Tainuo Maibo IPO: a poor temple and a wealthy monk—passing the risk to public investors to shoulder

Ask AI · How do high executive salaries in a loss-making context affect investor confidence?

According to arrangements by the Shanghai Stock Exchange, the SSE Listing Review Committee will hold the 16th review meeting for 2026 on April 3rd to examine the initial public offering of Zhuhai Taino Mebo Pharmaceutical Co., Ltd. (referred to as “Taino Mebo”).

For this IPO, Taino Mebo chose the fifth set of standards for the STAR Market. The company stated in its prospectus that it meets and applies the listing standards specified in Article 2.1.2, item (V) of the Shanghai Stock Exchange STAR Market Listing Rules: an expected market value of no less than 4 billion RMB, main business or products approved by relevant national authorities, large market space, and has achieved phased results. Pharmaceutical companies are required to have at least one core product approved for Phase II clinical trials; other companies aligned with the STAR Market’s positioning must possess significant technological advantages and meet corresponding conditions.

This also means that Taino Mebo is seeking a listing with losses. The prospectus shows that during the reporting period, the company sustained continuous losses, with net profits attributable to shareholders of the parent company of -446.46 million yuan in 2023, -514.77 million yuan in 2024, and -601.32 million yuan in 2025. As of the end of the reporting period, the company’s accumulated unrecouped losses amounted to 1.45B yuan.

In fact, for companies choosing to list under the fifth set of standards, losses are expected. Although Taino Mebo reported substantial losses and the loss margin is widening, it is not uncommon for loss-making companies to list on the STAR Market. Some companies, despite losses at listing, have achieved profitability afterward. Therefore, as long as a loss-making company can give investors hope and boost their confidence, the market can accept such companies going public. However, for Taino Mebo, increasing investor confidence is a very challenging task.

For a loss-making company, especially one with significant losses, the top priority to boost investor confidence is to resolve profitability issues—namely, when the company can turn a profit. This is what investors care most about. After all, companies listing under the fifth set of standards on the STAR Market are supported by policies and have promising development prospects. But when the company can become profitable is directly related to investors’ vital interests.

However, Taino Mebo’s delay in projecting profitability has undoubtedly disappointed the market. In response to the first round of review inquiries, the company confidently stated that it could be profitable by 2027, claiming there is sufficient basis for this projection.

Yet, in response to the second round of review inquiries, the company pushed back its profit timeline to 2029. The IPO draft submitted on March 11 and March 27, as well as the meeting draft, all set the company’s profitability in 2029. For investors, early profitability would help boost confidence, while delaying profitability is a blow to investor trust.

Taino Mebo’s reason for delaying its profit forecast is apparently due to the disappointing sales performance of its core product, Staiduta Monoclonal Antibody Injection, after its 2025 market launch. This product is a globally pioneering recombinant anti-tetanus toxin monoclonal antibody drug, approved for listing in China in February 2025. Hailed as a “world’s first,” it was expected to be a breakthrough for the company’s commercialization efforts. However, the sales figures in its first year fell far short of expectations.

The prospectus shows that the company originally projected to sell 270k units in 2025, generating 156 million yuan in revenue. In reality, total drug sales for the year were only 51.22 million yuan, less than one-third of the expected target. As of September 30, 2025, the sales completion rate of the company’s own sales team was 76.67%, while external promotional service teams only achieved 6.42% of the expected sales.

While sales of Staiduta Monoclonal Antibody Injection fell short, the company’s expenditures increased significantly. Due to the product’s market launch, sales expenses in 2025 reached 270k yuan, 5.42 times higher than in 2024. Spending 190M yuan to generate only 51.22 million yuan in revenue clearly indicates a poor return on investment. In 2024, the company spent 351.08 million yuan on sales expenses to generate 15.06 million yuan in revenue, also a situation of high input and low output. Such a ratio makes it difficult to instill confidence in investors.

Meanwhile, despite the company’s operational difficulties, it exhibits characteristics of “a poor temple with a wealthy monk.” As a startup still in its early stages, facing operational challenges is understandable. In such circumstances, executives and employees should tighten their belts and work together to overcome difficulties. However, the reality is different: top executives and staff are living quite comfortably, leaving the losses to the company, which will ultimately be transferred to investors through the listing.

The prospectus shows that in 2025, Chairman HUAXIN LIAO’s (Chinese name: Liao Huaxin) annual salary was as high as 2.6934 million yuan; Vice Chairman and General Manager Zheng Weihong’s salary was 2.9113 million yuan; Director, Chief Medical Officer, and Senior Vice President Wang Guanmei’s salary reached 3.6155 million yuan; and Secretary of the Board and Assistant General Manager Yuan Xiaohui earned 953.3k yuan.

In fact, high salaries are not limited to executives. For example, in 2025, although the company’s product sales fell far short of expectations, sales personnel’s income remained high. The total salary for sales staff in 2025 was 953.3k yuan, with 382 salespeople, averaging an annual salary of 32,200 yuan and a monthly income of 2,680 yuan. Such high earnings are beyond the reach of ordinary people.

Taking R&D personnel as another example, in 2025, the company had 156 R&D staff, with total R&D salaries of 84.6922 million yuan, averaging 54,290 yuan per person annually. Additionally, the company’s equity incentive expenses for R&D staff in 2025 amounted to 20.6406 million yuan, or about 13,230 yuan per person. Combined, the average income per R&D employee was 675.2k yuan. Such high incomes are also out of reach for most ordinary people. It’s clear that despite heavy losses, the company’s executives and employees remain quite well-off.

Moreover, the company’s two founding shareholders actively cashed out before the IPO, which also confuses investors. Taino Mebo is a company with dispersed shareholding; currently, it has no controlling shareholder. The actual control is jointly held by Zheng Weihong and HUAXIN LIAO. Zheng Weihong directly owns 4.73% of the shares and indirectly controls a total of 11.11% through holdings in Qinchuan Shiji, Qinchuan Future, Qinchuan High-tech, Qinchuan Excellence, and Qinchuan Transcendence; HUAXIN LIAO directly owns 14.15% and indirectly controls 3.11% through Tainuo Management. The actual controllers, Zheng Weihong and HUAXIN LIAO, together control 33.10% of the shares.

Despite their relatively low shareholding, both controllers have frequently cashed out through multiple share transfers before the IPO: in April 2022, Liao Huaxin transferred 3.70% of shares for 59.2 million yuan; in April 2023, both Liao Huaxin and Zheng Weihong cashed out a total of 118 million yuan; in October 2024, Liao Huaxin transferred shares again for 5.0386 million yuan. Before submitting the IPO application, Liao Huaxin had cashed out about 111 million yuan, and Zheng Weihong about 71 million yuan—totaling 182 million yuan. While the company is still in its startup phase and has not yet overcome difficulties, the frequent cash-outs by the actual controllers are clearly not conducive to boosting investor confidence.

In fact, Taino Mebo is well aware of its predicament, which is why it included a delisting risk warning in the prospectus. If, after listing, the company cannot achieve profitability from the fourth full fiscal year onward and its operating revenue remains below 122.99M yuan, it faces the risk of termination of listing. This is a risk investors must always keep in mind.

Furthermore, when the company’s net assets turn negative, it also triggers delisting risks. Given the company’s losses at the current rate, it could become insolvent within four years, risking delisting. Once listed, these issues will all be faced by investors, who will bear the risks. As an investor, can you have confidence in Taino Mebo’s listing? (This article is exclusively published; unauthorized reproduction or sharing is prohibited.)

Author’s statement: Personal opinions only, for reference.