Yipin Group's Second IPO Attempt: Growth Slowdown, Category Dependence, and Quality Concerns – The Listing Dilemma of the Second-Largest Goat Milk Powder Brand

$Yeeper Nutrition Technology (Qingdao) Group Co., Ltd. (810873.HK)$

On April 12, 2026, Yipin Nutrition Technology (Qingdao) Group Co., Ltd. (hereinafter referred to as Yipin Group) submitted its prospectus to the Hong Kong Stock Exchange once again, aiming for the title of 'China’s First Goat Milk Powder Stock.'

Yipin Group first submitted its listing application to the Hong Kong Stock Exchange on August 31, 2025. On October 24 of the same year, the International Department of the China Securities Regulatory Commission issued supplementary material requirements for overseas issuance and listing registration, explicitly requesting Yipin Group to explain the specific circumstances of developing and operating apps, mini-programs, public accounts, and other products by the company and its subsidiaries, as well as whether they involve the collection and use of personal information.

Two months after the previous application lapsed, the company resubmitted its filing. However, the latest prospectus revealed financial and operational data that could not hide multiple risks such as weak growth, declining core business profits, reliance on a single product category, high inventory levels, weak R&D, and historical quality issues.

Growth has completely stalled, with net profits from core operations experiencing a substantial decline.

According to the prospectus and Tianyancha data, the history of Ypin Group dates back to 1956, boasting 70 years of professional dairy production experience. The company has evolved into a full industrial chain Chinese nutrition group integrating 'pasture farming, product development, processing and production, laboratory testing, retail sales, and customer service.' It focuses on goat milk powder and Foods for Special Medical Purposes (FSMP), offering highly nutritious, easily digestible, and low-allergenic dietary solutions for consumers of all age groups, especially those prone to allergies, lactose intolerance, or poor digestion.

In terms of financial performance over the past three years, Ypin Group shows a clear trend of 'growth blunting,' with underlying micro-growth masking a substantive decline in core profitability. From 2023 to 2025 (reporting period), the company generated revenues of 1.614 billion yuan, 1.762 billion yuan, and 1.864 billion yuan respectively, with year-on-year growth rates falling from 9.2% to 5.8%, indicating a continuous weakening of growth momentum. Net profits during the same period were 168 million yuan, 172 million yuan, and 183 million yuan, with annual increases of 2.38% and 6.4%. Excluding book gains from fair value adjustments of biological assets, the adjusted net profit for 2025 was only 167 million yuan, reflecting a 2.9% year-on-year decrease, which means that core business profits have actually entered negative growth territory, showing insufficient 'profit quality.'

More alarmingly, in the first half of 2025, the company's revenue totaled just 806 million yuan, marking a 10.4% year-on-year decline; net profit was 56.688 million yuan, plummeting by 42.6% year-on-year, nearly halving its performance.

By product segment, Ypin Group’s portfolio includes infant formula goat milk powder, FSMP, infant formula cow milk powder, as well as children's and adult formula milk powders.

The company’s operational risks are highly concentrated around the fatal weakness of a single-product structure, with its core pillar—infant formula goat milk powder—already showing signs of decline. During the reporting period, revenue from this product line was 926 million yuan, 1.033 billion yuan, and 1.009 billion yuan respectively, accounting for 57.4%, 58.6%, and 54.2% of total revenue, indicating that the primary growth curve has peaked prematurely.

Ypin Nutrition’s FSMP products demonstrated the most significant revenue growth, generating 130 million yuan, 219 million yuan, and 339 million yuan from 2023 to 2025, representing 8.1%, 12.4%, and 18.2% of total revenue respectively. Additionally, FSMP is the company’s highest-margin product, with gross profits reaching 98.201 million yuan, 166 million yuan, and 253 million yuan during the reporting period, and corresponding gross margins of 75.3%, 76.1%, and 74.7%.

It is worth noting that Ypin Group's OEM (contract manufacturing) and dairy-related materials businesses have experienced fluctuations in revenue and share. Revenue figures were 291 million yuan, 248 million yuan, and 264 million yuan, with shares of 18%, 14.1%, and 14.2% respectively. However, the gross margin of this segment declined significantly, dropping from 25.6% in 2023 to 10.6% in 2024, and further to 6.7% in 2025.

In terms of retail sales, the company ranked second in China’s goat milk powder market in 2024 with a 14% market share. Its market share in the infant formula goat milk powder segment reached 17.6%, but there remains a significant gap compared to leading brands holding over 30% market share. The industry landscape is highly consolidated, leaving limited room for further growth.

Moreover, the goat milk powder industry has shifted from incremental competition to stock competition, with the CR5 (market concentration of the top five companies) exceeding 60%. Foreign brands, along with domestic giants like Yili, Feihe, and Mengniu, have fully entered the market, intensifying price wars. Although Ypin has expanded into FSMP as a secondary growth driver, its scale remains small and insufficient to offset the impact of declining goat milk powder sales.

More critically, the overall demand in the industry is being deeply suppressed by a population crisis: China’s birth population in 2025 was only 7.92 million, a historic low. The group of infants aged 0-3 continues to shrink, and the total market size for infant formula has entered a 'declining era.' Even the niche goat milk powder sector cannot remain unscathed.

It is still fresh in the memory of outsiders that as early as June 2022, Yipin Group held an IPO strategy seminar. Actual controller Shanbo Mu introduced the company's listing plans and equity incentive schemes to brokers and investors, stating that the company's revenue would reach 3 billion yuan within two years and strive to achieve an income target of 3 to 5 billion yuan within 3 to 5 years.

Clearly, while the progress of the IPO has been slow, the company's revenue has not yet broken through the 2 billion yuan mark, posing significant challenges to its growth potential.

High inventory and slow turnover, upstream reliance adds cost pressure

In terms of costs, the company is highly dependent on upstream raw materials. During the reporting period, the company's raw material costs were 543 million yuan, 584 million yuan, and 618 million yuan respectively, accounting for more than 66% of the cost of sales, with this proportion reaching 65.9% in the first half of 2025. The core ingredient, goat whey powder, mainly relies on imports, with prices and supply significantly affected by international markets, logistics, and trade policies. Fluctuations in raw material prices will directly squeeze profit margins.

Accompanying the loss of growth momentum is the continuous deterioration of Yipin Group's operational capabilities, with inventory and supply chain risks particularly prominent. Low inventory operation efficiency has become a significant operational weakness that Yipin Group cannot ignore. Prospectus data shows that during the reporting period, the company's inventory book balances were 719 million yuan, 788 million yuan, and 779 million yuan respectively, consistently remaining at a high level.

Regarding inventory turnover efficiency, the company's inventory days for 2023 to 2025 were 296 days, 307 days, and 304 days respectively, consistently hovering around 300 days. In the first half of 2025, it even climbed to 361 days, far higher than comparable companies in the industry—compared to Feihe China’s approximately 110 to 130 days and Mengniu Dairy’s roughly 40 days of inventory turnover.

Market observers believe that the state of high inventory and slow turnover not only ties up a large amount of the company's working capital but also significantly increases the risk of product expiration, overstock obsolescence, and markdown impairment. Coupled with the strict requirements for shelf life and freshness in infant formula products, this further exacerbates inventory management pressures. Meanwhile, raw material costs account for more than 66% of operating costs year-round, with fluctuations in raw material prices and inventory impairment risks compounding each other, continuously squeezing profit margins and testing the company’s supply chain management and operational stability.

In terms of technology and quality control, Yipin Group's R&D investment is severely lacking. During the reporting period, the company's R&D expenses were only 8.418 million yuan, 8.014 million yuan, and 11.024 million yuan respectively, with expense ratios all below 1%, far lower than the 3%-5% levels of international giants, seriously misaligned with the company's positioning as a 'nutritional technology' firm. Weak R&D leads to serious product homogenization, making it difficult to build core barriers such as formulas and processes, leaving the company at a disadvantage in the industry’s competition of 'formula innovation and quality comparison.'

At the same time, the company’s selling expenses remain persistently high. During the reporting period, sales and distribution expenses were 371 million yuan, 432 million yuan, and 507 million yuan respectively, rising from 23.00% to 27.2% of revenue. Service fees continued to increase, exceeding a cumulative 490 million yuan over three years, reflecting low marketing investment efficiency.

The financial structure also harbors hidden concerns. By the end of 2025, the company's cash and equivalents amounted to 472 million yuan, while short-term borrowings reached 502 million yuan, resulting in a cash-to-short-debt ratio of only 0.94, indicating a funding gap. The pressures of debt repayment and liquidity are becoming increasingly evident.

The challenges faced by Yipin Group are a microcosm of the entire infant formula industry. The population crisis has become the biggest negative factor for the industry: the birth rate continues to plummet, the number of newborns has hit a historic low, the core consumer group is shrinking, and the market has completely shifted from 'incremental expansion' to 'intense competition for existing customers.' In terms of competitive landscape, foreign brands dominate the high-end market with their R&D and brand advantages, while domestic giants like Yili and Feihe leverage their financial strength and channel advantages to fully penetrate the lower-tier markets. Price wars in the goat milk powder sector have intensified, continuously squeezing the survival space of smaller brands.

Regulatory oversight is also tightening, with stricter implementation of the formula registration system, new national standards, and special medical food regulations. The rising industry thresholds and compliance costs are accelerating the exit of smaller brands. Consumers are increasingly demanding higher quality, safety, and better formulations in infant formula. Brand trust and repeat purchase rates have become key competitive factors, yet Yipin lacks significant advantages in R&D, quality control, and branding, making it difficult to align with the trend of consumption upgrading.

In this IPO, Yipin Group plans to allocate funds across six key areas: First, increase R&D investment to continuously upgrade product formulations and core technologies, with a focus on innovating and clinically validating formulations for goat milk powder and special medical purpose formula foods (FSMP), solidifying its low-allergenicity and easy-to-digest product advantages; second, advance upgrades throughout the entire supply chain and promote smart manufacturing, expand production capacity, optimize production processes, enhance supply chain efficiency and quality control, ensuring stable supply of core raw materials; third, invest in brand building and marketing, strengthen consumer education and brand awareness, accelerate channel penetration and market expansion; fourth, support overseas market expansion, establish and deepen operations in key international markets such as South Korea and Spain, and improve the global production and sales network; fifth, enhance digital infrastructure, upgrade core business systems, and drive digital transformation in the supply chain, channels, and operational management; sixth, reserve part of the funds for daily working capital and other general corporate purposes to ensure stable operations and the execution of medium- to long-term strategies.

At the equity structure and corporate governance levels, Yipin Group exhibits highly concentrated family ownership characteristics, with notable internal control and decision-making risks. Chairman and controlling shareholder Mou Shanbo holds a combined 75.11% stake through platforms such as Kangwang Investment and Qiwang Investment, forming a dominant shareholding structure.

The company implemented substantial dividend distributions before its IPO. In February 2023, Yipin Group announced a dividend of 211 million yuan; in March 2023, an additional dividend of 38.1 million yuan was declared; in January 2025, the company announced another dividend of 30 million yuan, bringing the total dividend amount to 279 million yuan. Based on Mou Shanbo's actual beneficial ownership of approximately 67.73%, he received cumulative dividends of about 189 million yuan.

Additionally, the company has repeatedly been reported for issues such as foreign objects found in its milk powder and non-compliance in production processes. Coupled with the historical trust deficit in domestically produced infant formula, any new quality incident could trigger a chain reaction of brand collapse and plummeting sales. Quality and safety remain the company’s Achilles’ heel, with recurring historical problems. In March 2024, the National Administration for Market Regulation issued a notice regarding excessive taurine content in Baoan Su Special Medical Formula Milk Powder under Yipin’s portfolio. Subsidiary Beian Yipin Nuca Dairy was fined 463,500 yuan and had its illegal earnings confiscated.

From a compliance perspective, Yipin Group faces evident regulatory shortcomings in labor practices, property rights, and production operations, with weak internal controls, continually facing penalties and rectification pressures. The prospectus reveals that the company failed to fully contribute to social insurance and housing funds for some employees, with some not enrolled at all, violating labor laws. During the reporting period, several subsidiaries exceeded the legal 10% cap on dispatched labor, though rectified by converting workers to full-time status, ongoing compliance stability remains a concern.

Meanwhile, some self-owned properties located in Heilongjiang were constructed without obtaining construction planning permits, mainly used for warehousing, offices, and auxiliary production. Although no administrative penalties have been imposed so far, there remains the risk of being ordered to demolish or fined, potentially impacting normal business operations. Additionally, the company faces compliance issues related to leased property registration and land use. Combined with previous regulatory notices for non-compliant labeling of special medical foods, the overall compliance framework has gaps. If supervision tightens further, associated rectification costs and penalty risks may further erode the company’s profits. (Produced by Harbor Finance)

Harbor Business Observer, Xiao Xiuni

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