New Stock News | Baoji Yuanhe submits application to the Hong Kong Stock Exchange, ranking first in Hong Kong's traditional Chinese medicine market.

According to the disclosure by the Hong Kong Stock Exchange on July 17th, Baoji Yuanhe (TCM) Limited (referred to as Baoji Yuanhe) has submitted an application for listing on the main board of the Hong Kong Stock Exchange, with Huafu Jianye Enterprise Finance as the exclusive sponsor. Company Overview According to the prospectus, the company is a leading traditional Chinese medicine group headquartered in Hong Kong. It adopts a vertically integrated traditional Chinese medicine business model, focusing on trusted traditional brands. According to a Frost & Sullivan report, based on end-market sales in 2025, the company ranks first in the Hong Kong traditional Chinese medicine market with a market share of 9.2%. The company's business consists of two complementary pillars, namely branded traditional Chinese medicine products and traditional Chinese medicine clinic services, supported by integrated capabilities including brand management, formulation and product development, manufacturing and quality control, as well as sales and distribution. By connecting products, traditional Chinese medicine practitioners, and patients in the traditional Chinese medicine value chain, the company's vertically integrated business model establishes a solid foundation for sustainable development and long-term growth. The company's business is built on a portfolio of well-established traditional household traditional Chinese medicine brands, laying the foundation for its vertically integrated traditional Chinese medicine platform. The company's traditional brands include Baoji Wan with 130 years of history and Tianxi Tang Tianxi Wan with over 120 years of history. According to a Frost & Sullivan report, by 2025, the flagship products of these brands rank first in related therapeutic categories in the Hong Kong traditional Chinese medicine market. The company also owns well-known medicated oil brands Flying Eagle Medicated Oil, Tong Tai Tsung with around 30 years of history and recognized as a Hong Kong brand, and the century-old household brand Ten Ling Oil. The strength of the company's portfolio of branded traditional Chinese medicine products is further consolidated by Hai Tian, one of the first brands of concentrated Chinese medicine granules in Hong Kong. With a comprehensive portfolio of over 700 single and compound concentrated Chinese medicine granule products, the company ranks second in the Hong Kong market for concentrated Chinese medicine granules based on end-market sales in 2025, according to a Frost & Sullivan report. Based on the company's portfolio of branded traditional Chinese medicine products, as of the year ending March 31, 2026, the company has expanded into the traditional Chinese medicine clinic services segment, establishing a vertically integrated traditional Chinese medicine platform. Through its mature clinic brands, Healthful Hall, Jingpei Traditional Chinese Medicine, and Hong Kong Orthopedic and Spinal Specialist Clinic, the company provides a range of internal medicine, orthopedics, acupuncture, and other traditional Chinese medicine consultation and treatment services. As of March 31, 2026, the company operates 40 clinics, with over 50 registered traditional Chinese medicine practitioners primarily providing professional diagnostic services in densely populated areas. According to a Frost & Sullivan report, based on the number of clinics, the company is the fifth-largest private chain of traditional Chinese medicine clinics in Hong Kong as of June 30, 2026, and the largest private chain of orthopedic specialist traditional Chinese medicine clinics. The company believes that integrating its portfolio of branded traditional Chinese medicine products with its clinic network can provide unique insights into the needs of traditional Chinese medicine practitioners and patients, as well as strengthen the development of its brands and interaction with consumers. Financial Data Revenue For the financial years ending March 31, 2024, March 31, 2025, and March 31, 2026, the company achieved revenues of approximately HK$339 million, HK$361 million, and HK$464 million respectively. Profit For the financial years ending March 31, 2024, March 31, 2025, and March 31, 2026, the company's net profit for the year was HK$65.34 million, HK$50.116 million, and HK$80.893 million respectively. Industry Overview The Hong Kong traditional Chinese medicine market has experienced significant growth in recent decades, mainly driven by increased health awareness and favorable government policies. Despite the negative impact of the pandemic from 2020 to 2022, the market has steadily recovered since 2023, and it is expected to grow rapidly in the future due to factors such as support from the 15th Five-Year Plan and the "Development Blueprint for Traditional Chinese Medicine," better professional development and quality management of traditional Chinese medicine products, increased public acceptance and confidence in traditional Chinese medicine, and increased affordability of patient payment for traditional Chinese medicine products through the development of government-funded traditional Chinese medicine clinics and related insurance products. Key Drivers of Growth The main growth drivers of the Hong Kong traditional Chinese medicine market are as follows: Aging population and increasing demand for family healthcare: With the aging population in Hong Kong and increasing health awareness, the demand for self-care and family medicine is expected to increase. Branded traditional Chinese medicine products have advantages in meeting the stable and long-term needs of elderly consumers and health-conscious families due to their retail accessibility, mild therapeutic effects, and household reserve needs. Unique formulations, brand heritage, and value pricing: Traditional Chinese medicine brands benefit from their long operating history, unique formulations, and cross-generational reputation, enhancing consumer confidence in the products' efficacy, safety, and value. Therefore, these brands have a competitive advantage in building stronger consumer loyalty, supporting repeat purchases, and maintaining long-term market resilience. Expansion through cross-border and overseas channels: Hong Kong's free trade environment and connectivity with China enable traditional Chinese medicine products to expand beyond the local market. Specifically, the National Medical Products Administration provides a simplified registration pathway for eligible Hong Kong products that have been approved for local use for over 15 years and are manufactured in compliance with GMP to enter the Chinese market. This creates opportunities for brands with proven local usage history, compliant manufacturing, and solid registration foundations to benefit from early market access. Additionally, overseas expansion further increases influence among overseas Chinese communities and consumers familiar with traditional Chinese medicine culture. Policy-driven standardization and market access: Policy support under the 15th Five-Year Plan and the "Development Blueprint for Traditional Chinese Medicine" is expected to promote the development of the Hong Kong traditional Chinese medicine market. The 15th Five-Year Plan supports the improvement of traditional Chinese medicine quality, integration of medical services, and internationalization, while the "Development Blueprint for Traditional Chinese Medicine" provides more direct support through the implementation of GMP, testing standards, registration support, and cooperation with China. These measures are expected to enhance product acceptance and market access. Board of Directors and Executive Team The company's board of directors consists of nine members, including two executive directors, four non-executive directors (one of whom is the chairman), and three independent non-executive directors. The board members are experienced individuals in their respective professional fields. Shareholding Structure Mr. Kan is the ultimate controlling shareholder of the company. Mr. Kan directly holds approximately 7.96% equity interest in JBM HEALTHCARE and has indirect interests in JBM HEALTHCARE, including (i) holding approximately 39.27% through Lincoln's Hill, which is fully owned by a trust company under Kingshill; (ii) holding approximately 23.95% through his wholly-owned company, Queenshill; and (iii) holding approximately 0.44% through Queenshill Trustco under Queershill Trust. Therefore, after compilation, Mr. Kan, JBM HEALTHCARE, JBMBVI, Lincoln's Hill, trust companies, Kingshill Trust, Queenshill, Queenshill Trustco, and Queenshill Trust will be a group of controlling shareholders. Intermediary Team Exclusive Sponsor: Huafu Jianye Enterprise Finance Limited; Legal Advisors: Norton Rose Fulbright Hong Kong, Judy Tse, and Latham & Watkins; Legal Advisors for Exclusive Sponsors: Ho Wai Solicitors; Auditors and Reporting Accountants: KPMG; Industry Consultants: Frost & Sullivan (Beijing) Consulting Co., Ltd. Shanghai Branch.