Over 90% of its revenue depends on Watsons! Zhengpin Holdings, which paid dividends of HK$61.7 million before going public, makes a comeback on the Hong Kong stock market | Hong E Voice

Source | Times Business Research Institute

Author | Intern Yang Junwei

Editor | Zheng Lin

On March 9, 2026, Herb Standard Holdings Limited, a company focused on the Hong Kong health and beauty supplement market, officially submitted an application for listing on the Main Board of the Hong Kong Stock Exchange. This marks the company’s second attempt after its initial submission in July 2025. The sole sponsor is Hongbo Capital Limited.

According to the prospectus, Herb Standard Holdings is a Hong Kong-based, asset-light distributor of health and beauty supplements. It operates under a model of “independent R&D + third-party manufacturing + core channel distribution,” building a complete product matrix that complements its own brands with third-party brands. The company owns six proprietary brands: Zhengpin, Yan Tong Xiao, Organicpharm, RiYaoTang, VRegen, and Profix. It also distributes products from six third-party brands, including Lu Brand and Taihe Cave. Its product lines cover basic nutritional supplements, joint pain care, organic herbal health products, traditional Chinese medicine conditioning, and gut health, catering to diverse consumer health needs.

In terms of sales channels, the company mainly relies on large local retail chains in Hong Kong, establishing a deep, long-term partnership with Mannings. Its products are available in all Mannings stores in Hong Kong and are a core supplier of health and beauty supplements within Mannings’ distribution network.

According to data from Frost & Sullivan, based on the retail value of health and beauty supplements in Hong Kong in 2024, Herb Standard Holdings holds a 1.6% market share, ranking seventh in the industry. Its core proprietary brand Yan Tong Xiao has gained a strong reputation and channel advantages, making it one of the top five best-selling joint and pain supplements in Mannings retail outlets in 2024. The company’s key growth product related to deer is the top retail value in 2024, with approximately 29.4% market share. Currently, proprietary brands contribute over 80% of total revenue, serving as the main driver of sustained growth.

Financial data shows that Herb Standard Holdings has maintained rapid growth over the past three fiscal years. In fiscal years 2023–2025, revenue was HKD 43.19 million, HKD 110 million, and HKD 130 million, respectively, with a compound annual growth rate of 73.6%. Net profit during the same period was HKD 11.31 million, HKD 35.48 million, and HKD 36.26 million, respectively, reflecting significant profit growth. The company relies on a lightweight asset operation model, maintaining industry-leading high gross margins, which were 81.6%, 78.6%, and 75.0% in fiscal years 2023–2025, with only slight declines due to increased market competition.

On the supply chain and distribution side, Herb Standard Holdings exhibits high concentration. The prospectus shows that from the client perspective, revenue from the milk company accounted for 89.1%, 76.7%, and 74.5% of total revenue in fiscal years 2023–2025, with a single customer dominating revenue contribution. From the supply side, the top five suppliers account for over 80% of procurement, with some key raw materials relying on a single supplier, indicating potential risks in supply chain stability.

Meanwhile, the company’s operations face several potential risks. First, dependence on major customers—any change in cooperation with the milk company or Mannings could significantly impact revenue and profits. Second, supply chain concentration risk—high reliance on key raw materials and suppliers means that disruptions or price increases could directly affect production and operations. Third, the risk of large pre-IPO dividends—between 2023 and 2025, the company paid approximately HKD 61.7 million in dividends to its controlling shareholder, accounting for 74.29% of net profit during that period, which depletes cash reserves and weakens working capital, increasing cash flow and debt repayment pressures. Additionally, intensifying industry competition, gross margin fluctuations, and product quality control challenges under outsourced production are ongoing operational challenges.

According to the prospectus, the funds raised from this Hong Kong listing will be mainly used for six core areas: (1) increasing investment in R&D for proprietary brands to enrich the product matrix and upgrade formulas; (2) expanding diversified online and offline sales channels to reduce reliance on a single core channel; (3) optimizing supply chain management, strengthening quality control throughout raw material procurement and production; (4) repaying bank loans to improve financial structure and ease debt pressures; (5) upgrading digital IT infrastructure to enhance overall operational efficiency; and (6) replenishing working capital to support normal operations and business expansion.

As a high-growth enterprise in Hong Kong’s health and beauty supplement distribution sector, Herb Standard Holdings leverages its proprietary brand matrix and core channel resources for rapid development. If its secondary listing on the Hong Kong Stock Exchange succeeds, the company will use capital to address operational shortcomings. Its future performance in channel diversification, compliance, and market expansion will be closely watched by the market.

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