Cellyan Biotechnology Co., Ltd

Cellyan Biotechnology Co., Ltd. operates in the OTC pharmaceutical cross-border e-commerce supply chain industry in Mainland China, providing services that navigate the intricate regulatory landscape for cross-border transportation of OTC pharmaceutical products. The industry is characterized by high competition and fragmentation, with the broader supply chain services industry facing potential disruption if large logistics providers expand in-house OTC pharmaceutical offerings. The company is based in Hong Kong and serves the growing demand from Mainland Chinese consumers for overseas OTC pharmaceuticals, with its system cataloging more than 6,000 SKUs, including around 6,000 HKDOH-enlisted OTC SKUs.

The company faces intense competition in the broader supply chain services industry, especially from large logistics service providers who may expand their offerings to include OTC pharmaceutical related supply chain services in-house. Primary competitors include existing market players offering comprehensive supply chain solutions and logistics services, as well as potential new entrants. The company believes it is one of the three main OTC pharmaceutical cross-border e-commerce supply chain service providers for Tmall through its engagement with CaiNiao. Competitive advantages include advanced proprietary technology infrastructure, scalability, flexibility of offerings, regulatory compliance, and a seasoned management team.

The company generates revenue through two main divisions: Supply Chain Services and Procurement and Distribution. The Supply Chain Services division offers a one-stop solution including pre-consultation, product information review, procuring overseas OTC pharmaceutical products, enlisting OTC pharmaceutical products to the HKDOH, obtaining import and export permits and clearances, storing products at warehouses, packaging, and arranging for logistics and end-to-end delivery services. The Procurement and Distribution division procures overseas OTC pharmaceutical products and sells them to merchants on established Chinese e-commerce platforms as well as pharmaceutical distributors. Main customers are e-commerce platform logistics partners like CaiNiao and merchants on platforms such as Tmall, Meituan, Pinduoduo, JD.com, Xiaohongshu, and Youzan.

The Supply Chain Services division, primarily conducted through Joint Cross Border, provides OTC pharmaceutical cross-border e-commerce supply chain services. For the fiscal year ended March 31, 2026, this division derived $7,557,193 ¹, approximately 56.3% ² of total revenue, and for fiscal year ended March 31, 2025, derived $12,481,187 ³, approximately 61.4% ⁴ of total revenue. Services include import services such as engaging in-house medical professionals to sort products, providing classification information, applying for drug import certificates from HKDOH, and coordinating transportation to warehouses. After products arrive, value-added services include adding labels, packaging, extended storage, product inspection, batch processing, photography, counting, disposal, and addition of gift packaging. The division also assists with processing export documents, delivering goods to Hong Kong Customs and Mainland Customs for clearance, and delivering to last mile carriers.

The Procurement and Distribution division, primarily conducted through V-Alliance, procures overseas OTC pharmaceutical products and sells them to merchants on Chinese e-commerce platforms and pharmaceutical distributors. For the fiscal year ended March 31, 2026, this division derived $5,872,130 ⁵, approximately 43.7% ⁶ of total revenue, and for fiscal year ended March 31, 2025, derived $7,826,897 ⁷, approximately 38.5% ⁸ of total revenue. The procurement process includes analyzing cross-border OTC pharmaceutical sales and customer orders, negotiating with suppliers, comparing quotations, confirming shipping schedules, deploying in-house medical professionals and customs clearance teams, coordinating with freight companies, and collecting import data for reporting. The company keeps abreast of new OTC drugs through four channels: distributors outside China recommending new drugs, attending professional pharmaceutical conferences or exhibitions, drug manufacturers promoting new products, and data from the Supply Chain Services division.

On January 16, 2025, the company completed its initial public offering of an aggregate of 1,403,685 ⁹ ordinary shares at a public offering price of US$4.00 ¹⁰ per share, of which 1,000,000 ¹¹ ordinary shares were offered by the company and 403,685 ¹² ordinary shares were offered by selling shareholders. On December 12, 2025, shareholders passed a special resolution to change the company name from Hong Kong Pharma Digital Technology Holdings Limited to Cellyan Biotechnology Co., Ltd, effective December 19, 2025. On November 21, 2025, the compensation committee adopted the 2025 Equity Incentive Plan, reserving up to 1,100,000 ¹³ Class A Ordinary Shares, approved by shareholders on December 11, 2025. On March 18, 2026, V-Alliance acquired 100% ¹⁴ share ownership of New Ben Global Enterprises Limited from WAN FENG, and on July 15, 2026, V-Alliance disposed of New Ben Global Enterprises Limited to WAN FENG for a consideration of HK$10,000 ¹⁵ (approximately US$1,275 ¹⁶). The company received a notification letter from Nasdaq on January 12, 2026 indicating the closing bid price had been below US$1.00 ¹⁷ per share for 30 consecutive business days, and on July 14, 2026 received an additional 180 days, until January 11, 2027, to regain compliance.

For the fiscal year ended March 31, 2026, total revenue was $13,429,323 ¹⁸, compared to $20,308,084 ¹⁹ for the fiscal year ended March 31, 2025. Net income was $1,083,619 ²⁰ for fiscal 2026, compared to $3,419,517 ²¹ for fiscal 2025. The Supply Chain Services division revenue decreased from $12,481,187 ²² to $7,557,193 ²³, while the Procurement and Distribution division revenue decreased from $7,826,897 ²⁴ to $5,872,130 ²⁵. The company experienced a decline in revenue and net income year-over-year.

The company plans to continuously upgrade its technology infrastructure over the next three to five years, including implementing smart shipping and receiving equipment to achieve automatic identification and counting of goods and packages, automating assembly lines to reduce manual operations and labor costs, and designing storage facilities tailored to pharmaceutical products to enhance warehouse space utilization. The company also plans to update its software system by developing a comprehensive cross-border OTC pharmaceutical service platform to address supply chain challenges such as fragmentation and improve customer acquisition.

The company plans to establish a sales team in Mainland China primarily targeted at acquiring more merchants, building on the significant revenue generated by its Hong Kong sales team in recent years. Additionally, the company is focusing on developing internet hospitals in Mainland China as a new source of revenue, assisting them in accessing new (primarily OTC) drugs available overseas, though as of the date of the filing, no revenue has been generated from internet hospital clients.

The company plans to further optimize working capital management by improving accounts receivable turnover rates, establishing a robust credit management system, assessing and managing customer credit, reducing inventory turnover times, optimizing procurement plans, and minimizing inventory retention times. Effective working capital management is expected to enhance productivity and an efficient inventory management system will help reduce inventory backlog.

The company's supply chain operations depend on its warehousing and logistics facilities, with three leased warehousing spaces in Hong Kong under three lease contracts as of the date of the filing. The company outsources some services such as customs clearance and delivery within Mainland China to third-party business partners. The company's proprietary ERP system, Extraordinary Supply Chain V2.0, integrates with its warehouse management software system to enable unified system operation for overall order and warehouse operations.

The company's capital allocation strategy includes investments in technology infrastructure upgrades, with plans to implement smart shipping and receiving equipment, automate assembly lines, and develop a comprehensive cross-border OTC pharmaceutical service platform. The company has reserved up to 1,100,000 ²⁶ Class A Ordinary Shares under the 2025 Equity Incentive Plan for attracting and retaining key personnel. The company has not historically declared or paid dividends on its shares and does not expect to declare or pay any dividends in the foreseeable future.

The company faces structural headwinds including intense competition in the broader supply chain services industry, particularly if large logistics service providers expand their offerings to include OTC pharmaceutical related supply chain services in-house. The company's business is significantly affected by the development of international commerce and the e-commerce industry, as well as macroeconomic factors affecting demand for OTC pharmaceutical products in Hong Kong, Mainland China, and globally. Current and future trade restrictions could materially and adversely affect the business, including the international trade dispute between the PRC and the United States and increases in tariffs.

The company faces execution risks including customer concentration, with two customers accounting for 12.05% ²⁷ and 10.50% ²⁸ of total revenues for fiscal year 2026, and the customer who accounted for approximately 10.50% ²⁹ is CaiNiao. The company also faces risks related to supplier concentration, with two suppliers making up more than 10% of total purchases for fiscal year 2026, accounting for 27.50% ³⁰ and 13.58% ³¹ respectively. The company's operations are subject to extensive regulation in Hong Kong, including the Import and Export Ordinance, Pharmacy and Poisons Ordinance, and Chinese Medicine Ordinance, among others.

The company faces significant customer concentration risk, with two customers accounting for 12.05% ³² and 10.50% ³³ of total revenues for fiscal year 2026, and the customer accounting for approximately 10.50% ³⁴ is CaiNiao, with whom agreements are subject to unilateral termination by CaiNiao upon 30 days' prior written notice without cause. Supplier concentration is also material, with two suppliers accounting for 27.50% ³⁵ and 13.58% ³⁶ of total purchases for fiscal year 2026. The company's OTC pharmaceutical cross-border procurement and distribution business operates in highly competitive and evolving markets, and the company faces intense competition in the broader supply chain services industry, especially if large logistics service providers expand their offerings in-house. The company's business is significantly affected by the development of international commerce and the e-commerce industry, as well as macroeconomic factors affecting demand for OTC pharmaceutical products, and current and future trade restrictions could materially and adversely affect the business. The company has identified material weaknesses in internal control over financial reporting related to lack of sufficient financial reporting and accounting personnel with appropriate knowledge of IFRS and SEC reporting requirements, lack of formal accounting policies and procedures, and lack of proper approving procedures for related party transactions.

Management's message emphasizes the company's strategic positioning as a leading provider of third-party supply chain services in Mainland China's OTC pharmaceutical cross-border e-commerce market, with a focus on leveraging advanced proprietary technology infrastructure, scalability, flexibility of offerings, and regulatory compliance as key competitive strengths. The strategic priorities for the period ahead include continuously upgrading technology infrastructure over the next three to five years, expanding the sales team in Mainland China to acquire more merchants, optimizing working capital and operations, and developing internet hospitals as a new source of revenue. Management also highlights the importance of maintaining relationships with key customers like CaiNiao, with whom agreements have been extended from April 1, 2026 to March 31, 2027, while simultaneously diversifying the customer pool to reduce dependence on a few major customers.