Shentong Special Medical Current Ratio Analysis: Short-Term Solvency Is Truly Concerning

According to public information, Shentong Special Medical (Qingdao) Nutrition & Health Technology Co., Ltd. is applying for a Hong Kong IPO, and its financial condition indeed shows

.

[1][2]:

Indicator	Value	Status
Total Assets	Approx.417 million yuan	Small scale
Total Liabilities	Approx.735 million yuan	High liabilities
Net Assets	Approx.-318 million yuan	Severely insolvent
Net Current Liabilities	Approx.405 million yuan	Liquidity crisis

[1][3]

Time	Current Ratio	Quick Ratio	Evaluation
2022	<1.0	<1.0	Below safety line
2023	<1.0	<1.0	Below safety line
2024	<1.0	<1.0	Below safety line

• Current ratio below1
  means the company’s current assets are insufficient to cover current liabilities
• Quick ratio also below1
  indicates that even after excluding inventory, the company still lacks sufficient quick assets to repay short-term debts
• Net current liabilities up to405 million yuan
  indicates the company has a serious short-term funding gap

####1.

The company’s net assets are -318 million yuan, and total liabilities exceed total assets by318 million yuan, which is a typical [1][2].

####2.

• A large amount of capital is occupied by inventory, affecting liquidity
• Accounts receivable collection cycle may be long
• Capital turnover efficiency is low

####3.

• Cumulative dividends approx.460 million yuan [2]
• R&D investment is less than 10% of dividends
• The development model of
  prioritizing dividends over R&D
  is worrying

• Fast industry growth: Revenue increased from491 million yuan in 2022 to782 million yuan in2024
• Gross profit margin as high as71%, outstanding performance [4]
• Market competition is increasingly fierce; continuous investment in R&D and channel construction is needed

1. Liquidity Risk
   : Short-term solvency is severely insufficient
2. Sustainability Risk
   : Excessive dividend payout may affect long-term development capacity
3. Compliance Risk
   : New national standards for special medical infant food will be implemented in2027, which may affect existing products [5]
4. Product Monotony Risk
   : Over-reliance on special medical food business

, based on the following:

1. ✅
   Current ratio below1 for three consecutive years
   , safety margin severely insufficient
2. ✅
   Quick ratio also below1
   , no guarantee even after excluding inventory
3. ✅
   Net current liabilities up to405 million yuan
   , obvious funding gap
4. ✅
   Insolvent (net assets: -318 million yuan)
   , fragile financial structure

• How the company will improve its capital structure after listing
• Whether the raised funds will be prioritized for debt repayment
• Whether management will adjust dividend policies
• Subsequent business expansion and R&D investment plans

: Although Shentong Special Medical has strong revenue growth and excellent gross profit margins, its . The continuous current ratio and quick ratio below1 indicate that short-term solvency is truly concerning, and investors need to carefully evaluate related risks.

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[1] ifeng Finance - “Shentong Special Medical Still Pays High Dividends Despite Financial Deficit” (https://www.ifeng.com)
[2] cnfol.com - “Shentong Special Medical IPO: Financial Paradox Behind 467 Million Yuan Dividends” (https://www.cnfol.com)
[3] Chenyu Matou - “Shentong Special Medical Resubmits Application, Tight Finances Hard to Resolve” (https://www.chenyumedeng.com)
[4] Diyifengkou - “Gross Profit Margin Crushes Beingmate, But Shentong Special Medical Can’t Conquer Neighborhood Mother-and-Baby Stores?” (https://www.diyifengxin.com)
[5] Sina Finance - “Shentong Special Medical Is Insolvent; Special Medical Food Business With Over70% Gross Profit Margin Is Also Hard to Do” (https://finance.sina.com.cn)