal Control and Compliance Issues - The company reported a total of 1.59 billion RMB in illegal bill financing and 2.42 billion RMB in misused loan funds, totaling over 4 billion RMB in compliance issues [2][12]. - Yuwang Bio attributed these violations to a lack of understanding of regulatory requirements, which raises questions about its internal governance and control mechanisms [15].

Group 1 - Yuwang Biological Nutrition Co., Ltd. has submitted its prospectus and is preparing for an IPO on the Hong Kong Stock Exchange [1] - Prior to restructuring, Yuwang Pharmaceutical declared a dividend of 320 million RMB in December 2024, with Yuwang Biological Nutrition's payable dividend amounting to 55.8 million RMB [2] - For the first half of the year, Yuwang Biological Nutrition reported revenue of 340 million RMB, with a profit decline of 74% year-on-year [3] Group 2 - Yuwang Biological Nutrition's revenue for 2022, 2023, and 2024 is projected to be 534 million RMB, 661 million RMB, and 832 million RMB respectively, with gross profits of 136 million RMB, 185 million RMB, and 216 million RMB [3][4] - The gross profit margins for the same years are 25.4%, 28.1%, and 26% [3][4] - The net profit for 2022, 2023, and 2024 is estimated at 67.3 million RMB, 102 million RMB, and 125.3 million RMB, with net profit margins of 12.6%, 15.4%, and 15.1% [4][5] Group 3 - As of June 30, 2025, Yuwang Biological Nutrition's net asset value is reported to be 71.3 million RMB [6] - The company has non-current assets of 96.3 million RMB and current assets of 331.9 million RMB as of the same date [6] - Yuwang Biological Nutrition's adjusted net profit for the first half of 2025 is 35.4 million RMB, a decrease of 59.6% compared to the same period last year [5] Group 4 - Velantra has invested 19 million USD to acquire a 15% stake in Yuwang Biological Nutrition [7][11] - The board of directors includes Liu Rucui as the chairman and non-executive director, with Zhang Jianquan and Zang Xiurui as executive directors [7] - Prior to Velantra's investment, Yuwang Biological Nutrition was primarily a family-owned business [13]

Core Viewpoint - Yuwang Bio-Nutrition Co., Ltd. has submitted a listing application to the Hong Kong Stock Exchange, aiming to become a global leader in the nutrition and health sector, particularly in the refined fish oil market [1][3]. Company Overview - Yuwang Bio-Nutrition is the largest supplier of food-grade refined fish oil and its products globally, holding a market share of 8.1% as of 2024 [3]. - The company is one of the pioneers in China to achieve industrial-scale production of food-grade fish oil and pharmaceutical-grade fish oil [3]. Business Segments - The main business activities include the development, production, and sale of: 1. Refined fish oil 2. Fish oil soft capsules and other dietary supplement products, including CDMO and branded dietary supplements 3. Pharmaceuticals and other products [3]. Revenue Contribution - Refined fish oil, fish oil soft capsules, and other dietary supplement products have consistently contributed to the majority of the company's revenue, accounting for approximately: - 97.5% in 2022 - 97.0% in 2023 - 98.0% in 2024 - 98.8% for the six months ending June 30, 2025 [3]. Financial Performance - The company reported revenues of approximately: - 534.3 million RMB in 2022 - 661.0 million RMB in 2023 - 832.3 million RMB in 2024 - 343.0 million RMB for the six months ending June 30, 2025 [4]. - Net profit and total comprehensive income for the same periods were approximately: - 67.3 million RMB in 2022 - 102.0 million RMB in 2023 - 125.3 million RMB in 2024 - 22.8 million RMB for the six months ending June 30, 2025 [4]. Industry Competition - The global fish oil nutrition industry is highly competitive, with major brands leveraging technological advantages, brand recognition, abundant raw materials, and advanced production techniques to capture significant market shares [3]. - The top five players are estimated to account for about 32.4% of the total industry revenue in 2024 [3].