New Stock News | Xinhehua Passes HKEX Hearing, Ranks 2nd in China by 2025 Revenue from Traditional Chinese Medicine Decoction Pieces Products

According to the disclosure by the Hong Kong Stock Exchange on October 25, Sichuan Xinhehua Traditional Chinese Medicine Decoction Pieces Co., Ltd. (referred to as "Xinhehua") has passed the listing hearing for the Main Board of the Hong Kong Stock Exchange, with GF SEC and Agricultural Bank of China International as joint sponsors. According to the prospectus, Xinhehua is a supplier of large-scale traditional Chinese medicine ("TCM") decoction pieces products (i) in China. According to Frost & Sullivan, based on 2025 revenue from TCM decoction pieces products, Xinhehua ranks 2nd in China, occupying a 0.4% market share in a highly competitive market landscape, while the top five market participants collectively hold a 2.7% market share. According to the prospectus, Xinhehua has formulated and implemented stringent standards for TCM production and quality control, and has integrated digital technology into its production and quality control processes. Xinhehua serves a broad range of institutional and retail customersincluding hospitals and medical institutions, medical trading companies, pharmacies, pharmaceutical companies, and more recently individual consumersproviding traditional herbal formulas, health products, and health management services. The company's business covers most provinces in mainland China, as well as Hong Kong and Taiwan, and has expanded overseas to regions with strong demand for TCM, such as Vietnam and Malaysia. TCM is a unique health resource and economic force rooted in Chinese culture, with unique advantages in meeting the health needs of emerging economies worldwide. According to Frost & Sullivan, in China alone, driven by growing health and wellness awareness and the increasing application of digitalization and artificial intelligence, the TCM market reached RMB 426.6 billion in 2025 and is expected to reach RMB 469.2 billion by 2035. As of the latest practicable date, Xinhehua offers more than 770 types and 4,900 varieties of TCM decoction pieces products, covering all major medicinal materials used in the TCM industry. During the track record period, the company primarily served institutional customers including more than 1,000 hospitals and medical institutions and large chain pharmacies through offline channels, as well as small pharmacies, clinics, and operators with its TCM decoction pieces products. In addition, Xinhehua also offers consumer-oriented health products. Furthermore, the company exports TCM health products and conducts business in selected international markets through localized operations. Xinhehua has developed a DNA barcoding system that uses molecular biology technology to identify and authenticate the medicinal material species used in TCM decoction pieces, which has now been adopted by the Chinese and British Pharmacopoeias. In addition to traditional hospital and pharmacy channels, the company also uses digital channels to broaden access to TCM. Xinhehua launched Jinfang Caotang in January 2024, a platform that streamlines the procurement process for more than 7,000 customers. Xinhehua sources some of its raw materials from GAP-certified cultivation bases and adopts automated production lines and supply chain traceability systems to support consistent large-scale production. In terms of financials, the company recorded revenue of approximately RMB 1.146 billion, RMB 1.249 billion, RMB 1.335 billion, and RMB 432 million for the years 2023, 2024, and 2025, and for the four months ended April 30, 2026, respectively. During the same periods, the company recorded total comprehensive income for the year of approximately RMB 104 million, RMB 90 million, RMB 107 million, and RMB 34 million, respectively.