IPO News | "TCM Decoction Piece Supplier" New Lotus initiates IPO, plans to list on November 11; minimum subscription lot size is HK$2,552.99

Futu News, October 30:$NEAUTUS (02206.HK)$Announcement released: The IPO subscription period is from October 30 to November 6. The company plans a global offering of approximately 6.5173 million shares and expects to list on November 11.

Company Overview

The company is a major supplier of traditional Chinese medicine (TCM) decoction pieces in China. Based on TCM decoction piece revenue in 2025, the company ranks second in China, holding a 0.4% market share in a highly competitive landscape, while the top five market participants collectively hold a 2.7% market share. The company has established and implemented stringent standards for TCM production and quality control, integrating digital technology into its production and quality control processes.

The company serves a wide range of institutional and retail clients—including hospitals and medical institutions, medical trading companies, pharmacies, pharmaceutical companies, and more recently, individual consumers—by providing traditional herbal preparations, health products, and health management services. Its business covers most provinces in mainland China, as well as Hong Kong, Taiwan, and selected overseas markets such as Vietnam and Malaysia.

Financial Overview

The company's revenue increased from RMB 1,145.6 million in 2023 to RMB 1,334.7 million in 2025, with gross profit rising from RMB 212.0 million to RMB 253.2 million in the same year. Furthermore, the company's revenue grew from RMB 382.8 million in the four months ended April 30, 2025, to RMB 432.2 million in the four months ended April 30, 2026, while gross profit increased from RMB 72.2 million to RMB 94.2 million during the same period.

Use of Proceeds

Regarding the use of proceeds, New Lotus expects the net proceeds from the global offering to be approximately HK$229 million (assuming the over-allotment option is not exercised and based on the mid-point of the offer price range of HK$45.38). According to the prospectus, New Lotus intends to allocate the funds raised from the global offering for the following purposes:

Approximately 33.4% will be used to expand the production capacity of TCM decoction pieces and upgrade the digitalized intelligent production system; approximately 29.0% will be allocated to the Company’s sales and marketing activities, which are expected to commence by the end of 2026 and be completed by the end of 2028; approximately 11.4% will be used for the Company’s consumer-facing business from 2026 to 2028; approximately 10.2% will be utilized to establish overseas sales channels in Vietnam and Malaysia by the end of 2027; approximately 6.0% will be directed toward strategic investments and potential acquisitions, with a focus on the upstream supply chain of TCM; and approximately 10.0% will be reserved for working capital and other general corporate purposes.