A-share subscription | Zhongcaoxiangliao (920016.BJ) starts subscription and establishes stable cooperation with the world's top ten flavor and fragrance companies such as Dezhixin and Qihuadun.

On September 3rd, Zhongcao Fragrance (920016.BJ) began its initial public offering at a price of 7.50 yuan per share, with a subscription limit of 710,100 shares and a P/E ratio of 14.93 times. It is listed on the Beijing Stock Exchange, with Minsheng Securities as the sponsor and lead underwriter. The prospectus shows that Zhongcao Fragrance focuses on the research, production, and sale of flavors and fragrances. The company's main products include cooling agents, synthetic flavors, and natural flavors. The cooling agent products mainly include WS-23, WS-3, and menthyl lactate, while synthetic flavors include diethyl butyrate and ethyl butanoate, and natural flavors include elemi oil, garlic oil, ginger oil, and orange oil. The company's products are applicable in the food and beverage, daily chemical, tobacco, and pharmaceutical industries, with a wide range of downstream applications and development space. Zhongcao Fragrance is a national high-tech enterprise and a specialized and new small and medium-sized enterprise in Anhui Province. It has a provincially certified enterprise technology center, an Anhui Province natural flavor extraction engineering technology research center, a post-doctoral research workstation (post-doctoral innovation practice base), and has been awarded honors such as "Provincial Agricultural Industrialization Leading Enterprise", "Anhui Top Ten Excellent Brand Enterprises", Anhui Provincial Enterprise R&D Center, "Anhui Provincial Patent Excellence Award," "Anhui Provincial Labor Security Integrity Demonstration Unit," and "Food Safety Anhui Brand". Additionally, the company's main product N,2,3-Trimethyl-2-isopropyl butanamide (WS-23) has won the title of "Anhui Industrial Fine Product". As of the date of the prospectus signing, the company holds 10 invention patents and 5 design patents. Zhongcao Fragrance has always emphasized product quality and brand reputation, strictly implementing product quality and environmental management control. The company has passed ISO9001:2005 quality management system certification, ISO14001:2015 environmental management system certification, ISO22000:2018 certification, kosher certification, FSSC22000 certification, HALAL certification, EU REACH registration, and US FDA certification. With over ten years of technological accumulation and market development, the company has accumulated high-quality and stable customer channels and resources, establishing stable cooperative relationships with global top ten flavor and fragrance companies such as Firmenich and Givaudan. Financially, in 2021, 2022, and 2023, Zhongcao Fragrance achieved operating revenues of approximately 150 million yuan, 189 million yuan, and 206 million yuan respectively, with net profits of approximately 23.0751 million yuan, 37.7125 million yuan, and 41.0359 million yuan during the same periods. It is worth noting that Zhongcao Fragrance mentioned in the prospectus the existence of risks related to fluctuations in the prices of primary raw materials. In 2021-2023, the proportion of direct materials in the company's main operating costs was 88.21%, 86.82%, and 86.39% respectively. Direct materials account for a large proportion of the main operating costs. The raw materials for fragrance production mainly come from fragrance plants or basic chemical products. Fragrance plants are easily affected by natural climate and uneven annual output, leading to unstable supply and prices of raw materials. Basic chemical products are influenced by factors such as fluctuations in crude oil prices, resulting in fluctuations in the company's procurement prices for raw materials during the reporting period. If there are significant fluctuations in raw material prices in the future, it will affect the company's production costs, increase inventory management difficulties, and subsequently impact the company's profitabilty.