With the rise in health consciousness and the promotion of healthy lifestyles, consumer interest in nutritional and health foods has been steadily increasing. Particularly in the post-pandemic era, public health awareness has further strengthened, and people no longer rely solely on daily diets for nutrition. This development trend has also presented significant growth opportunities for the nutritional and health food industry. According to Frost & Sullivan, the retail sales of nutritional and health foods in China have been growing continuously in recent years, increasing from ¥297.9 billion in 2020 to ¥405.7 billion in 2024, representing a compound annual growth rate (CAGR) of 8.0%. It is projected to reach ¥645.2 billion by 2029, with a CAGR of 9.7%.
Against this backdrop, a growing number of nutritional and health food companies have begun accelerating their expansion, extending their reach into the secondary market. A case in point is Xizi Health, which holds the viral Douyin hit "FIBOO Vitality Iron." On January 8, Hunan Xizi Health Group Co., Ltd. (referred to as "Xizi Health") submitted a listing application to the Hong Kong Stock Exchange, aiming for a main board listing. The company is a sports nutrition and functional food enterprise that has rapidly emerged as a "dark horse" in China's sports nutrition sector, largely due to its precision marketing and content-driven engagement on social e-commerce platforms like Douyin.
Next, let's delve deeper into Xizi Health's prospectus to explore whether the company can ride the industry's growth wave and become a "dark horse" in the nutritional and health food segment of the Hong Kong stock market.
Established in 2013, Xizi Health has now become a leading player among domestic sports nutrition food brands. The company is primarily engaged in the research and development, production, and sale of sports nutrition foods, operating four major brands: FoYes, fiboo, Guben Diary, and HotRule. Its product portfolio covers categories such as whey protein powder, creatine, functional gummies, ready-to-drink/instant coffee, and energy supplements. According to Frost & Sullivan data, based on the retail sales of sports nutrition foods in 2024, the company ranked third among Chinese sports nutrition food brand operators, establishing itself as a leader in China's sports nutrition food market. It was also the fastest-growing sports nutrition food brand operator in China from 2022 to 2024.
As understood, Xizi Health's rapid rise to prominence is closely linked to its data-driven marketing approach. Specifically, the company has a deep understanding of online traffic operations, tailoring differentiated operational strategies for different brands and sales channels. It has built an efficient multi-channel sales network centered on online direct-to-consumer (DTC) models, with offline expansion as a strategic supplement, enabling effective consumer reach.
Building on this foundation, Xizi Health has also established a matrix of four brands, precisely targeting specific demographics and usage scenarios. For instance, FoYes focuses on professional fitness enthusiasts, specializing in high-purity protein powder; fiboo targets the "she economy," positioning itself as a "female sports health nutrition brand" with products like iron-rich gummies and good night collagen gummies; Guben Diary enters the weight management and functional snack market, primarily offering meal replacement shakes and gummies; HotRule attracts the Z generation seeking trends and great taste.
Driven by this model, Xizi Health has quickly incubated multiple hit brands. For example, its brand "FoYes" saw revenue surge by 364% year-over-year in the first nine months of 2025, while other brands also achieved sales exceeding ¥500 million within one or two years of launch. This success is largely attributed to the company's saturation-style marketing campaigns on content platforms like Douyin.
Through precision marketing and content seeding, Xizi Health's core financial metrics have also achieved rapid growth. Prospectus data shows that for the nine months ended September 30, 2023, 2024, and 2025, the company's revenue was ¥1.447 billion, ¥1.692 billion (a year-on-year increase of 16.9%), and ¥1.609 billion (a year-on-year increase of 23.0%), respectively. The growth momentum stems from the volume increase of its own brands (FoYes contributed 35.0% of revenue in the first nine months of 2025) and the enhanced penetration of its online channels.
Simultaneously, the company's net profit has also shown a steady upward trend: for the nine months ended September 30, 2023, 2024, and 2025, Xizi Health's net profits were ¥94 million, ¥149 million, and ¥118 million, with year-on-year growth rates of 58.5% and 1.9% for the latter two periods, respectively.
However, behind this high growth lies the developmental concerns associated with Xizi Health's "heavy marketing" approach. According to prospectus data, from 2023 to the first nine months of 2025, the company's sales and distribution expenses were ¥473 million, ¥751 million, and ¥756 million, showing a significant year-on-year increase. The sales expense ratio also rose from 32.7% in 2023 to 47% in the first three quarters of 2025, thereby eroding profits to some extent. Notably, the significantly lower net profit growth rate compared to revenue growth in the first nine months of 2025 was primarily impacted by the rising sales expense ratio.
Aggressive marketing investments have also placed noticeable pressure on the company's cash flow. Its net cash flow from operating activities declined continuously from ¥270 million in 2023 to ¥66 million in the first nine months of 2025, reflecting that the company's high growth comes at the cost of substantial occupation of working capital.
It is evident that Xizi Health's marketing strategy is the core engine of its short-term success, but it also represents the most significant concern for its long-term development.
Looking at the revenue structure, with Xizi Health's successful strategic transition from being driven by third-party brand operations to being driven by its own brand portfolio, the company has demonstrated its endogenous growth momentum through the successful launch and rapid growth of its proprietary brands. According to a Frost & Sullivan report, the company is one of the few that has successfully transitioned from providing third-party brand operation services to operating its own portfolio of nutrition and health food brands. This transformation stems from Xizi Health's long-term deep cultivation within the industry value chain and its forward-looking strategic planning.
As its own brands experienced rapid growth, the revenue contribution from these brands increased from 42.4% in 2023 to 97.3% for the nine months ended September 30, 2025. Specifically, revenue from the company's own brands grew from ¥614 million in 2023 to ¥1.498 billion in 2024, a year-on-year increase of 144.0%, and further increased to ¥1.567 billion for the nine months ended September 30, 2025, representing a 38.7% year-on-year growth.
Concurrently, benefiting from the substantially increased proportion of high-margin own brands, Xizi Health's gross profit margin has shown a steady upward trend. The gross profit margin was 44.4% in 2023, increased to 58.8% in 2024, and further rose to 59.5% in the first nine months of 2025.
However, despite successfully achieving its brand transformation, Xizi Health's heavy reliance on a single platform raises questions about its future growth sustainability. The prospectus reveals that Xizi Health's revenue is highly concentrated in online channels: for 2023, 2024, and the first three quarters of 2025, online channel revenue accounted for approximately 99.4%, 99.0%, and 98.9% of total revenue, respectively. Within this, Douyin is the most critical "single stronghold": during the reporting periods, revenue from the Douyin channel accounted for a high 45.5%, 61.9%, and 62.8% of total revenue, respectively. Additionally, the company disclosed that its sales model is predominantly "Direct-to-Customer (DTC)" – DTC revenue accounted for approximately 88.4% in 2024 and about 89.8% in the first three quarters of 2025.
This high dependence on a single platform and individual consumers inherently exposes a growth weakness for Xizi Health. Essentially, this "putting all eggs in one basket" model makes its performance highly vulnerable to impacts from platform algorithm changes, rising traffic acquisition costs, or shifts in platform policies, posing significant systemic risks.
In summary, Xizi Health has adeptly capitalized on the industry trends of "online shift, mass-market appeal, and branding," rapidly rising through its acute sense for traffic trends and brand incubation capabilities. However, its ability to truly embark on a new "growth cycle" in the future hinges on whether it can overcome its "traffic dependency" and successfully transition from being an "internet sensation" to achieving enduring popularity. For investors, key factors to watch will be whether Xizi Health can effectively utilize the funds raised from its IPO to reduce its reliance on a single online channel, control its sales expense ratio, and demonstrate that its high-margin own brands possess sustained product innovation capabilities and user loyalty.
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