On October 31, the official website of the Hong Kong Stock Exchange showed that Meihao Medical Group Co., Ltd. (hereinafter referred to as "Meihao Medical") submitted a prospectus to impact the listing of Hong Kong stocks, with Chuangsheng Capital and Guojin Securities (Hong Kong) Limited acting as joint sponsors.
The New Economy Observation Group found that this Meihao Medical is actually the "Chinese mouth" that has hit Hong Kong stocks six times before. In February 2020, August 2020, February 2021, September 2021, March 2022 and May 2022, China Stomatological Medical Group (hereinafter referred to as "China Stomatology") has submitted the form six times. However, because it is in Wenzhou, the name is too "coaxing" and is frequently questioned by the market. Now, this time in the name of "Meihao Medical", perhaps to weaken the influence of the name, but it is its seventh impact on the listing.
According to the prospectus, Meihao Medical's revenue mainly comes from providing comprehensive dental services to individuals, mainly covering four dental fields: comprehensive oral treatment, prosthodontics, implant dentistry and orthodontics. According to the Frost & Sullivan report, in terms of revenue in 2021, Meihao Medical is the largest private dental service provider in Wenzhou, with a market share of about 25.2% in the private and entire dental service market in Wenzhou (exceeding the total market share of the second to fifth largest private dental service providers in Wenzhou in 2021) and 13.2% respectively.
From 2019 to 2021 and the first five months of 2022, Meihao Medical realized revenue of about 83 million yuan, 85 million yuan, 105 million yuan and 47 million yuan respectively, and the gross profit ratio in the same period was 45 million yuan, 51 million yuan, 67 million yuan and 27 million yuan, and the gross profit margin was 54.4%, 59.9%, 63.6% and 57.4% respectively.
Profit for the year was $15 million, $15 million, $32 million and $08.5 million respectively. During the same period, the adjusted net profit for the year was 23 million yuan and 0. $2.6 billion, $34 million and $11 million, with adjusted net profit rates of 27.6%, 30.4%, 32.7% and 24.5% respectively.
According to the prospectus, one of the reasons for the increase in revenue is the positive impact of increased marketing and promotion efforts (including but not limited to providing free services such as examination, diagnosis, and scaling of teeth) in the fourth quarter of 2020.
Suppliers should include suppliers of pharmaceuticals, medical consumables, customized products and dental tools. The total procurement of the five major suppliers of Meihao Medical during the reporting period was about 5.8 million yuan, 5 million yuan, 5.8 million yuan and 3.6 million yuan respectively, accounting for 50.1%, 45.5%, 47.5% and 62.2% of the total procurement in the same period. Among them, the largest suppliers purchased large bags of MOP2.2 million, MOP2.3 million, MOP2.3 million and MOP1.3 million in each period, accounting for about 19.2%, 20.5%, 18.7% and 22.6% of the total procurement during the period.
In terms of shareholding structure, the company is 75%, 10%, 10% and 5% owned by JTC BVI, Ricon BVI, Meihao BVI and HDS BVI. JTC BVI and Ricon BVI are directly wholly owned by the company's founder Wang Xiaomin, while Meihao BVI is directly wholly owned by Zheng Man. And Wang Xiaomin and Zheng Man are husband and wife. The HDS BVI is wholly owned by Cheng Ying.
As a dental enterprise in Wenzhou, Meihao Medical has Wenzhou Hospital, Longgang Hospital, Lucheng Children's Hospital, Wenzhou Stomatology, Lucheng Hospital, Wenzhou Children's Hospital and other institutions. In the prospectus, the company highlighted the risk of "a corner of safety". The company said it was and will remain largely dependent on its Wenzhou business for earnings. Therefore, the company is extremely sensitive to local conditions and changes in Wenzhou (such as economy, laws and regulations, and the occurrence of any natural disasters, natural disasters and epidemics).
In addition, Meihao Medical has also suffered losses due to dividends. According to the prospectus, the cumulative loss on January 12, 2020 was $6.2 million, due to the fact that 2019 was regarded as a distribution to shareholders at that time and the dividend of $32 million was declared in 2019. On December 31, 2020, the company's cumulative loss further expanded to 8.1 million yuan, one of the reasons was to pay 24.9 million yuan to 95% of the shareholders of Dehong Medical during the year-end settlement and restructuring process.
It is worth noting that Meihao Medical also staged the incident of "left-hand dividends and right-hand borrowing". The company recorded current liabilities of $5.6 million at the end of 2019 due to the declaration of dividends of $32 million and the distribution of $35.9 million to the controlling shareholders at the time. A dividend of $32 million has been paid at the end of 2020.
The company explained that the 2019 dividend declaration took into account the documented financial performance and cash flow for the full year 2018 and the half year of 2019, but did not anticipate the outbreak of the new crown epidemic after the beginning of 2020, and did not take into account the impact of the epidemic on operations and finances. In order to strengthen the company's financial position, Wang Xiaomin signed a loan agreement with the company on August 18, 2020, lending 8.45 million yuan to the company's shareholders without interest.
In March 2020, the company obtained a personal loan of 25 million yuan from a natural person with an annual interest rate of 4.25% for 18 months, which was treated as a current liability at the end of 2020 and fully settled in September 2021.
Enterprise investigation shows that Wenzhou Dental Hospital Co., Ltd., a subsidiary of Meihao Medical, has been fined many times. On May 25, 2022, during the sprint listing period, the company was fined 35,000 yuan by the Wenzhou Fire and Rescue Detachment due to the paralysis of the hydrant system and unusable use. At the end of 2015, it was also judged to be unqualified and fined 20,000 yuan by the Wenzhou Market Supervision Bureau because the disposable oral instrument box inspection sterility project used in business did not meet the technical requirements of the product.