Core Viewpoint - Mandis International, a subsidiary of Sanofi Pharmaceutical focusing on hair loss treatment, has submitted its IPO application to the Hong Kong Stock Exchange, but a significant pre-IPO dividend of 770 million yuan raises concerns about the company's future prospects [1][3][7] Financial Performance - Mandis International has maintained a leading position in China's hair loss medication market, with its main brand "Mandis" holding a 57% market share in 2024 [2] - The company's revenue grew from 982 million yuan in 2022 to 1.455 billion yuan in 2024, with a compound annual growth rate of 21.7%, while net profit increased from 202 million yuan to 390 million yuan during the same period [2] - The gross profit margin has consistently exceeded 80%, reaching 82.7% in 2024, significantly higher than the industry average [2] Dividend Strategy - The company declared a sudden dividend of 770 million yuan in the first half of 2025, which is 4.4 times its net profit of 174 million yuan for that period, surpassing the total dividends of the previous three years [3] - This dividend payout has drastically reduced the company's net current assets from 595 million yuan at the end of 2024 to just 400,000 yuan in the first half of 2025 [3] - The primary beneficiaries of this dividend are the controlling shareholders, who hold 87.16% of the company [3] Research and Development - Despite the high dividend, the company's R&D expenditure has decreased significantly, dropping to 19.5 million yuan in the first half of 2025, only one-third of the amount from the same period in 2024 [3] - The R&D team has also shrunk to 46 members, contrasting sharply with the high sales expenses, which reached 374 million yuan in the first half of 2025, accounting for 50.4% of revenue [3] Market Challenges - The company faces significant challenges as its core patent is set to expire in 2028, which may lead to an influx of generic drugs and potential price wars [4] - Competitive pressures are already evident, with a 52% drop in the bidding price for its core product in provincial drug procurement in 2024 [4] - Additionally, the company is contending with competition from consumer brands that have entered the hair loss treatment market [4] Future Strategy - The IPO proceeds are intended to enhance R&D capabilities, strategic business collaborations, digital operations, and brand building [6] - The company is expanding its product line with new treatments, including D2501 for vitiligo and WS2505 for obesity, with the latter expected to enter clinical trials soon [6] - However, these new products are unlikely to contribute significantly to revenue in the short term, leaving the company heavily reliant on its minoxidil product line during a critical period of patent expiration and increased competition [6] Conclusion - Mandis International has established a strong market position and profitability in the hair loss treatment sector, but faces challenges from its pre-IPO dividend strategy, high sales costs, declining R&D investment, and impending patent expiration [7] - Investors should consider both the short-term financial metrics and the long-term growth potential, as sustained innovation and product diversification will be crucial for maintaining long-term value [7]

Core Viewpoint - Mandi International has submitted an IPO application to the Hong Kong Stock Exchange, aiming for an independent listing, following the announcement of its spin-off from 3SBio, which will no longer retain any equity in Mandi International [1][3]. Company Overview - Mandi International focuses on developing comprehensive and long-term solutions for skin health and weight management, launching its first 5% minoxidil product in China in 2001, thus entering the hair loss treatment market early [3]. - The Mandi series, which includes products like Mandi 5% minoxidil solution and foam, constitutes a significant portion of the company's revenue, accounting for 91.7% to 92.3% of total product sales from 2022 to 2024 [3][4]. Financial Performance - Mandi International's revenue from 2022 to 2024 is projected to be CNY 9.82 billion, CNY 12.28 billion, and CNY 14.55 billion, with year-on-year growth rates of 25.05% and 18.49% for 2023 and 2024, respectively [4]. - The net profit for the same period is expected to be CNY 2.02 billion, CNY 3.41 billion, and CNY 3.9 billion, with significant growth rates of 68.81% and 14.37% in 2023 and 2024 [4]. Market Dynamics - The hair loss treatment market in China is projected to grow to CNY 21 billion by 2024, with over 339 million people affected by hair loss, more than 60% of whom are under 35 years old [3][4]. - The market for hair loss products has become highly competitive, with various companies, including traditional hair care brands and new entrants from the beauty and pharmaceutical sectors, vying for market share [5][6]. Future Plans - Mandi International plans to use the net proceeds from the IPO for enhancing R&D capabilities, digital operations, brand building, and working capital [4]. - The company aims to solidify its leading position in the hair health sector and accelerate the launch of new business segments [4].