Business Context and Reporting Period
Ping An Biomedical Co., Ltd. (formerly Majestic Ideal Holdings Ltd) is a Cayman Islands exempted company incorporated in November 2021. The company operates as a holding company with its primary operations conducted through its PRC subsidiary, New Brand Cashmere Products Co., Ltd. The company provides supply chain management (SCM) services in the apparel industry, focusing on yarn products (primarily cashmere) and finished garments. The reporting period covers the fiscal year ended September 30, 2025. The company completed its Initial Public Offering (IPO) in July 2025 and trades on the Nasdaq Capital Market under the symbol PASW.
Key Financial Metrics
| Metric | 2025 (RMB) | 2025 (US$) | 2024 (RMB) |
|---|---|---|---|
| Total Revenue | 34,147,936 | 4,796,732 | 87,622,395 |
| Gross Profit | 949,505 | 133,376 | 5,416,887 |
| Gross Margin | 2.8% | 2.8% | 6.2% |
| Net Loss | (12,829,206) | (1,802,108) | (1,284,172) |
| Operating Cash Flow | (6,427,762) | (902,902) | 14,630,221 |
| Cash and Restricted Cash | 36,696,290 | 5,154,697 | 130,923 |
| Total Current Liabilities | 23,076,822 | 3,241,582 | 63,576,483 |
| Shareholders' Equity | 45,242,007 | 6,355,106 | (7,188,181) |
Note: US$ amounts are translated at the rate of US$1 = RMB 7.1190.
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased by 61.0% to RMB 34.1 million (US$ 4.8 million) from RMB 87.6 million in 2024. This was driven by a 61.1% drop in yarn sales due to decreased customer demand.
- Margin Compression: Gross profit margin contracted from 6.2% to 2.8%. The margin for yarn products fell to 1.8% as the company lowered selling prices to acquire customers in a weakened market.
- Significant Credit Loss Provision: The company recorded a provision for credit losses of RMB 9.3 million (US$ 1.3 million), a substantial increase from RMB 0.1 million in 2024. This was due to full provisioning against long-aging receivables from specific customers.
- Liquidity Improvement: Cash and restricted cash balances surged to RMB 36.7 million (US$ 5.2 million) from RMB 0.1 million in 2024, primarily due to IPO proceeds of RMB 108.2 million (US$ 15.2 million) and related party loans, offset by repayments of related party debts and offering costs.
- Equity Turnaround: Shareholders' equity moved from a deficit of RMB 7.2 million in 2024 to a positive balance of RMB 45.2 million in 2025, driven by the capital raised from the IPO.
Guidance, Outlook, Risks, and Unusual Items
- Going Concern: Despite recording a net loss and having a history of negative operating cash flows, management asserts the company has sufficient working capital (RMB 40.6 million) to meet obligations for the next 12 months, supported by IPO proceeds.
- Regulatory Risks (China): The filing highlights significant risks related to PRC laws, including the potential for the company to be deemed a PRC tax resident, restrictions on foreign exchange remittances, and evolving cybersecurity and data privacy regulations. The company obtained a new CSRC approval for its overseas listing in March 2025 after a previous approval lapsed.
- Internal Control Weaknesses: The company disclosed material weaknesses in internal controls over financial reporting, including inadequate segregation of duties and a lack of independent directors/audit committee prior to the IPO. Remediation is expected to be completed upon listing.
- Customer Concentration: The top five customers accounted for 91% of revenue in 2025. The company has no long-term agreements with these customers, creating high dependency risk.
- Subsequent Events:
- Management Changes: In October 2025, the Board accepted the resignation of the former Chairman and CEO. Mr. Pijun Liu was appointed as the new Chairman and CEO.
- Nasdaq Delisting Warning: On November 24, 2025, the company received a notice from Nasdaq stating it no longer meets the minimum bid price requirement of $1.00 per share.
Investor Verification Checklist
- Receivables Quality: Verify the collectability of the remaining accounts receivable (RMB 16.9 million) given the massive provision taken in 2025 and the high concentration of credit risk in a few customers.
- Related Party Transactions: Review the nature and repayment terms of the RMB 2.9 million in payables to related parties and the RMB 51.9 million in loans received from related parties during the year.
- Regulatory Compliance: Confirm the status of the CSRC filing and ensure no new PRC regulatory actions threaten the company's ability to operate or remit funds.
- Stock Price Compliance: Monitor the company's ability to regain compliance with Nasdaq's minimum bid price requirement following the November 2025 notice.
- Internal Controls: Assess the progress of remediation efforts regarding the identified material weaknesses in internal controls over financial reporting.