HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Herb Standard Holdings Limited / Equity Capital Markets

Herb Standard Holdings Limited (77888239 HK)

<ul>
<li>Herb Standard adopts light-asset model, which helps to bring about high gross margin.However, gross margin showed a declining trend due to increase in promotional discounts to capture more market share</li>
<li>The total sales value of products returned was up 317% YoY in FY2025 due to unsold products after promotional events. There're concerns whether the current strong growth momentum is sustainable</li>
<li>Our forecast is revenue to increase 20%/15%/12% and net profit to increase 14% /11.7%/8.8% in FY2026/FY2027/FY2028, respectively.Due to higher growth/profit margin, valuation of Herb Standard could be higher than peer</li>
</ul>


Herb Standard adopts light-asset model, which helps to bring about high gross margin.However, gross margin showed a declining trend due to increase in promotional discounts to capture more market share
The total sales value of products returned was up 317% YoY in FY2025 due to unsold products after promotional events. There're concerns whether the current strong growth momentum is sustainable
Our forecast is revenue to increase 20%/15%/12% and net profit to increase 14% /11.7%/8.8% in FY2026/FY2027/FY2028, respectively.Due to higher growth/profit margin, valuation of Herb Standard could be higher than peer


Pre-IPO Herb Standard Holdings Limited - The Business, the Concerns and the Outlook

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Pre-IPO Herb Standard Holdings Limited - The Business, the Concerns and the Outlook

​Herb Standard's light-asset model drive high gross margin but declining trend due to increased promotional discounts.Concerns arise over...

Xinyao (Criss) Wang

Herb Standard's light-asset model drive high gross margin but declining trend due to increased promotional discounts.Concerns arise over...