Good News on Listing | Frost & Sullivan Assists Jianbimiao Miao Miao (Healthcare) Co., Ltd. to Successfully List in Hong Kong (2161.HK)

Jianbaimiao Miao Miao (Healthcare) Co., Ltd. successfully went public on February 5, 2021, with a global issuance of 44,686,000 shares at HK$1.20 per share, raising approximately HK$53.62 million. Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan') provided exclusive industry advisory services for Jianbaimiao Miao Miao (Healthcare) Co., Ltd.'s listing, and we hereby extend our warmest congratulations on its successful listing.

During the Hong Kong listing process, Frost & Sullivan mainly undertook the following tasks: helping the company accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the company's competitive advantages, assisting the company, investment banks, and other intermediaries in completing relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business, and other important sections), facilitating communication with the Hong Kong Stock Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the company in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.

The overall health and wellness market in China is one of the largest components of its national economy. With the increasing proportion of the elderly population, it is expected that demand for health products will continue to grow. In 2019, the proportion of people aged 65 and above reached 12.6%, and it is projected to reach 16.0% by 2024.

The main future trends of the Hong Kong branded pharmaceutical market are as follows: product customization and increasing popularity, with the market becoming more concentrated, increasing distribution channels, expanding overseas markets and product lines. The Hong Kong pharmaceutical market is divided into four main categories, ranked by market size in 2019 from largest to smallest: (i) branded drugs (PM), (ii) traditional Chinese medicinal materials (TCHM, including concentrated Chinese herbal granules CCMG), (iii) branded Chinese medicines (PCM), (iv) over-the-counter branded drugs (PM OTC). Among them, the largest category, branded drugs, accounted for 54.7% of the market in 2019, while traditional Chinese medicinal materials (including concentrated Chinese herbal granules) accounted for 23.7% of the total market. Brand Chinese medicines and over-the-counter branded drugs each accounted for 10.9% and 10.7% of the entire market, respectively.

In 2019, as an important segment of the over-the-counter (OTC) market, the scale of the Hong Kong PM OTC market will steadily grow from the original HK$2.9 billion to HK$3.3 billion, with a compound annual growth rate of 3.1%. However, the market experienced negative growth in 2020, mainly due to the negative impact of the COVID-19 outbreak on end-sales channels. In the forecast for the next five years, it is expected that the market scale of Hong Kong PM OTC drugs will reach HK$3.6 billion by 2024, with a compound annual growth rate during this period falling to 1.5%.

Brand Chinese medicines (PCM), commonly known as proprietary Chinese medicines, have seen rapid development over the past few decades and have entered a relatively mature stage in Hong Kong. Frost & Sullivan research shows that the market size of Hong Kong brand Chinese medicine products was HK$28 billion in 2015. Driven by factors such as enhanced healthcare awareness and favorable policies for the development of brand Chinese medicines, the market size has expanded steadily to HK$34 billion in 2019, with a compound annual growth rate of 4.7% during this period. However, due to the negative impacts of social unrest in the second half of 2019 and the outbreak of COVID-19 in 2020, market growth slowed down in 2019 and 2020. In the overall forecast for the next five years, the market size of Hong Kong brand Chinese medicine products is expected to reach HK$37 billion by 2024, with a compound annual growth rate falling to 1.9% during the forecast period, mainly due to market saturation, political events, and public health issues since mid-2019.

In 2019, Jianbimiao Miao Miao (Healthcare) Co., Ltd.'s self-developed concentrated traditional Chinese medicine granule brand has always been a leading brand among Hong Kong's traditional Chinese medicine practitioners, selling concentrated traditional Chinese medicine granule products to over 3,000 TCM practitioners, accounting for more than 40% of the total number of active TCM practitioners in Hong Kong in 2019.

Frost & Sullivan research shows that the market size of health products in Hong Kong was HK$10.8 billion in 2015 and grew annually to reach HK$12 billion in 2019, with a compound annual growth rate of 2.7%. However, due to social unrest in the second half of 2019 and the negative impact of the COVID-19 outbreak in 2020, the growth rate of the Hong Kong health market slowed down in 2019 and 2020.

In the future, the market is expected to gradually recover and eventually reach HK$129 billion in 2024, with a compound annual growth rate of 1.5% during the forecast period from 2019 to 2024.

Due to the pursuit of high-quality products, increased awareness of healthcare, and population aging, the demand for overseas medical health products in the Chinese market has increased. With the support of favorable government policy development, the structure and form of cross-border e-commerce channels are becoming increasingly perfect. The Chinese cross-border e-commerce market has rapidly developed into one of the main domestic sales channels and has greatly changed consumer behavior. Compared with the past, cross-border e-commerce is much more regulated and trustworthy. Nowadays, consumers are accustomed to purchasing goods from e-commerce platforms rather than individual sellers. Frost & Sullivan research shows that the total merchandise transaction volume in the cross-border e-commerce market from Hong Kong to the Chinese mainland reached HK$394 billion in 2019, with a compound annual growth rate of 42.7% since 2015. By 2020, affected by the COVID-19 pandemic and border closures, it is expected that the total merchandise value (GMV) of the cross-border e-commerce market will decline significantly. It is estimated that by 2024, the total transaction volume between Hong Kong and China's cross-border e-commerce market will reach HK$1462 billion, with a compound annual growth rate of 30.0% since 2019.

Frost & Sullivan, integrating nearly 60 years of global consulting experience, has been serving the booming Chinese market with dedication for 23 years. With a global perspective, it helps clients accelerate their business growth, achieving industry growth, innovation, and leading benchmarks. The healthcare industry is one of the core areas of focus for Frost & Sullivan. Over the past sixteen years, the Frost & Sullivan healthcare team has provided financing and financial advisory, IPO industry advisory, strategic consulting, management consulting, and other services to hundreds of outstanding domestic and international biopharmaceuticals, medical devices, healthcare services, and internet healthcare companies. Successful listings include: Rui Li Medical Beauty (2135.HK), Jiake Si Pharmaceutical (1167.HK), Hepalink Biopharmaceuticals (2142.HK), JD Health (6618.HK), Deqi Pharmaceutical (6996.HK), Rongchang Biotech (9995.HK), WuXi AppTec (2126.HK), Sino Biologics (2096.HK), Yunding Newray (1952.HK), Zai Ding Pharmaceutical (9688.HK), Okevitek (1477.HK), Yongtai Biotech (6978.HK), Hapre Biotech (9989.HK), Kechuang Pharmaceutical (9939.HK), Piaojia Medical (9996.HK), Kangfang Biotech (9926.HK), Oncogene (9969.HK), Tianjing Biotech (IMAB.NASDAQ), Kanglong Chemical (3759.HK), China Antibody (3681.HK), Dongyao Pharmaceutical (1875.HK), Yasheng Pharmaceutical (6855.HK), Fosun Pharma (2696.HK), Hansoh Pharmaceutical (3692.HK), Mabtech (2181.HK), Founder Holdings (1521.HK), Via Biotech (1873.HK), CStone Pharmaceuticals (2616.HK), Junshi Biosciences (1877.HK), WuXi AppTec (2359.HK), Innovent Biologics (1801.HK), Hailun Biotech (2552.HK), BeiGene (6160.HK), Gilead Sciences (1672.HK), WuXi Biologics (2269.HK), China Resources Pharmaceutical (3320.HK), Yakult Biopharmaceuticals (2633.HK), HCMNasdaq Hehuang China Medicine (HCM.NASDAQ), Kingsun Biotech (1548.HK), BBI Life Sciences (1035.HK), and others. In terms of the number of filings, the Frost & Sullivan healthcare team maintains an absolute leading position in Hong Kong's healthcare IPO market, continuously occupying more than 90% of the market share from 2018 to 2020.

Since the listing of the first batch of companies on the Sci-tech Innovation Board (STAR Market) in July 2019, Frost & Sullivan reports have been widely cited in the prospectuses of leading STAR Market-listed companies in the industry, including: Huaxi Biotech (688363.SH), Junshi Biosciences (688180.SH), Zhejiang Genomics & Biotechnology Co., Ltd. (688266.SH), Bio-Thera (688177.SH), and Shenzhou Cells (688520.SH). It is considered one of the most powerful, professional, and influential industry research institutions in the sector. We hope to work with enterprises to understand industry trends, seize development opportunities, jointly promote innovation and upgrading of China's healthcare industry, and build a healthy future.