F-1/A: Anew Health Eyes Nasdaq Listing with $20 Million IPO

Anew Health Limited, a Hong Kong-based pain management and health services provider, is seeking to raise $20 million through an initial public offering of 5,000,000 ordinary shares.

Summary

• Anew Health Limited is planning an initial public offering of 5,000,000 ordinary shares at an initial price of $4.00 per share, aiming to list on the Nasdaq Global Market under the symbol AVG.
• The company, based in Hong Kong, specializes in non-surgical, non-invasive pain management and health services, utilizing its proprietary RDS+ approach that combines Traditional Chinese Medicine with modern technologies.
• Anew Health operates three service centers in Hong Kong and offers a range of treatments and over-the-counter products.
• The company's revenue for the year ended March 31, 2024, was approximately $40.8 million, a 49.1% increase from the previous year.
• The company faces risks associated with operating in Hong Kong, including potential intervention by the PRC government and uncertainties regarding PRC regulations.
• Following the offering, AW Ocean Limited, the company's largest shareholder, will retain significant control with over 90% of the voting power.
• The company intends to use the net proceeds from the IPO for research and development, establishing a new treatment center in Hong Kong, international expansion, and upgrading its IT systems.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While there's positive revenue growth, the going concern warning and regulatory risks temper the overall outlook.

Positives

• Anew Health's revenue increased by 49.1% to $40.8 million in FY2024.
• The company has a well-recognized brand in Hong Kong for pain management and health services.
• The company's RDS+ approach is a unique selling point.
• The company plans to expand its service centers and product offerings.

Negatives

• The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company faces risks associated with operating in Hong Kong, including potential intervention by the PRC government.
• The company is substantially controlled by its Controlling Shareholder, AW Ocean Limited.
• The company may be deemed to be a controlled company and may follow certain exemptions from certain corporate governance requirements that could adversely affect our public shareholders.

Risks

• The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company faces risks associated with operating in Hong Kong, including potential intervention by the PRC government and uncertainties regarding PRC regulations.
• The company is substantially controlled by its Controlling Shareholder, AW Ocean Limited.
• The company may be deemed to be a controlled company and may follow certain exemptions from certain corporate governance requirements that could adversely affect our public shareholders.
• The company's Ordinary Shares may be prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors.

Future Outlook

The company intends to maintain and strengthen its market position and brand name in the pain management and health service industry to deliver its customers with high-quality services by pursuing strategies such as leveraging its existing market position to drive organic growth, maintaining and enhancing the professional expertise of its frontline staff, developing and broadening the variety of treatment services and product offerings, and substantially enhancing its research and development capabilities and introducing portable energy-based at-home treatment devices for the consumer retail market.

Management Comments

• ANKH, stands for A New Key to Health, testifying our aspiration to be a health brand not only for alleviating physical pain but also for allowing individuals to emanate joy, health, and vitality from within and throughout.

Industry Context

The pain management and wellness industry is experiencing growth due to an aging population, increasing awareness of health, and the rise of chronic musculoskeletal conditions. The non-pharmacological pain management market in Hong Kong is projected to reach approximately HKD 7,882 million in sales value of services in 2025.

Comparison to Industry Standards

• The non-pharmacological pain management service market in Hong Kong is highly competitive, with key players including NYMG Pain Center, New Hope Medical, Hong Kong Medical Pain Management Association, and HK Pain Tech Institute.
• Anew Health is ranked no.3 in terms of average spending per customer and is ranked no. 4 in customer experience trails.
• The consumers with high income levels and in need of pain management services, which the premium pain management brands in Hong Kong are targeting, had HK$49,124 average spending for the pain management related services and products in year 2024, a CAGR of 20.1% compared with HK$34,074 average spending in year 2022.

Related Party Transactions

• On September 27, 2024, Anew Health declared dividend of $10,740,727 to AW Ocean Limited, the Controlling Shareholder, for setting off partially of the amounts due from the Chief Executive Officer and Chairman of the Board, Mr. Ka Wai Victor, MO.

Stakeholder Impact

• Shareholders may face difficulties in protecting their interests due to the company's incorporation in the Cayman Islands and the significant control held by AW Ocean Limited.
• Employees may be affected by the company's ability to attract and retain qualified personnel.
• Customers may benefit from the company's plans to expand its service centers and product offerings.
• The company's suppliers may be affected by changes in its procurement policies.

Next Steps

• The company intends to use the net proceeds from the IPO for research and development, establishing a new treatment center in Hong Kong, international expansion, and upgrading its IT systems.
• The company plans to establish a new treatment center in a prime location in Hong Kong in the second half of 2025.
• The company intends to establish a specialized research and development department in the first quarter of 2025.
• The company expects the prototype of the energy-based treatment devices for its own use and other pain management service provider will be released in early 2026 and market ready by the end of 2026.

Key Dates

Keywords

Anew Health, IPO, Pain Management, Hong Kong, RDS+, Traditional Chinese Medicine, Nasdaq, Healthcare