Analysis of Mandi International's Product Concentration Risk and Response Strategies

Based on the searched information, I will provide a detailed analysis of Mandi International’s product concentration risk and its response strategies.

Mandi International is a subsidiary of 3SBio (1530.HK) focusing on the hair loss drug business, which announced a spin-off for independent listing on the Hong Kong Stock Exchange in November 2025 [1]. From the financial data, Mandi International does have a high product concentration:

• Core Product
  : Mandi series minoxidil hair loss products
• Market Position
  : Held 71% of the domestic minoxidil segment market share in 2024
• Performance
  : H1 2025 revenue was RMB 743 million, gross profit margin was as high as 81.1%, and net profit was RMB 174 million [1]

1. High Revenue Dependence
   : Minoxidil products account for over 90% of the company’s revenue
2. Intensified Market Competition
   : Competitors like Codit Health Group continue to strengthen their efforts
3. Policy Risk
   : Changes in regulatory policies for the pharmaceutical industry may affect product sales
4. Changes in Consumption Trends
   : Shift in consumer preferences or emergence of substitutes

3SBio adopts a “spin-off + focus” strategy to address risks:

• Spin off Mandi International for independent listing to unlock value
• The parent company retains sufficient cash (received a $1.25 billion down payment from the collaboration with Pfizer)
• The parent company has 30 key products in R&D, 27 of which are innovative drugs, providing support for future development [1]

• Mandi was the first approved minoxidil product in China (approved in 2001), with first-mover advantage
• Ranked first in China’s hair loss drug market for ten consecutive years
• The high gross profit margin of 81.1% indicates strong market pricing power for its products

Based on industry development trends, Mandi International may adopt the following strategies:

1. Product Line Expansion
   :
   • Expand to the male health management field
   • Develop supporting care products (shampoo, conditioner, etc.)

2. Market Expansion
   :
   • Explore overseas markets
   • Channel sinking to second and third-tier cities

3. R&D Investment
   :
   • Focus on next-generation hair loss treatment technologies
   • Explore synergies with other medical beauty products

For investors, the following key points need attention:

1. Short-term
   : Mandi International still has strong profitability with a 71% market share and an 81.1% gross profit margin

2. Medium-term
   : Need to observe the capital operations and new product R&D progress after the spin-off listing

3. Long-term
   : Pay attention to the progress of the parent company 3SBio’s innovative drug pipeline, which will provide a new growth engine for the entire group

Overall, Mandi International’s product concentration risk objectively exists, but through obtaining capital support via independent listing, leveraging the parent company’s R&D platform, and fully utilizing its brand and market advantages, the company has a certain risk buffer capacity.

[1] 3SBio Places Shares to Raise HK$3 Billion, Focuses on Innovative Drug Pipeline Layout - Yahoo Finance (https://hk.finance.yahoo.com/news/三生製藥配股募資30億港元-聚焦創新藥管線布局-001714086.html)