Analysis of Issues Exposed by Bairuiji's 70% Reduction in Fundraising

Based on the latest information I have searched, I will provide you with a detailed analysis of the issues exposed by the 70% reduction in Bairuiji’s planned RMB 350 million fundraising.

• Original Planned Fundraising
  : RMB 350 million (35,000 ten thousand yuan) [1]
• Revised Planned Fundraising
  : RMB 106 million [2]
• Reduction Rate
  : Approximately 70%

1. Risk of Over-Reliance on a Single Product
   • Revenue from uterine cavity segment products accounts for over 60% of total revenue [3]
   • The size of this niche market is only about RMB 500 million (calculated based on ex-factory price) [3]
   • The company already held a 38.35% market share in 2023, leaving limited room for further growth [3]

2. Intensified Market Competition
   • Facing fierce competition from peer competitors such as Saisikesisi and Haohai Biotech [3]
   • Competitors’ products are being launched one after another, increasing pressure from price and performance competition [3]

1. Losses in Functional Skincare Business
   • This business recorded significant losses in 2022 and 2023 [4]
   • Online promotion expense ratios are as high as 60-100%, severely impacting profitability [4]
   • Promotion expenses on the Douyin platform increased from RMB 10.568 million in 2022 to RMB 23.6954 million in 2024 [4]

2. Slow Expansion in Emerging Segments
   • Revenue from pelvic (abdominal) cavity segment products only reached RMB 11.474 million in 2024, showing weak growth [3]
   • Revenue from nasal cavity segment products was RMB 13.3827 million in 2024, with a small scale [3]

1. Workforce Structure Issues
   • As many as 85.04% of employees have a college diploma or below [2]
   • R&D staff account for only 16.24% (38 people) [2]
   • Insufficient reserve of highly educated talents may affect innovation capabilities [2]

2. Internal Control Deficiencies
   • There are still cases where social security and housing provident funds for some employees are paid by third parties [3]
   • The effectiveness of rectification measures has been questioned [3]

1. High Channel Dependence
   • Dealer revenue accounts for approximately 80% of total revenue [3]
   • The number of dealers decreased from 381 in 2022 to 284 in 2024 [3]

2. Risks of Multi-Tier Dealer Model
   • The downstream customers of some promotional dealers are other dealers [3]
   • It is difficult to verify the authenticity of terminal sales [3]
   • Inventory backlog is a prominent issue; for example, Beijing Xinherui Technology’s inventory amount reached RMB 5.8752 million at the end of 2024 [3]

1. Trademark Litigation
   • Involved in litigation over trademark rights confirmation [3]
   • The litigated trademarks are widely used in the company’s main business, and the uncertainty of the outcome may affect production and operation [3]

• The overall valuation level of the Beijing Stock Exchange (BSE) market is low [1]
• Investors are becoming more cautious about IPOs in the pharmaceutical and biological industry [1]
• The company’s fundamentals cannot support high valuation expectations [1]

• The BSE’s review focus has shifted to enterprise quality and growth potential [3]
• Requirements for dealer verification, market space demonstration, etc., have become stricter [3]
• The company’s multiple business data have been questioned by regulators [3]

• Capital market enthusiasm for the pharmaceutical and biological industry has declined [1]
• The functional skincare market is highly competitive, and customer acquisition costs continue to rise [4]
• Impact expectations from centralized procurement policies for medical devices [3]

1. Impact on Fundraising Investment Projects
   : The significant reduction in actual fundraising may affect the implementation progress and expected benefits of the projects [1]

2. Risk of Performance Fluctuation
   : The original logic of performance growth is facing challenges, and there is uncertainty about future performance [3]

3. Valuation Risk
   : Although the fundraising amount has been reduced, attention should still be paid to the rationality of the issuance pricing [1]

4. Liquidity Risk
   : The BSE market has relatively weak liquidity, and the company may face low turnover rate after listing [1]

The Bairuiji case reflects the regulator’s high focus on enterprise quality, market space, and internal control standardization in the current BSE IPO review process, and also exposes common problems existing in some small and medium-sized enterprises during the IPO process. It is recommended that investors closely follow the company’s subsequent review feedback and rectification progress, and make investment decisions prudently.

[1] Sina Finance - “Bairuiji to Undergo BSE IPO Hearing on January 21, Plans to Raise RMB 350 Million” (https://finance.sina.com.cn/jjxw/2026-01-14/doc-inhhhtei4911250.shtml)

[2] Sina Finance - “Bairuiji IPO: 85.04% of Employees Hold College Diploma or Below” (https://finance.sina.com.cn/stock/aiassist/ipodsz/2026-01-15/doc-inhhkrvx4800606.shtml)

[3] Eastmoney.com - “Reply to the Second Round of Review Inquiry Letter Regarding the Application Documents for the Public Offering of Stocks and Listing on the BSE by Changzhou Bairuiji Biomedical Co., Ltd.” (https://pdf.dfcfw.com/pdf/H2_AN202512021792591872_1.pdf)

[4] Eastmoney.com - “Prospectus (Submission Draft) of Changzhou Bairuiji Biomedical Co., Ltd.” (https://pdf.dfcfw.com/pdf/H2_AN202412261641439039_1.pdf)