During the Track Record Period and up to the Latest Practicable Date, all of our distributors were Independent Third Parties.
Business · 第 145 页
Our distributors generally do not keep inventories for our products.
Business · 第 146 页
During the Track Record Period, we did not require our distributors to maintain a minimum inventory level and thus we had no visibility into the volume of unsold inventories held by our distributors.
Our revenue derived from distributors decreased from RMB66.0 million in 2024 to RMB20.2 million in 2025, and decreased from RMB10.2 million in the four months ended April 30, 2025 to RMB2.3 million in the four months ended April 30, 2026, primarily due to our proactive channel strategy adjustment to optimize our customer structure, reduce reliance on distributors and enhance supply chain resilience.
Business · 第 172 页
During the Track Record Period, we worked with one, two, three and two distributors in 2023, 2024, 2025 and the four months ended April 30, 2026, respectively, and we did not rely on any single or a few distributors for our sales.
Business · 第 174 页
Furthermore, to mitigate the risk of channel stuffing, we have implemented a flexible ordering arrangement and an inventory monitoring mechanism:
In 2023, 2024, 2025 and the five months ended May 31, 2025 and 2026, revenue from our distributors amounted to RMB275.6 million, RMB356.7 million, RMB465.9 million, RMB189.5 million and RMB264.9 million, representing 46.4%, 50.7%, 55.1%, 53.8% and 63.3% of the total revenue for the same periods, respectively.
Business · 第 163 页
We believe the risk of channel stuffing within our distribution network is low, considering that (i) we maintained a contractual buy-seller relationship with distributors; (ii) as aforementioned, we typically do not allow distributors to return products to us unless there are product quality issues; and (iii) we do not set minimum purchase requirements, nor sales targets, and therefore distributors are not incentivized or obliged to purchase any products exceeding their actual demands.
Business · 第 163 页
Number of distributors a the end of the period | 39 | 44 | 46 | 46
In 2023, 2024, 2025 and for the three months ended March 31, 2025 and 2026, our distribution channels accounted for 8.8%, 8.4%, 11.0%, 11.0% and 19.6%, respectively, of our total revenue.
Business · 第 163 页
Accordingly, we recognize revenue when our products are delivered to and accepted by the distributors.
Business · 第 164 页
To prevent channel stuffing and avoid excessive inventory buildup at the distributor level, we allow our distributors to purchase based on real-time demand with no minimal purchase level requirement.
We primarily sold products through distributors during the Track Record Period, who in turn resold our products to their sub-distributors and their retail channels, including national and regional retail chains, cellular network carriers, retail stores, e-commerce platforms, and others.
Business · 第 126 页
We terminated collaborations with certain distributors, primarily because (i) we had arranged some distributors whose purchase amount was relatively small, particularly those in India, to purchase our products from our other distributors instead of purchasing directly from us, so as to focus our resources on managing distributors who purchased larger amount of products; (ii) we terminated collaboration with distributors who failed to meet our evaluation standards, including sales performance, reputation, and general working relationship with us, or violation of our contractual arrangements; and (iii) some of our distributors had ceased operation or changed their business.
Business · 第 128 页
In order to prevent channel stuffing and cross-region sales, and to mitigate cannibalization risk within our distribution channels, we implemented the following measures to oversee and manage our distributors:
In 2023, 2024, 2025 and the six months ended June 30, 2026, revenue contributed by our five largest distributors in each period during the Track Record Period amounted to RMB210.0 million, RMB268.9 million, RMB266.1 million and RMB107.2 million, respectively, accounting for approximately 56.1%, 51.1%, 48.7% and 45.0% of our total sales to distributors for the respective periods.
Business · 第 150 页
The Directors are of the view that the Group has a low exposure to channel stuffing risk.
Business · 第 152 页
Accordingly, the discontinuation of relationships with certain distributors was not due to active termination initiated by us, but rather a result of a natural cessation of business.
We sell mineral products to trading partners to serve certain downstream end-customers that may face capital constraints.
Business · 第 124 页
We believe the risks associated with channel stuffing or trade loading are limited: (i) we do not impose sales targets or minimum purchase obligations on trading partners, and orders are placed on demand reflecting specific end-customer requirements; (ii) there are no product returns in mineral product sales, and we do not engage in consignment or speculative sales arrangements; and (iii) we operate a payment-before-delivery system, which generally does not generate trade receivables.
In 2023, 2024, 2025 and the six months ended June 30, 2025 and 2026, sales to our distributors amounted to approximately RMB2,659.6 million, RMB2,722.2 million, RMB2,694.3 million, RMB1,295.2 million and RMB1,330.3 million, which accounted for 66.5%, 65.5%, 66.2%, 64.2% and 66.9% of our revenue from the sale of products, respectively.
Business · 第 128 页
The number of distributors that ceased to distribute our products during the periods presented was primarily because we have been refining our distributor network so as to optimize our sales efficiency, under which certain former distributors did not meet our updated expectations and requirements regarding distribution capability, coverage and service quality.
Business · 第 129 页
We do not require our distributors to maintain minimum inventory levels, and we do not impose fixed minimum purchase requirements on our distributors.
The number of our channel partners increased from 324 as of December 31, 2023 to 397 as of December 31, 2024 and further to 443 as of December 31, 2025, reflecting the growing market demand, our expanding distribution network and successful commercialization strategies.
Business · 第 149 页
We believe the risk of channel stuffing is effectively mitigated through the structure of our operating model and the inventory-management measures.
In 2023, 2024, 2025 and the three months ended March 31, 2026, revenue generated from such distributor customers accounted for 6.0%, 6.3%, 2.5% and 7.0% of our total revenue, respectively.
Summary · 第 6 页
Therefore, our Directors believe that there was no channel stuffing issue during the Track Record Period.
Business · 第 161 页
In 2023, 2024, 2025 and the three months ended March 31, 2026, we terminated business relationship with 47, 71, 91 and 27 distributors, respectively, primarily due to the expiration of the distribution agreements.
Our revenue from dealers was RMB262.5 million, RMB711.5 million, RMB1,847.9 million and RMB962.5 million, in 2023, 2024, 2025 and the four months ended April 30, 2026, representing 12.2%, 23.9%, 46.9% and 60.5% of our total revenue during the same period.
Business · 第 136 页
Our relationship with our dealers is a buyer and seller relationship, as our dealers acquire ownership of the products we deliver to them.
Business · 第 137 页
Our Directors believe that the risk of channel stuffing on our dealers is low, based on the following facts and observations: (1) our relationship with dealers is a buyer and seller relationship, and dealers are responsible for their own inventory risks; (2) we do not accept returns of our products and only allow exchanges of our products under limited circumstances such as quality defects or damages during transportation.
We primarily sell our pharmaceutical products and medical devices through third-party distributors, who are our direct customers and subsequently sell our products to hospitals, pharmacies, and other medical institutions.
Business · 第 188 页
As of June 30, 2026, our distribution network comprised 678 distributors across over 30 provincial-level regions in China.
Business · 第 188 页
In particular, in the six months ended June 30, 2026, as certain of our products, such as TaiJia and XinLiXin, participated in national VBP schemes following the start of VBP cycles, we strategically optimized our distribution network by focusing on large-scale distributors, which resulted in a decrease in the number of distributors.
During the Track Record Period, revenue from direct sales accounted for 54.9%, 57.6%, 63.9%, 59.0% and 57.6% of our total revenue for 2023, 2024, 2025 and the four months ended April 30, 2025 and 2026, respectively, while the revenue from distributor sales accounted for 45.1%, 42.4%, 36.1%, 41.0% and 42.4% of our total revenue for the same periods.
Business · 第 187 页
In 2023, 2024, 2025 and four months ended April 30, 2026, we engaged 45, 25, 31 and 16 new distributors, respectively. During the same periods, we terminated or discontinued business with 6, 23, 8 and 12 distributors, respectively.
Business · 第 189 页
We believe that we were not subject to any material channel stuffing risk, given that: (i) we maintain a buy-out relationship with our distributors and are not responsible for unsold inventory held by them, which reduces their commercial incentive to overstock our products;
In FY2023, FY2024, FY2025 and 3M2026 revenue generated from sales to distributors amounted to RMB10.4 million, RMB17.2 million, RMB39.3 million and RMB12.8 million, respectively, accounting for 4.3%, 6.4%, 12.4% and 16.8% of our total revenue in each year/period during the Track Record Period, respectively.
Business · 第 138 页
In particular, the decrease from 23 distributors as at 31 December 2025 to 11 distributors as at 31 March 2026 was primarily attributable to our efforts to streamline the distributor network and focus on distributors with stronger sales performance and market coverage.
Business · 第 139 页
We mitigate the channel stuffing risks through measures such as determining each distributor's minimum purchase amount based on its historical sales volume, trade receivables status and inventory levels, and conduct regular reviews of the distributors' inventory levels and trade receivable collection status, order approval, sales-operation-finance collaboration, channel inventory and shipment limits, and regular monitoring.
In FY2024 and FY2025, four and seven inactive distributors discontinued relationships with us, respectively, primarily due to their low sales volumes and limited profitability, and they elected not to continue the distribution arrangement with us.
Business · 第 130 页
Based on the foregoing, we believe there was no significant unsold inventory owned by distributors during the Track Record Period and as of the Latest Practicable Date, and the risk of channel stuffing is remote in our distribution network.
In particular, revenue generated from distributors as a percentage of our total revenue increased from 59.7% in 2024 to 71.3% in 2025, and increased from 62.8% in the six months ended June 30, 2025 to 65.6% in the six months ended June 30, 2026, primarily driven by the rapid expansion of market demand, during which distributor channels provided broader customer reach and faster market coverage.
Business · 第 176 页
We sell our solutions to distributors in accordance with our distribution agreements and the specific purchase orders placed by them, and we do not impose minimum purchase or sales targets.
Business · 第 177 页
During the Track Record Period and up to the Latest Practicable Date, to the best knowledge of our Directors, there was no material channel stuffing or cannibalization issue among our distributors.
杭州糖吉医疗科技股份有限公司HANGZHOU TANGJI MEDICAL TECHNOLOGY CO., LTD.
逾99%收入经由经销商模式产生
In the year ended December 31, 2024 and 2025 and the six months ended June 30, 2025 and 2026, we derived 99.1%, 99.6%, 99.6% and 99.7% of our revenue through a distributorship model, respectively.
Business · 第 196 页
In 2024, 2025 and the six months ended June 30, 2025 and 2026, we terminated cooperation with nil, 24, five and 17 distributors, respectively, primarily taking into account their performances, specifically because they either failed to develop and gain admission to target hospitals according to the agreed-upon plans, or failed to meet their minimum sales targets.
Business · 第 196 页
To effectively mitigate channel stuffing risks, we have implemented distributor management policies, including: (i) requiring full payment before delivery; (ii) only allowing product returns in the event of product quality defects; (iii) periodically monitoring our distributors’ inventory levels to ensure they maintain a reasonable stock level commensurate with their sales capabilities; and (iv) requiring distributors to provide sales materials on a monthly basis, such as invoices and distribution records, enabling us to track their actual sell-through data and monitor the alignment between their sales and genuine market demand.
In 2024, 2025 and for the six months ended June 30, 2026, our sales to our distributors accounted for 91.7%, 95.0% and 99.5% of our revenue for the respective year/period.
Business · 第 172 页
The number of our tier-one distributors increased from 144 as of December 31, 2024 to 192 as of December 31, 2025 and to 212 as of June 30, 2026, as we expanded sales of our products, particularly NovaPulse IABP and iNOwill.
Business · 第 176 页
the Directors are of the view, and the Sponsor concurs, that we are not exposed to material channel stuffing risk.
As of the Latest Practicable Date, we had approximately 170 distributors covering over 30 provinces, municipalities, and autonomous regions, and our distribution network covered over 6,400 hospitals in China.
Business · 第 163 页
We do not set minimum purchase amounts or minimum sales targets for our distributors.
Business · 第 166 页
We grant rebates to distributors under a two-part framework comprising a monthly KPI-based performance rebate and an early payment rebate.
征祥医药（南京）集团股份有限公司Zenshine Pharmaceuticals (Nanjing) Group Co., Ltd.
经销模式销售及经销商管理与变动
In 2024, 2025 and the six months ended June 30, 2025 and 2026, our revenue generated from sales of sebaloxavir marboxil tablets under the distribution model amounted to nil, RMB5.0 million, nil and RMB2.2 million, respectively.
Business · 第 177 页
As of June 30, 2026, we have engaged 30 distributors across China, among which one of them is an online distributor.
Business · 第 179 页
We have implemented the following measures to prevent cannibalization and channel stuffing: