New Lotus (02206) to open IPO subscription from October 30 to November 6, plans global offering of 6.5173 million H shares

New Lotus (02206) is conducting an IPO subscription from October 30, 2026 to November 6, 2026, planning a global offering of 6.5173 million H shares, of which approximately 10% will be offered in Hong Kong and approximately 90% internationally; the offer price is HK$40.2-50.55 per share, with a board lot of 50 H shares, and the H shares are expected to commence trading on the Stock Exchange at 9:00 a.m. on November 11, 2026 (Wednesday). The Group is a large supplier of traditional Chinese medicine decoction pieces products in China. Based on 2025 revenue from traditional Chinese medicine decoction pieces products, the Group ranked 2nd in China, holding a 0.4% market share in a highly competitive market landscape, while the top five market participants collectively held a 2.7% market share. The Group has established and implemented stringent standards for traditional Chinese medicine production and quality control, and has integrated digital technology into its production and quality control processes. The Group 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 preparations, health products and health management services. The Group's business covers most provinces in mainland China, as well as Hong Kong, Taiwan and selected overseas markets such as Vietnam and Malaysia. After deducting underwriting commissions, fees and estimated expenses payable by the Group in connection with the global offering, and assuming an offer price of HK$45.38 (being the midpoint of the indicative offer price range stated in this prospectus), the Group estimates that it will receive net proceeds from the global offering of approximately HK$230 million. Assuming an offer price at the midpoint of the indicative offer price range, the Group intends to apply the following amounts of the global offering proceeds for the following purposes: (1) approximately 33.4% will be used to expand the production capacity of traditional Chinese medicine decoction pieces and upgrade the digital intelligent production system. (2) approximately 29.0% will be used for the Group's sales and marketing activities, expected to commence by the end of 2026 and be completed by the end of 2028. (3) approximately 11.4% will be used for the Group's consumer-facing business from 2026 to 2028. (4) approximately 10.2% will be used by the end of 2027 to establish overseas sales channels in Vietnam and Malaysia. (5) approximately 6.0% will be used for strategic investments and potential acquisitions, with a focus on the upstream supply chain of traditional Chinese medicine. (6) approximately 10.0% will be used for working capital and other general corporate purposes. During the track record period, the Group's revenue increased from RMB1.146 billion in 2023 to RMB1.335 billion in 2025, and gross profit increased from RMB212 million to RMB253 million over the same period. In addition, the Group's revenue increased from RMB383 million for the four months ended April 30, 2025 to RMB432 million for the four months ended April 30, 2026, and gross profit increased from RMB72.2 million to RMB94.2 million over the same period.