Ping An Biomedical Co (PASW) Registration Filing summary

Company overview and business model

• Operates as a holding company in the Cayman Islands, with all operations conducted through a PRC subsidiary focused on apparel supply chain management (SCM).

• Provides end-to-end SCM services for yarns, textiles, and finished garments, including design, sourcing, production, and logistics.

• Vertically integrated, asset-light model leveraging third-party suppliers and contract manufacturers.

• Customer base includes brand owners, textile manufacturers, sourcing agents, and online retailers, primarily in China.

• No long-term contracts with customers or suppliers; business is order-driven and subject to market demand fluctuations.

Financial performance and metrics

• Revenue for the year ended September 30, 2023: RMB 82.6 million (US$11.3 million), down 27.9% from prior year due to lower yarn sales.

• Gross profit for FY2023: RMB 4.2 million (US$0.58 million), gross margin 5.1%, down from 12.3% in FY2022.

• Net loss for FY2023: RMB 0.99 million (US$0.14 million), compared to net income of RMB 7.2 million in FY2022.

• For the six months ended March 31, 2024: revenue increased 42.8% YoY to RMB 45.7 million (US$6.3 million); net income RMB 0.24 million (US$0.03 million).

• As of March 31, 2024: working capital deficit of RMB 4.9 million (US$0.68 million); cash and equivalents of RMB 0.97 million (US$0.13 million).

• High customer and vendor concentration: top five customers accounted for 91% of revenue in the latest period; top five suppliers accounted for 94% of COGS.

Use of proceeds and capital allocation

• Net proceeds from IPO (estimated $8.86 million) to be allocated: 20% for raw material procurement, 20% for customer acquisition and marketing, 20% for efficiency and SCM capability enhancements, 10% for sustainable/eco-friendly materials, 30% for general working capital.

• No proceeds from shares sold by selling shareholders.