The Zhitong Finance App learned that according to the Hong Kong Stock Exchange's disclosure on September 30, Newmans Health Food Holdings Co., Ltd. (Newmans) once again submitted a statement to the main board of the Hong Kong Stock Exchange, with Caitong International Finance Co., Ltd. as its sole sponsor.

According to the prospectus, Newmans is mainly engaged in marketing, sales and distribution of finished nutritional products in China. The company's nutritional products are sold under exclusive brands (i.e. “Newmans” and “Newmans” (English “Nemans”)), and can be roughly divided into five main categories, namely algae oil, DHA, probiotics, vitamins, multi-dimensional nutrients, and algae calcium products.

Algae oil DHA products are the company's main products and account for a large part of the revenue during the performance period. In fiscal year 2021, fiscal year 2022, fiscal year 2023, six months of 2023, and six months of 2024, the company's sales of algae oil DHA products accounted for about 91.9%, 92.7%, 94.7%, 93.5% and 96.2% of total revenue, respectively.

According to Frost & Sullivan, China's maternal and child algae oil DHA market can be subdivided into products launched by international and domestic traders. Among them, domestic products can be further divided into products using locally purchased and imported algae oil DHA raw materials. In 2023, domestic brands using imported algae oil DHA raw materials accounted for 28.5% of the total retail value of algae oil DHA products in China, of which the company accounted for about 20.5% in 2023. Based on the total retail value of algae oil DHA products made from imported raw materials, the company is the largest domestic brand. With the success of algae oil DHA products, the company has been marketing other nutritional products such as probiotics, vitamins, multi-nutrients, and algae calcium products.

In the past performance period, the company's best-selling nutritional products were algae oil DHA products. The revenue for FY2021, FY2022, 2023, and 2024 was approximately $0.31 billion, 0.341 billion, 0.404 billion, 0.18 billion yuan and 0.14 billion yuan respectively, accounting for approximately 91.9%, 92.7%, 94.7%, 93.5% and 96.2% of the total revenue for the corresponding year/period, respectively.

During the track record period, the sales volume and sales revenue of the company's algae oil DHA products processed overseas (that is, New Zealand DHA products and American DHA products) were significantly higher than the company's Chinese DHA products. According to Frost & Sullivan, the director believes this highlights consumer behavior, that is, products using imported raw materials are popular among consumers in the Chinese maternal and child nutrition industry.

According to reports, there are currently about 100 businesses in the maternal and child algae oil DHA industry in China, including international and domestic traders that supply the DHA raw materials for algae oil from overseas suppliers and domestic suppliers. As far as Chinese domestic brands make maternal and child algae oil DHA products made from raw materials supplied by overseas suppliers, the market is shared by about 35 businesses, but the number of large-scale players in the market is limited, so it is quite concentrated based on retail sales in FY2023.

Newmans stated in its prospectus that during the performance period, the increase in the company's revenue and gross profit was mainly due to the increase in revenue from the sale of algae oil DHA products. Total gross margin remained relatively stable in fiscal year 2021, fiscal year 2022, fiscal year 2023, six months of 2023 and six months of 2024, at approximately 73.0%, 74.4%, 75.2%, 75.8% and 71.9%, respectively. The company's profit decreased from about 0.12 billion yuan in FY2021 to about 87.522 million yuan in FY2022, mainly due to non-recurring asset incidental losses of about RMB 81.477 million from confirmed sales of milk powder products in fiscal year 2022.