Insoftb Aims for IPO on the HKSE with a 58% Compound Annual Growth Rate in Revenue

EqualOcean has learned that on May 10, 2024, Shubao International Group Co., Ltd. (hereinafter referred to as "Insoftb") officially submitted its prospectus to the Hong Kong Stock Exchange, aiming for a listing on the Main Board.

Founded in 2010, Insoftb specializes in providing disposable hygiene products for infants, children, and personal use. Currently, Insoftb mainly sells branded infant care products under its own brand "Insoftb," with over 140 SKUs across 6 categories as of December 31, 2023; it sells women's care products under the brand "May Whisper," with over 20 SKUs as of the same date; and it sells adult incontinence products under the brand "Kang Shubao," with over 15 SKUs as of December 31, 2023.

Among them, Insoftb's core category of infant care products is the largest submarket in the disposable hygiene products industry for both export and domestic markets in China. From 2021 to 2023, the sales of Insoftb's infant care products increased from CNY 229 million (USD 34.3 million) to CNY 468 million (USD 69.7 million), with a compound annual growth rate of 43.3%.

It is worth noting that while expanding its D2C own-brand product business in China, Insoftb's overseas contract manufacturing business has been growing, and it has been exporting core infant care products to foreign brand merchants, bringing their respective brands to emerging markets in Eurasia, such as Russia, Southeast Asia, and Kazakhstan. According to a report by Frost & Sullivan, based on export volume in 2022, Insoftb is the second-largest exporter of disposable hygiene products for infants and children to Russia in China.

Since the first supply agreement in 2020 until December 2023, the order volume from a top Russian retailer has increased four times consecutively, and the supply agreement has been extended to December 31, 2030. In addition to the top Russian retailer (the largest children's goods retailer in Russia), Insoftb also provides own-brand products to a leading Japanese children's goods chain brand listed on the Tokyo Stock Exchange.

Furthermore, from 2021 to 2023, Insoftb also provided services to several major international brand merchants, including but not limited to, a U.S. personal care products multinational manufacturer listed on the New York Stock Exchange and ranked among Fortune's Global 500, which sells in over approximately 175 countries. Since 2023, Insoftb has also begun manufacturing products for a large Chinese household paper and personal care hygiene products manufacturer listed on the Main Board of the Stock Exchange of Hong Kong.

In terms of financial data, from 2021 to 2023, Insoftb's revenue was CNY 263 million (USD 39.2 million), CNY 408 million (USD 60.2 million), and CNY 655 million (USD 97.1 million), respectively, with a compound annual growth rate of 57.81%; gross profit was CNY 57 million (USD 8.4 million), CNY 111 million (USD 16.3 million), and CNY 197 million (USD 29.4 million), respectively, with a compound annual growth rate of 85.91%; the gross margin was 21.6%, 27.3%, and 30.1%, respectively; and the net profit margin was 3.8%, 10.3%, and 8.8%, respectively.

Insoftb stated in its prospectus that the net proceeds from the IPO will be primarily used for purchasing machinery for additional infant and women's care product production lines; purchasing machinery for a non-woven fabric production line; enhancing brand, marketing, and promotional activities; upgrading warehouses and investing in IT infrastructure; and for general operating funds.