Analysis of Marketing and R&D Expense Structure of Shengtong Specialty Medical

According to public information, Shengtong Specialty Medical does have marketing expenses far higher than R&D expenses. From the prospectus data:

• 2022: 192 million yuan, accounting for 39.0% of total revenue [1]
• 2023: 267 million yuan, accounting for about 40% of total revenue [1]
• 2024: 329 million yuan [1]

From relevant reports, Shengtong Specialty Medical’s R&D expense ratio is obviously low. Although the specific amount has not been clearly disclosed in the search results, the issue of the huge gap between marketing expenses and R&D expenses has been concerned by many parties.

1. Effective Channel Construction
   - As of June 30, 2025, products are sold to more than 700 medical institutions and in over 16,000 retail points [1]
2. Leading Market Share
   - Ranks first among local brands in China’s special medical food market with a 6.3% market share [1]
3. Wide Brand Coverage
   - Has 333 offline distributors, building a large sales network

• As of December 31, 2024, net current liabilities reached 405 million yuan and total deficit was 318 million yuan [1]
• Both current ratio and quick ratio are below 1x, with high short-term debt repayment pressure [1]

• Inventory turnover days surged from 54 days in 2022 to 155 days in 2024, an increase of 187% over two years [1]
• This means a large amount of capital is occupied in inventory, seriously affecting liquidity

• From 2022 to 2024, 85.5%-90.3% of revenue came from allergy prevention products [1]
• Other product lines (premature infants, lactose-free, full nutrition, etc.) accounted for less than 10%

• Low R&D expense ratio limits the speed and quality of new product development [1]
• The special medical food industry focuses on innovation and quality, and R&D capability is the core competitiveness
• If competitors increase R&D investment, market share may be lost

Liu Zhigeng, a well-known expert in finance, taxation and auditing, and a senior certified public accountant, pointed out: “The surge in current liabilities, insufficient cash solvency, expanding deficit and inventory backlog of Shengtong Specialty Medical have formed a vicious circle, and substantive problems have made the company show systemic risks. If the company cannot obtain financing through IPO or improve its main business profitability, the fragility of its financial structure will threaten its continuous operation.” [2]

1. The model of emphasizing marketing over R&D faces challenges in the special medical food industry, which pays more attention to innovation and quality
2. Financial pressure continues to increase; if IPO financing is not smooth, the company may be forced to adjust its strategic pace
3. Over-concentrated product lines increase market risk; once there is volatility in the allergy prevention product market, it will seriously affect overall performance
4. Deteriorating inventory turnover indicates possible pressure on the sales side, and the marginal benefit of high marketing investment is declining

It is recommended that investors focus on its IPO progress, changes in R&D investment, and improvements in financial structure.

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[1] Sina Finance - Shengtong Specialty Medical Resubmits Application, Financial Tension Remains Unresolved (https://finance.sina.com.cn/jjxw/2025-12-15/doc-inhawxxz1777028.shtml)

[2] NetEase - Professional Nutrition Sinks, Shengtong Specialty Medical’s Financial Hidden Dangers Stand Out (https://www.163.com/dy/article/K7P7BT0H0552Z4HL.html)