Chinanews.com, Feb. 9-Chinanews.com Finance and Economics learned that according to the disclosure of the Hong Kong Stock Exchange on the evening of February 8, Weimeizi Industrial (Guangdong) Co., Ltd. (hereinafter referred to as "Weimeizi") submitted a prospectus to the Hong Kong Stock Exchange and proposed to be listed on the main board of Hong Kong.
Chinanews.com has previously reported that on January 18, the China Securities Regulatory Commission announced that the progress of the "approval of overseas initial public offerings (including derivative forms of common shares, preferred shares and other stocks) of Weimeizi Industrial (Guangdong) Co., Ltd." has reached the stage of receiving materials.
Founded in 2014, Weimeizi owns oral care brand Saky and children's oral care brand SakyKids. The Saky brand was launched in 2006 and the SakyKids brand was launched in 2015 to provide oral care products for children under the age of 12.
Weimeizi is a leading provider of oral care products in China, which aims to improve consumers' oral health and hygiene through one-stop and diversified products. Mainly engaged in the development and sale of a diversified oral care product portfolio covering four major oral care product categories, namely, basic oral care for adults, basic oral care for children, electric oral care and professional oral care.
According to Frost Sullivan, Weimeizi ranks fourth in China's oral care market with 5.3% of the market share in terms of retail sales of all oral care products in 2020. In addition, Weimeizi has established a leading position in a number of sub-product categories in the oral care product market. Weimeizi is the largest provider of oral care products for children in China, with a market share of 20.4% (in terms of retail sales in 2020). Wei Meizi also has the highest market share among Chinese whitening toothpaste brands, at 11.3% (in terms of retail sales in 2020). In addition, Weimeizi ranks fourth in China's electric oral care market with 4.3% of the market share in terms of retail sales in 2020.
In terms of ownership structure, before IPO, Wang Ziquan held 15.58%, Cao Ruian 14.86%, Yu Litao 1.6%, Huang Xiaoxia 2.78%, Junlian Maolin 1.38%, Magna Oceanview Express 14.28%, Zhuhai Luoshu II 12.65%, Zhuhai Luoshu 3.13%, Zhuhai Shuke 4.93%. Suzhou Zhongding holds 1.67% and Ningbo Zhongding holds 0.84%.
Earlier, in 2014, Wei Meizi introduced Lenovo's Junlian Capital to complete round A financing. In 2016, Zhong Ding Venture Capital and Lanxin Asia Capital were introduced to complete round B financing.
In terms of financial data, according to the prospectus, Weimeizi's revenue in 2019 and 2020 was 1.662 billion yuan and 1.616 billion yuan respectively; revenue in the first nine months of 2021 was 1.23 billion yuan, compared with 1.072 billion yuan in the same period last year; it is worth noting that Weimeizi lost 494 million yuan in the first nine months of 2021, compared with a profit of 134 million yuan in the same period last year. In addition, Weimeizi's adjusted net profit for the first nine months of 2021 was 129 million yuan, compared with 82.16 million yuan for the same period last year.
In addition, according to the prospectus, Weimeizi's gross profit margin was 53.8%, 58.1% and 62.8% respectively in 2019, 2020 and the first nine months of 2021, showing an increasing trend year by year. It is worth noting that Weimeizi's gross profit margin was 62.8% in the first three quarters of 2021. In addition, according to non-international financial reporting standards, the adjusted net interest rate for the first three quarters of 2021 is 10.5%.
According to the prospectus, for the years ended December 31, 2019 and 2020, and for the nine months ended September 30, 2020 and 2021, 55.7%, 58.4%, 56.8% and 58.8% of Vimezi's earnings came from toothpaste products (including adult and children's toothpaste), respectively.
In 2019 and 2020 and the nine months ended September 30, 2021, the total revenue generated by the five major customers accounted for 28.8%, 29.3% and 24.3%, respectively, while the total revenue generated by the largest customers accounted for 10.3%, 9.7% and 7.5% of the total revenue, respectively.
Chinanews.com financial consulting prospectus found that in the nine months to September 30, 2020 and 2021, litigation and related expenses were 6.62 million yuan and 16.92 million yuan, respectively. It is worth noting that in the nine months ended September 30, 2021, Weimeizi litigation and related expenses soared to 16.92 million yuan.
From the perspective of industry development, China's oral care market developed steadily from 2016 to 2020, and its total retail sales increased from 49.6 billion yuan to 88.4 billion yuan, with a compound annual growth rate of 15.5 percent. In the future, with the increase in the penetration rate of diversified oral care products and the upgrading of consumption, retail sales in China's oral care market are expected to reach 152.2 billion yuan in 2025, with a compound annual growth rate of 11.5% from 2020.
In addition, China's children's oral care market developed steadily from 2016 to 2020, and its total retail sales increased from 2.9 billion yuan to 4.8 billion yuan, with a compound annual growth rate of 13.4 percent. In the future, with the enhancement of parents' awareness of protecting children's oral environment and the development of technology, the retail sales of children's oral care market is expected to reach 8 billion yuan in 2025, with a compound annual growth rate of 10.8 percent from 2020.
The funds raised by IPO will be used for online and offline brand building to increase brand and product awareness, further consolidate the brand image and improve marketing efficiency of professional oral care product providers that provide one-stop oral care products to consumers; for product research and development activities and to strengthen research and development capabilities; to strengthen offline sales and distribution network and market penetration Used for equity investment in premium niche oral care brands, with the goal of establishing close strategic cooperation with them; for strengthening business digitization and optimizing information technology infrastructure; and for working capital and general corporate purposes.