On November 13, 2024, Shubao International Group Ltd, based in Jinjiang, Quanzhou, Fujian, submitted an IPO prospectus to the Hong Kong Stock Exchange, intending to list on the main board in Hong Kong. This is a reapplication following its previous submission on May 10, 2024, which was rendered ineffective.

Shubao International IPO prospectus link:

https://www1.hkexnews.hk/app/sehk/2024/106909/documents/sehk24111301498_c.pdf

Main Business

Founded in 2010, Shubao International mainly engages in the development, production, and sales of personal disposable sanitary products in China, focusing on infant and toddler care products in emerging markets across the Eurasian continent. Shubao International vertically integrates its production business, covering all core product category development, non-woven fabric production, raw material procurement, production, quality control, warehousing, and logistics management, emphasizing a direct-to-consumer (D2C) sales model, leveraging multiple third-party pure digital platforms in China to directly market and sell branded products to end consumers.

While expanding its D2C branded product business in China, Shubao International's overseas contract manufacturing business is also continuously growing, exporting the company's core infant and toddler care products to foreign brand owners, bringing their respective brands to the emerging markets in the Eurasian continent, such as Russia, Southeast Asia, and Kazakhstan. According to a Frost & Sullivan report, in terms of export value in 2023, it is the second-largest exporter of disposable infant and toddler care products from China to Russia, with a market share of 3.7%.

In addition to producing, marketing, and selling its own branded products, Shubao International also acts as an ODM, producing and selling infant and toddler care products for corporate clients (primarily independent retailers and diaper brand owners).

Shubao International's core product range includes infant and toddler care, female care, and adult incontinence.

• Infant and toddler care products mainly include training pants and diapers, followed by wet wipes. The company offers a range of affordable to high-end diapers, suitable for premature infants to older toddlers. The training pants, designed like small underwear, are absorbent materials used for toilet training, swimming, and other activities during early childhood. As of May 31, 2024, there are about six categories, comprising over 140 SKUs, featuring various vivid character designs, covering seven main sizes from newborn to XXXL. The company primarily promotes and sells branded infant and toddler care products under its own brand "BabyComfort."

• Women's care products, such as period pants and wipes, are mainly marketed and sold in china under its own brand "May Whisper," with approximately 20 SKUs as of May 31, 2024.

• Adult incontinence products, specifically designed for the elderly, provide management for mild, moderate, and severe incontinence, including diapers, pull-up pants, and wipes, mainly marketed and sold in china under its own brand "ComfortCare," with about 15 SKUs as of May 31, 2024.

The company's flagship infant and toddler care brand "BabyComfort" has been recognized as a "Fujian Famous Brand Product" by the Fujian Provincial People's Government in 2016. BabyComfort was also evaluated as one of the top ten companies in the china diaper industry by the Paper Products Professional Committee of the China National Paper Association in 2018. Furthermore, the company is among the main drafting units for the current applicable national standards for disposable baby diapers revised in 2021.

Shareholder Structure

The prospectus shows the shareholder structure of BabyComfort before its listing.

Mr. Yan Peikun holds 90% of the shares through Softo BVI, Wish BVI, and Wish BVI at 58.95%, 16.00%, and 15.05% respectively.

Mr. Zeng Guodong holds 10% of the shares through Aspiring BVI and Ambition BVI at 6.05% and 3.95% respectively.

Board of directors and executives

The board of directors of Yingshuba consists of 8 directors, including:

• 4 executive directors: Mr. Yan Peikun (Chairman), Mr. Zeng Guodong (CEO), Mr. Zhou Jiahao (Director of Production), Mr. Gao Yue (Assistant to the Chairman, Director of Purchasing);

• 1 non-executive director: Mr. Cai Hao (Executive Vice President of Panpan Foods Investment Department).

• 3 independent non-executive directors: Ms. Liang Jiaying, Mr. Huang Dawei, Mr. Wu Kangzheng.

In addition to executive directors, the executives include Vice President Ms. Yan Jiwei, Manager of R&D Department Mr. Jiang Shukun, Manager of Warehousing and Logistics Department Mr. Zhan Guoqiang.

* Yan Peikun is the father of Yan Jiwei, father-in-law of Zhou Jiahao, and uncle of Gao Yue;

* Zhou Jiahao is the son-in-law of Yan Peikun, brother-in-law of Yan Jiwei, and cousin of Gao Yue;

* Gao Yue is the cousin of Yan Peikun, and the cousin of Zhou Jiahao and Yan Jiawei;

* Yan Jiawei is the daughter of Yan Peikun, the sister-in-law of Zhou Jiahao, and the cousin of Gao Yue.

Corporate Performance

The prospectus shows that in the past years of 2021, 2022, 2023, and the first five months of 2024, the revenue of Baby Comfort was RMB 0.263 billion, 0.408 billion, 0.655 billion, and 281 million yuan respectively, while the corresponding net income was RMB 10.221 million, 40.791 million, 57.249 million, and 18.995 million yuan.

Intermediary Team

The main intermediaries for this IPO include: Rijing Capital as its exclusive sponsor; Furi Maize (formerly Zhongshen Zhonghuan) as its auditor; Tianyuan and Morgan Lewis as its legal counsel for China and Hong Kong; Tongshang and King & Wood as its legal counsel for brokerage in China and Hong Kong; Hongzhan International as its property appraiser; and Frost & Sullivan as its industry consultant.